Today, I went to buy a new car at the dealership. I had done research on price, so I knew exactly what to offer. I test drove the car, and told the salesperson I am ready to make a purchase if we can agree on terms.
Salesperson asked if I wanted financing. I politely redirected back to negotiating the car’s price first. I made a low offer. I expected a counter offer. But the Sales Manager agreed.
At this point, I mentioned that I would be paying in full with a personal check or bank cashier’s check. The salesperson said a personal check would be fine. Next, he went over options for me to buy. I politely declined every option. The salesperson said no problem and that he will be right back.
He comes back. Then he leads me to the Sales Manager waiting in the finance office. The Sales Manager says they’ve had bad personal checks before, so they need me to sign a credit application. I counter by offering to get a cashier’s check drawn from any local bank. The sales manager says that won’t work because the cashier’s checks can be faked. Finally, I asked for the method of completing the payment…
He wanted me to finance the car. He said I could payoff the car loan within 90days at no interest “which would be just like a cash payment.” ( I know there will be fees involved). At this point, I just got up and walked out. The sales manager let me go without a word.
I believe the sales manager wanted me to back out of the deal. They were only going to profit a little from my sale. But now, they can sell that car to someone who will pay a higher price, get gouged on extras, and opt for financing with fees.
I won’t return to that dealership again. Instead, I will travel to another one in the next city to try another cash offer. What should I do differently next time?
Thanks For Sticking To Your Principles. Those Of Us Who Always Pay Cash Don’t Need Any BS.
I paid cash for my first “teenager’s beater car.” Then I financed a brand new 71 Super Beetle, putting a third down on the $2350 purchase price and payments to run 24 months. I paid it off in 8 months and immediately began saving for my next new car. I had more than enough saved by then. Process repeated.
I’ve never had car payments after my first car. Financing? It’s backwards. You either make payments to your savings account before buying a car or payments to a loan after you buy the car.
Did the same with my first house, too. That was the last of financing.
I guess, I’ve been up front about paying cash. I have a figure in mind that I want to spend, totally, and that’s what has to be met. I don’t really care what fees are rolled in, left out or otherwise. Just get near my reasonable purchase price.
It takes a little work, but I’ll bet you’ll do just fine in finding what you’re looking to buy and spend.
You don’t say if you are buying something the dealer had in stock. I usually find where a car is that meets my needs and then negotiate at that dealer on a car they have on the lot.
You can no more force the deal through than they can force you to finance the car.
I commend you. You did exactly what IMHO you should have. You were even more gentlemanly about it than I would have been.
I can understand why they refused a personal check. I would have expected that. But their refusal to take a bank check suggests that your conclusion is correct. They were unable to make any money off of your from “packs”, they were unable to make any money from you on financing, so they gave you a reason to walk away.
I thought that question a bit more. I usually don’t wait until I’m in a rush to replace a car. I think the deals aren’t the same all year long.
Timing
From my experience, had you run this same scenario in the last week of the 12th month of a year Between (Christmas Eve And New Year’s Day), you could expect a call back within a few days. The dealer would sheepishly say to come on down and they’ll take your offer. Been there, done that.
Shopping in spring, you will possibly just have to accept a deal that’s not quite as good as later in the sales year. The salespeople are feeling a little bold right now with spring fever in the air.
I guess time have changed. I am having similar issues. In 2011 & 2014 I was able to buy brand new cars at the truecar price, paying cash. Now we need a new or newer car. I researched and decided on a 2012-2013 Sonata, CPO; they were priced at ~14K. The I saw with rebates, I should be able to get a brand new 2015 base model for $17900, so I figured it should be worth it to buy a new one.
So I got all my quotes lined up, talked to the sales people and finalized the deal, with color, trim etc on the phone. The 1st dealership started playing games asking me to finance and then pay it off within a week without any penalty. I told them I am sure the 15 page document has some fine print somewhere about a penalty and I got a blank stare. Tried the same with another dealer and was fed the same lines on how I should add up for options and how I don’t qualify for most of the discounts and they wanted to sell me the Sonata at the price of a brand new Camry. The Camry has rearview camera and bluetooth with caller ID standard, also has better resale just in case, so I could not justify the price and walked away.
Dealers make money on the financing. So they try to lead the dance to get you to sign a financing agreement. Can’t really blame them. But it sounds like with Hondaguy they were trying too hard to lead in the direction they wanted to go. Sounds like they were so focused on the extra bucks from the financing that they sacrificed any profit they might have made.
Car sales is a pretty brutal business as you found out. It could be that the car you intended to get is popular in that area and harder to obtain.
That factor alone can lead to a dealer playing hardball because if Customer A won’t get stuck like a pig at a biker hog roast then Customer B will willingly oblige.
This is also income tax time and dealers know that potential buyers are out in droves after obtaining their new found wealth from the Feds so the dealers will be the ones calling the shots due to a deeper buyer pool.
A long time friend had a similar experience at a Chevrolet dealer. He had made a deal on a new Chevrolet. I am not sure whether it was an Impala or Malibu. At any rate, the sales manager then said that they couldn’t sell the car for the price that he had originally agreed and wanted a higher price. My friend walked out, went to the Toyota agency and bought a Camry. I bought my last car, a Toyota Sienna from this dealer. We agreed on a price and I wrote a check.
You are definitely on the right track. Walking away when they refuse to do a cash deal, w/out first arranging a financing arrangement, shows you know what you are doing. Good for you.
So what to do the next time? First off, when they say a cashiers check doesn’t guarantee them 100% they’ll actually get the cash, they have a point about that. It’s not a super good point, but there is a point to be made. For one thing, cashiers checks can be forged. And there are other reasons, even w/a good check, they might be hesitant to accept only a cashiers check in exchange for our driving off w/the car. So give them a little slack on this maybe is all I’m saying. I’m thinking the reason they want the short term financing is b/c they get more info on you, and the get the credit laws on their side, so they have a chance to collect if something goes wrong with the cashier’s check.
But they are indeed in the business to sell cars. I think you just need a little minor adjustment to your method is all. I’m presuming you are a young person and don’t have a long credit history, or you have some credit report dings, so that is probably what is causing this difficult.
What I’d recommend for you is to tell the salesperson up front – before negotiating a price – you will not agree to financing, and you have the funds in your checking account to pay the entire price. Then show them a copy of your checking account statement, blanking out confidential info like bank account number, etc. Tell them you’ll be happy to allow them to call the bank and verify you have those funds on deposit. Then ask them what’s the most convenient and secure way for you to pay them the funds – excepting using financing of course. Tell them you’re willing to wait several days or several weeks after presenting them w/the funds before you drive the car off the lot if that’s what it takes.
Once you get that out of the way, then negotiate a price on the car you want.
I don’t cut this dealer any slack. A car salesman wants to sell four thimgs: 1. the car; 2
a loan; 3. An extended warranty; 4.a wax job and an interior treatment. You are there to buy just one thing–the car. The whole negotiation should have been quite simple: the dealer has a car and you have some money. All that needed to be determined was how much of your money was needed to buy the car.
When I purchased my Corolla, I was very clear in the beginning, and in no uncertain terms, about how I wanted to the deal to proceed. Every time the saleman attempted to veer, I said “stop! this isn’t what I said, right?”. Then he’d agree, and continue. I had to do this several times, each time he’d attempt to veer, I’d say, and literally say it, “stop, that’s not the way I do business”.
Finally at the end I was expecting the paperwork would show a bunch of add-ons. I asked why none were there. The salesmans said “we discussed it with the manager and he said better not to even try”. … lol …
That’s why I think it is critical to expose everything up front, then stick to what you say. I didn’t ever walk out but I ran out of time several times, and left the saleman my card and told him to phone me and make an appointment for when he’d like to continue the discussion … no harm w/that …
And he phoned back each and every time within a few days …
Over 20 years ago I got taken with that “90 day interest-free loan” (so I could get the cash together). 90 days later, cash in the bank, they wanted to charge me $450 interest. Guess what, the salesman I made the deal with “no longer works here.” We finally split the difference. They had no problem taking my check at that point. You did well to walk away.
It is also okay to walk away if the car the dealer trots out is not what you negotiated an agreement to buy. Example, you specified and they agree to a specific trim level your online research shows they have plenty of on the lot but they trot out the wrong trim level with a suddenly inflated price over what they agreed to.
I made sure my salesman knew that the payment wound be by cashiers check, it was never an issue. . My parents have used personal checks to buy several new cars over the years without question.
Another scenario to walk away from is when the agreement between you and the dealer is for a new vehicle NOT used as a demonstrator and instead they try to foist a car off on you with significant miles.
Last year I walked away after negotiating a deal in such a case. I refused to sign any paperwork until after inspecting the car. Turned out it had over 400 miles on it, had grease stains on the seats with food wrappers on the floor and stank of stale food, had a filthy engine, and sloppy welds with mismatched paint around the trunk rim as if repaired, and when I backed up and leaned down I could see the back end hung about three to four inches lower on one side and the rear end was dogged out of true from the front. Salesman said I was being too picky, then said they would have to tell me of any repairs so I was mistaken, then said they would clean the car, then said he would find me a different car, all as I was walking away. I said no deal, telling him lying to me was a deal breaker.
