I have been shopping for a used vehicle,I found one car lot that advertises one price if you pay cash and a cheaper price if you finance.the cash price is 39,000,the price if you finance is 35,700.I hope this is not the new normal.I thought if you pay cash they would want to sell you the vehicle,but they want you to finance as they get a kick back from the bank.
Looking to buy a used car
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I had been looking at a new vehicle prior to the pandemic, but opted not to bother as I was barely driving anywhere. When I started looking again in 2022 it was about 6-8 months wait time to get a new vehicle so again I opted to hold off. I was looking again the other day and the posted interest rates on new vehicles here in Winnipeg were between 7-8 percent so I can't even imagine the rate for a used vehicle unless they're now charging the same interest rate for both. Either way, I'm going to stick with what I have for the foreseeable future as there is no way I'm going to pay more than 5 percent interest on a vehicle.
Had the same shock on new vehicles and the interest rates being charged. I was interested at possibly getting a new car but taking into account I barely drive now since working from home plus the crazy rates, it's just not worth it.
There was a news report last year about dealerships refusing to sell vehicles for cash. Either you finance or you can't buy one. It was because they had lower inventory and lots of customers, so they could turn people away for the more profitable sales.... I guess this is just the next step. 
I'd be pretty pissed if I was trying to buy a car right now.
I'd be pretty pissed if I was trying to buy a car right now.
Offer them the $35K cash and let them know they can fuck off if they don't take it.
Insider tip: the car biz is less about selling you a car than it is about getting you to finance a car.
There was a news report last year about dealerships refusing to sell vehicles for cash. Either you finance or you can't buy one. It was because they had lower inventory and lots of customers, so they could turn people away for the more profitable sales.... I guess this is just the next step.
I'd be pretty pissed if I was trying to buy a car right now.
Yup, just like our "tip creep" thread, this is them "innovating" a new excuses as a way to fuck people over.
The difference in price is $4300? Believe me they will make that back from your interest, and then some.
There's so many options out there for used cars, just wait for the right car & right deal.
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Ouuu really? I guess with interest rates etc, it makes more sense with all the cash flow 🤔
Especially since an outright purchase has low profit margin vs % rates 🤔
so maybe it makes sense to finance the car, then turn around and pay it off after the paperwork is done by calling the bank in a few months? 🤔
This happened to me when buying a new car. My advice, try to use it to your advantage. I think a low percentage of people actually pay in full with cash so play it up a bit. I worked a great deal with financing, MADE SURE TO READ THE FINE PRINT ON THE LOAN CAREFULLY, and simply walked into bank and paid the loan off outright after 30 days. No penalties, no closing fees and only negligible interest. Most dealerships work with the big Canadian banks, and it would seem that most auto loans are fully open after 30 or 60 days. Not that I could care, but I've since heard that the dealers don't get their kickbacks from the banks until about 6-8 months of financing.
The last car I purchased was in Jan 2018. It was brand new Hundyai. I financed through Hundyai over 5 years and the loan was with RBC. The payments went directly to RBC. The interest rate was 0.0% !!!
I don't see how Hundyai made any additional $ when I financed instead of paying cash in my case? And why the hell would I pay cash when I did not pay a penny of interest over the 5 years? I was allowed to delay the first payment, without penalty, for 3 months. So I actually made the last payment in March of this year.
So obviously before the pandemic at least, your statement "the car biz is less about selling you a car than it is about getting you to finance a car" was not always true.
JD
Nothing is free. What was the cash price versus the financed price? Did you have a trade-in?
No trade in. I went to dealership and asked for their best price. I then found a guy in Victoria ( I have forgotten the name given to people who provide this service) who basically contacts all the dealerships in the lower mainland for their best price and that is the price I paid for the car plus I paid him a flat $500 but still saved over 1k compared to the best offer I could find by myself. The car and price he found for me was not conditional on how I paid for the car.
I was very happy with the end result.
JD
I remembered the term used for the company I used in Victoria - "Auto Broker".
The company I used is called: Noble Car Buyers Ltd.
I gave the specifics of the car I wanted to the broker - the make, model and trim level. I likely also specified the colour. The broker returned with a quote several hours later, if I recall correctly. There was no obligation to pay for the service ($500.00) if I chose not to purchase the automobile they had found for me. I could have gone back to the dealer I received the original "best" quote from and asked them to match the price the broker found, and saved the $500.00. And likely the dealership would have matched it but I had given them the first chance to make a "best" offer and I felt it would have been morally objeectionable on my part to screw the broker out of his commission in order to save the $500.00.
Note that the price the broker quoted me included ALL fees except for taxes. If I recall correctly, the price the broker found for me was basically the same amount as what the dealership had quoted me, minus all the delearship fees which were over $1500.00.
Next time I might warn the dealership I will be going to a broker after getting their best price. Otherwise, I would repeat the steps I followed above.
JD
The company I used is called: Noble Car Buyers Ltd.
I gave the specifics of the car I wanted to the broker - the make, model and trim level. I likely also specified the colour. The broker returned with a quote several hours later, if I recall correctly. There was no obligation to pay for the service ($500.00) if I chose not to purchase the automobile they had found for me. I could have gone back to the dealer I received the original "best" quote from and asked them to match the price the broker found, and saved the $500.00. And likely the dealership would have matched it but I had given them the first chance to make a "best" offer and I felt it would have been morally objeectionable on my part to screw the broker out of his commission in order to save the $500.00.
Note that the price the broker quoted me included ALL fees except for taxes. If I recall correctly, the price the broker found for me was basically the same amount as what the dealership had quoted me, minus all the delearship fees which were over $1500.00.
Next time I might warn the dealership I will be going to a broker after getting their best price. Otherwise, I would repeat the steps I followed above.
JD
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I wonder if destination Honda reduces their prices [ as they advertise best price forward ] and doesnt haggle on prices... [ i'm sure it comes down to buying power / negotiations but compared to any joe asking for a price reduction ]
But thanks for reminding us about the auto broker option... could be useful for the future
But thanks for reminding us about the auto broker option... could be useful for the future
Used car prices are definitely high compared to before the parts shortage created by the world wide pandemic. And they will likely stay higher than normal until the parts shortage has abated and new cars can be bought without the customer having to enter a 6 month long queue. The possible exception might be Tesla's because the price of new Tesla's have dropped so significantly.
JD
