Buying new vs used jeep - Page 2 -
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post #16 of 21 Old 12-15-2013, 01:43 PM
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Originally Posted by WDNewman View Post
Save your money until you can make a cash buy. Go into the dealer and knock 10-15% off a new model, or 15%-20% off last years model if they still have one on the lot. They will jump on it. If they don't move on to the next dealership. Cash buyers always pay less than guys who have to pay on time or who have trade-ins.

Good luck.
Perhaps it is different where you are, but from my experience that is absolutely not true. Dealerships make more money off a vehicle when it is financed than when they sell for cash.

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post #17 of 21 Old 12-15-2013, 03:53 PM
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You're both right.

You certainly can't waltz into a profitable dealership, wave cash around and come out spending <10% of sticker price. I guarantee you will be told to kick rocks. However if you happen upon a dealership that is behind or just making their numbers it's very feasible that they will take the money. Because dealerships actually lease cars and taking a loss on one vehicle allows them to keep more vehicles on the lot to be financed (profit). Therefore they will be able to recoup that loss quite easily. It's a calculated risk but that's business.

If you can't save up enough cash at the minimum seek financing else where. You will always get a better rate at your own financial institution unless you have a crappy record of financial responsibility (ie bouncing checks, or overdrafting).
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post #18 of 21 Old 12-15-2013, 06:02 PM
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On that other forum folks are getting 5% or better below factory invoice. In the DC area the dealership is more than profitable.

Many dealers can meet or beat your bank financing at least in the DC area. They have trouble beating NFCU and Penfed though. Nothing is for free though and a good financing deal can effect the bottom line price you pay. Just remember that $499 you pay for processing is almost all profit. Takes the chick who does the paperwork for tags etc maybe 5 minutes to do process your paperwork. She has to have time to service the sales manager, the general manager and the owner of the dealership. They didnt hire her for her admin skills.
A dealership will often times make more money on a used car than a new one.
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post #19 of 21 Old 12-16-2013, 07:01 AM
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IF you are going to finance....

go to a credit union or other financing source and get a decent rate locked in.

negotiate your deal on price, say "it depend's on your rate... I might pay cash" when they ask if you are financing... [they will leave the financing and warranty 'sales' until the price is locked]

when the question comes up after the price is set, get them to give you the interest rate they offer. Compare it to what you already have 'locked' and make a decision. When I bought my Jeep, I could have paid cash, I had a rate of 4% from my credit union and the dealership offered me the same 4% and I told then "no" so they then offered me 2.6% interest. I took it b/c I can make way more than that and because Jeeps don't depreciate very fast. I have an excellent credit score though, it is dependent upon that.

If you have a poor score it may not work.

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Last edited by R3dRid3r; 12-16-2013 at 07:03 AM. Reason: cleared up a concept
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post #20 of 21 Old 12-16-2013, 04:18 PM
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The source of funds has nothing to with the purchase. Credit can be used as a purchasing tool. Dealers often have incentives or kickbacks when they finance a vehicle with the manufacturer or a bank. If have good credit (score 720+) there are a lot of options. The dealer needs to make a profit off every vehicle and sometimes financing it is one more revenue stream to give you a break somewhere else. Walking in to a dealer to buy a Jeep is no longer like walking into the town barn with a pocket full of gold to buy a horse.

If you can afford it just pay the loan off right away.
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post #21 of 21 Old 12-17-2013, 07:16 AM
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I travelled for over thirty years and bought a new vehicle every 14 to 18 months. I would request quotes from dealerships on exact models with named options, sending out request for quotations to 6 or 7 dealerships, depending on the brand. The usual discounting for most dealers was from 15 to 25% off sticker price. I would take cash to the lowest bidder. I never had to sit in a salesman's office while he talked to the manager about "deals" and discuss extended warranties, financing rates, and dealer add-on junk with a financing agent. Over time I noticed that the dealerships that would not respond or that came in with real high pricing were the ones where the tendency was to extract every available penny from each customer by hook or crook. Once, one of these came in with a low bid but tried to jack the price on me when I came to pick up the unit. Never did do business with them.
Beware of dealers selling cars at 1% over invoice. They do not and will not tell you about holdbacks which is an extra 2 or 3% discount they get off the car makers invoice. In other words, if a dealership sells you a new car at invoice, they will make a profit of 2-3% on that unit which any dealership will gladly settle for. There is good information on this on the internet.
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