Avoid These Six Car Dealer Finance Traps | Savings.com.au (2023)

Many people know that car dealers don’t necessarily have your best interests at heart when it comes to financing your vehicle. In fact, the 2021 Roy Morgan Image of Professions Survey revealed Australians consider car salesman to be the least trusted profession, pipping real estate agents and politicians. *Cue the shocked face.*

But there’s no denying that buying a car can be a daunting process, so sometimes it make sense to organise finance through the dealership to make the process easier for yourself. No one’s judging.

If this is the path you’re considering, keep in mind a dealer may trick you into paying more than need be or sign you up for features you were never after in the first place. So, during your next car purchase, be on the lookout for the following six car dealer finance traps.


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FixedNew1 yearMore details
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  • Get the option to choose to reduce your regular payment amounts if you opt for balloon payment
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  • Get the option to choose to reduce your regular payment amounts if you opt for balloon payment
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FixedNew, Used99 yearsMore details

Car Loan (New and Used)

  • No ongoing fees
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    (Video) CAR LOAN DEBT TRAP - Rule of 78 at CAR DEALERSHIPS 2022 Auto FINANCE The Homework Guy, Kevin Hunter

    • Get the option to choose to reduce your regular payment amounts if you opt for balloon payment
    • Available for purchasing new and demo vehicles
    • $5,000 to $150,000 loan amount
    • Early payout available

    More details

    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

    The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

    Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of May 26, 2023. View disclaimer.

    What is dealer finance?

    Dealer finance can be any type of loan or lease arrangement offered by car dealerships to allow customers to drive away with the car quicker. Dealer finance can often offer lower interest rates than standard car loans, but may require a balloon payment to be made at the end of the finance period. Dealer finance is usually limited to new cars only.

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    While the interest rate could be lower through dealer finance, you may be getting yourself into more than what you bargained for.

    According to the Australian Consumer and Competition Commission (ACCC):

    “Dealers will be willing to sell some goods and services with a lower mark-up (including new cars) if this means they can sell more high mark-up services (such as parts, insurance, and finance).”

    1. Balloon payment included in your finance package

    Structuring your loan to include a balloon payment may seem like an attractive option as it will lower your ongoing repayments. However, what you don’t know is that a balloon payment will increase your interest costs, and it may take you longer (months or even years) to achieve equity in the car and be able to sell it without additional costs.

    Here is an example:

    A standard $40,000 car loan financed over five years at an 8% interest rate with will have monthly repayments of $811. But with a 30% balloon payment, the monthly repayments will be $648.

    $40,000 5-year car loan at 8% interest rate
    Monthly repaymentsTotal interest cost
    No balloon$811$8,663
    30% balloon$648$10,864

    Despite a drop in monthly repayments of $163 (if you have a balloon), it will be at the expense of an extra $2,201 in interest costs over the five years.

    Also, at 36 months, which is typically when most people want to upgrade their cars, with a balloon you will still owe $24,553 on the loan, which is $6,620 more than if you didn’t have a balloon. This can make it harder to achieve equity and upgrade.

    Some dealers may even up-sell the interest rate by applying a balloon payment - by avoiding rate discussions, they could increase the interest rate without you knowing, leading you to pay more.

    However, as of November 2018, ASIC banned flex commissions in the car finance space. Under the new rules, lenders take responsibility for working out the interest rate that applies to a particular loan, and dealers can't suggest a different rate that would offer them a greater commission.

    2. Selective loan presentation

    Car dealerships often only have access to a handful of lenders, possibly limiting you from selecting a lender with a competitive interest rate, low fees, and additional features.

    A dealer may even present you with two lenders who have approved you for a car loan. From there, you can choose which one suits your needs best. Yet, you have no way of knowing whether other lenders approved you too, with potentially a lower interest rate. In this case, you are placing all your trust in the dealer that they have presented you with the best deal possible.

    Remember, a dealer’s goal (most of the time) is to make as much money from you as possible. Opening yourself up and conducting your own research on various car loan products could greatly impact the interest rate you are offered.

    3. Zero finance - discounted dealer rates

    Have you ever walked into a dealership and been offered zero finance or a discounted interest rate and thought, “Gee whiz who would pass this up?”

    While a deal like this may sound amazing, remember the age old saying: if something sounds too good to be true, it probably is.

    From time to time, some car dealers may advertise '0% car finance' offers. As the offer suggests, under a 0% car finance deal you don’t pay interest on your repayments. While this can be an attractive incentive, these advertisements aren’t always what they seem and can have hidden costs involved.

    These deals can involve paying a higher price on the car (plus no negotiations on the asking price), a large balloon payment at the end of the term, or are only 0% interest for a set ‘promotional’ period before reverting to a high interest rate.

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    Generally speaking, if the interest rate is lower than a home loan rate, you need to be questioning the dealer’s motives.

    Here is an example to consider:

    Dealership A: Car costs $50,000 with an advertised interest rate of 2%. You ask for a discount on the car (as most of us usually do) but the dealer says no. The estimated repayments are $500.

    Dealership B: The same car costs you $45,000 (as you were able to get a $5k discount) with an interest rate of 6%. But in this case, the estimated repayments are $490.

    In the end, the $5,000 discount on the car outweighed the higher interest costs - you’re better off as your car loan repayments are lower.

    Moral of the story? Be sure to do your research, check the comparison rate, and read the terms and conditions (Yes! Read the small print…) so you know what you’re signing up for.

    4. Car insurance add-ons

    When you buy a new vehicle, the car dealer may try to 'add on' insurance. Unfortunately, dealers can overload you with information and choices, which may lead you to choose products they make high commissions on, but are likely poor value for you.

    Over a three year period between 2013-2015, ASIC data found car buyers obtained little if any financial benefit from buying add-on insurance, especially these forms of cover: credit insurance, gap insurance, loan termination insurance, mechanical breakdown insurance, and tyre and rim insurance. Car dealers got four times more in commissions ($602.3 million) than consumers received in claims ($144 million).

    Not only does the cover benefit the dealer greater, but most add-on insurance premiums are packaged in the car loan, which can substantially increase the cost of the product by increasing the loan amount and interest paid.

    From 5 October 2021, salespeople must wait four days before selling you add-on insurance. So, take the time to consider whether this is an extra you really need.

    5. Extending the loan

    To make cars seem more affordable, a dealer may offer an extended car loan offer e.g. six to seven year loan term. While stretching out the loan term may seem like a great option (as you’re paying less in repayments, of course), you will actually end up paying more interest over the life of the loan. Plus, since you’re repaying less each month, you may be owing more than the car is worth for a longer time.

    6. Guaranteed buybacks

    A guaranteed buyback is when you and the dealership agree to a pre-determined value for you to sell the car back to the dealer after the loan period is up and the balloon payment is due. Essentially, it provides a way of locking in the future value of your car. Seems like a sweet deal, right?

    Yes, but also maybe not. There are a number of catches that come along with this type of product:

    • Mileage estimate - Should you turn up with more kms on the car than agreed, you will likely have to pay some hefty fees.
    • Wear and tear - If the car has rust, scrapes/scratches, dents, immovable stains, ripped fabric etc. the cost of amending this is subtracted from the guaranteed future value.
    • Dealer exclusive - Guaranteed buyback is only available through dealership finance.
    • Higher interest rates - If the vehicle depreciates more than expected, that’s on the manufacturer. However, to mitigate the risk, the dealer may charge higher rates to protect itself.

    Read More: What is guaranteed buyback on car loans?

    Savings.com.au’s two cents

    One thing I really want to stress is - don’t walk away from this article thinking car dealer finance is something to avoid for the rest of your life. Car dealer finance can be the right option for some buyers as it’s convenient (drive away on the same day), simple, and you may be able to negotiate aspects of the financing. If that seems like the right fit for you, then go for it!

    But before you apply for finance through a car dealership, it may be beneficial to apply for car loan pre-approval through a lender. This way, you’ll have an interest rate and ongoing repayments to compare back to when discussing finance with a dealer. In other words, you’ll know if you’re being ripped off or not.

    When weighing up between dealer finance or going straight through a lender, ask yourself: “Does one option weigh up better than the other? Does one option seem more reliable and have less financial risk?”

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    Image by SCREEN POST via Unsplash


    What not to say to car salesman? ›

    Things to Never Say to a Dealer
    • “I'm ready to buy now.” ...
    • “I can afford this much per month.” ...
    • “Yes, I have a trade-in.” ...
    • “I'm only buying the car with cash.” ...
    • “I'm not sure…which model do you think I need?” ...
    • “Oh, I've wanted one of these all my life.” ...
    • “I'll take whatever the popular options are.”

    Why do dealers wants you to finance through them? ›

    want you to finance through them for two main reasons: Dealerships can make money off the interest of a car loan you finance through them. Dealerships earn commission for acting as the middleman between you and another lender.

    What to say when a car dealer asks your budget? ›

    Instead, politely say you would like to discuss the price of the car, including all fees and taxes. You want to know the "drive-away" or "out-the-door" cost of the vehicle they're willing to give you, not the MSRP, or sticker price.

    How much negative equity will a bank finance on a new car? ›

    There is no set amount of negative equity that can be rolled into your next car loan. If you need another vehicle but your current one is worth less than you currently owe your lender, you may be able to roll the negative equity onto your next auto loan.

    How do you beat a car dealer at their own game? ›

    Beat Car Dealerships at Their Own Game
    1. Arm yourself with information. Decide on a maximum, affordable monthly payment. ...
    2. Prepare for the game. Ask a friend to join you at the dealership for moral support, and don't bring the kids. ...
    3. Negotiate at the dealership.

    How much can you talk a dealer down on a new car? ›

    It is considered reasonable to start by asking for 5% off the invoice price of a new car and negotiate from there. Depending on how the negotiation goes, you should end up paying between the invoice price and the sticker price.

    Which month is the best month to buy a car? ›

    In terms of the best time of the year, October, November and December are safe bets. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. All three goals begin to come together late in the year.

    Is it better to finance through dealer or bank? ›

    Working directly with a bank to discuss financing before you head to the dealership could potentially help you save more money because it allows you to compare interest rates. Securing financing ahead of time also means there's no chance of a dealer increasing the loan rate as compensation for its part in the process.

    Why do car dealers not want you to pay cash? ›

    Additionally, some dealerships may prefer to finance your purchase because they can earn a commission on the loan, which means they may not be as willing to negotiate on price if you're paying cash.

    How much will a dealership come down on price on a used car 2023? ›

    Prices could drop up 5% for new vehicles and 10% to 20% for used vehicles in 2023, according to a report in November from J.P. Morgan. The basis for the prediction is that demand has stabilized and vehicle inventory is improving.

    How much can you usually negotiate a car down? ›

    Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds.

    How much is a lease on a $45000 car? ›

    How much is a lease for a $45,000 car? Using our calculator, we input a $5,000 down payment, an assumed $25,000 residual value, an interest rate of 7% and a term of 36 months (three years). It resulted in monthly payment of $606 before taxes.

    How do you know if you are upside down on your car? ›

    Do the math. Subtract the loan balance from the value of the car. If the result is positive, you have equity. If it's negative, you're upside-down.

    How much can I carry over on a car loan? ›

    “There's no limit to how much balance you can roll over into a new car loan. However, as a general rule, you shouldn't exceed more than 125% of the value of your car in a loan. Even at 125%, you're going to be upside down on the loan for almost the entire duration of the term.

    Why do car salesmen ask where you work? ›

    To figure out your ability to pay, the salesman typically will ask what you do for a living and where you work. This may seem like small talk, but it is actually a carefully calculated move to gather information. Thus, you should always downplay the importance of your own job.

    How do you not get ripped off by a used car salesman? ›

    Ten Ways to Avoid Getting Ripped Off When You Buy a Used Car
    1. Have the car inspected. ...
    2. Test drive the vehicle adequately. ...
    3. Never buy sight-unseen. ...
    4. Check the title before you shake hands. ...
    5. Read and understand the purchase agreement. ...
    6. Know who you are buying from. ...
    7. Never buy a car premised on repairs being made after delivery.
    Oct 9, 2019

    How do I take off a dealership? ›

    Take a piece of dental floss or thin fishing line and wrap it around your hand. Then slowly pull the floss or line through the adhesive behind the emblem or badge. If you twist several strands of floss together, you'll have a more durable string and it will be easier to pull through the adhesive.

    How much wiggle room do dealerships have on new cars? ›

    The percent of margin in cars can range from a low of 2% to as high as 15% when all incentives are factored in. The internet is a wonderful tool for finding information on incentives for particular cars. Bear in mind that there can be two types of incentives; customer incentives and dealer incentives.

    Do you actually pay MSRP for a new car? ›

    In fact, the MSRP is typically the starting point for your negotiations. If the model you want is in especially high demand, you may end up paying the full MSRP, but you'll almost always be able to negotiate with the dealer.

    How do you ask for a lower price? ›

    Top eight phrases to use when negotiating a lower price
    1. All I have in my budget is X.
    2. What would your cash price be?
    3. How far can you come down in price to meet me?
    4. What? or Wow.
    5. Is that the best you can do?
    6. Ill give you X if we can close the deal now.
    7. Ill agree to this price if you.
    8. Your competitor offers.
    Jun 15, 2022

    Should I buy a car now or wait until 2023? ›

    Americans planning to shop for a new car in 2023 might find slightly better prices than during the past two years, though auto industry analysts say it is likely better to wait until the fall. Since mid-2021, car buyers have been frustrated by rising prices, skimpy selection and long waits for deliveries.

    What day of the year is cheapest to buy a car? ›

    Just like other retailers, auto dealers have Black Friday car sales with excellent deals. In addition to being part of the long Thanksgiving weekend and the kick-off to the holiday season, Black Friday also sits at the end of the fall sell-off season.

    What is the slowest month for car dealerships? ›

    The discounts on new cars typically follow a trend that coincides with the introduction of new models. In general, the more new cars there are coexisting with old models, the better the savings. The months of January through April are generally slow-selling ones and have the smallest discounts off MSRP.

    Why is it important to haggle when negotiating to buy a car? ›

    Bargaining may be an easier price-setting mechanism than changing a posted price every day or week.” Plus, if a customer walks in offering to pay a hair below the list price, the dealer may actually come out ahead by cutting a deal and saving on the inventory cost.

    What credit score is needed to buy a car? ›

    In general, you'll need a credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required to finance a car loan varies by lender. If your credit score falls into the subprime category, you may need to look for a bad credit car loan.

    What are the disadvantages of dealership financing? ›

    Cons: May have higher rates than direct lending. High-pressure loan practices. Hidden fees due to kickbacks and commissions from a lender to the dealer.

    What is the 20 4 10 rule? ›

    20% down — be able to pay 20% or more of the total purchase price up front. 4-year loan — be able to pay off the balance in 48 months or fewer. 10% of your income — your total monthly auto costs (including insurance, gas, maintenance, and car payments) should be 10% or less of your monthly income.

    Will the IRS know if I buy a car with cash? ›

    Yes. Once the dealership receives cash exceeding $10,000, a Form 8300 must be filed. The deal not going through may in fact be an attempt to launder illegal funds. If $10,000 or less was received by the dealer and the deal was cancelled, the dealer may voluntarily file a Form 8300 if the transaction appears suspicious.

    Should I tell a car salesman I'm paying cash? ›

    Paying cash may hinder your chances of getting the best deal

    "When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains. "So if you tell them up front you're paying cash, the dealer knows he has no opportunity to make money off you from financing.

    Which brand of vehicle is the most reliable? ›

    What is the most dependable car brand? Here are the brand rankings based on the number of problems per 100 vehicles, according to J.D. Power's 2023 U.S. vehicle dependability study. The industry average is 186. The highest-ranking premium brand was Lexus, and Kia was the highest-ranking mass market brand.

    Can I ask car dealer to lower price? ›

    The short answer is yes. However, for many, even the thought of negotiating new car prices can seem intimidating. Treat this experience like any negotiation and go in with a plan. The more thought you put into it upfront, the more confidence you'll feel about speaking with your dealer about the price of your new car.

    What is a good interest rate for a car for 72 months? ›

    Auto Loan Purchase Interest Rates
    Payment PeriodPurchase APR* "As Low As"Payment per $1,000
    Up to 60 Months5.99%$19.33
    Up to 66 Months6.24%$17.94
    Up to 72 Months6.49%$16.81
    Up to 75 Months6.74%$16.38
    4 more rows

    What not to say to a dealer? ›

    Things to Never Say to a Dealer
    • “I'm ready to buy now.” ...
    • “I can afford this much per month.” ...
    • “Yes, I have a trade-in.” ...
    • “I'm only buying the car with cash.” ...
    • “I'm not sure…which model do you think I need?” ...
    • “Oh, I've wanted one of these all my life.” ...
    • “I'll take whatever the popular options are.”

    What not to ask a car salesman? ›

    5 Things to Never Tell a Car Salesman If You Want the Best Deal
    • 'I love this car. ' ...
    • 'I'm a doctor at University Hospital. ' ...
    • 'I'm looking for monthly payments of no more than $300. ' ...
    • 'How much will I get for my trade-in? ' ...
    • 'I'll be paying with cash,' or 'I've already secured financing. '
    Aug 19, 2019

    What is out of the door price? ›

    The out-the-door price is a term that describes the total cost of the vehicle. It truly is what it says — it is the total cash price that you will pay to walk away with keys to the car. This cost often includes a variety of extras, including some of the dealer's expenses associated with the car.

    Is 50% down on a car too much? ›

    When you make a really large down payment, say around 50%, you're going to see your auto loan really change for the better. Making a down payment as large as 50%t not only improves your chances for car loan approval, it also: Reduces interest charges. Gives you a much smaller monthly payment.

    Does a higher down payment make your offer stronger on a car? ›

    If you have no credit or a lower FICO score (about 620 or below), a larger down payment can improve your chances of being approved for an auto loan. And if you are approved, you may qualify for financing with better terms and a lower interest rate.

    What is invoice price vs MSRP? ›

    Invoice price (or dealer price) is the amount that the dealer paid the manufacturer for the car. MSRP is the “sticker price,” which is the amount that you will pay the dealership.

    What is the monthly payment on a 100k car? ›

    How much car can I afford based on salary?
    Annual salary (pre-tax)Estimated monthly car payment should not exceed
    $50,000$416 per month
    $75,000$625 per month
    $100,000$833 per month
    $125,000$1,042 per month
    2 more rows
    Apr 4, 2023

    Why leasing is smart? ›

    Benefits of leasing usually include a lower up-front cost, lower monthly payments compared to buying, and no resale hassle. Benefits of buying usually are car ownership, complete control over mileage, and a firm idea of costs. Experts generally say that buying a car is a better financial decision for the long term.

    How much should I save before leasing a car? ›

    It's recommended you spend no more than about $2,000 upfront when you lease a car. In some cases, it may make sense to put nothing down and roll all of your fee costs into the monthly lease payment.

    What is the best way to get out of a car loan? ›

    The best way to get rid of a car loan is to pay off the balance of the loan. Check with your lender to see if a prepayment penalty will apply. If not, you can make extra principal payments to pay off the loan balance early. Then you will own the car outright and can keep it, sell it or trade it in.

    How to get rid of a financed car without hurting your credit? ›

    Sell the vehicle.

    If your car is worth as much as or close to the balance on your account, selling it could enable you to pay off the loan without harming your credit.

    How bad is negative equity on a car? ›

    Having negative equity in your car could leave you in a tough place if you sell or trade it in, and make it difficult and expensive to get a new ride. Negative equity simply means that you owe more on your car loan than the vehicle is worth — also referred to as being “upside down” on your car loan.

    What happens if I put an extra 100 my car loan? ›

    You can always make a higher payment and reduce your loan balance. However, if you make an extra payment, your car payment will not go down. The auto loan company instead reduces your loan balance and shortens the term of your loan.

    What happens if I pay 100 extra on my car loan? ›

    Your car payment won't go down if you pay extra, but you'll pay the loan off faster. Paying extra can also save you money on interest depending on how soon you pay the loan off and how high your interest rate is.

    What is the car loan rule? ›

    Basically, the rule goes that you provide a down payment of 20% of the balance, sign a loan for a four-year period, and pay no more than 10% of your monthly income on car expenses. These expenses include any money you put towards your new vehicle, including gas, insurance, and loan payments.

    Should I tell car salesman I paying cash? ›

    Paying cash may hinder your chances of getting the best deal

    "When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains. "So if you tell them up front you're paying cash, the dealer knows he has no opportunity to make money off you from financing.

    Should you tell a car salesman you want to pay cash? ›

    Don't settle on paying with cash or even mention it until the final price is negotiated, especially at a dealership. Holding back may net you a better deal at the dealership. From there, use your skills to negotiate an even better deal when you bring cash to the table.

    What really happens when a car salesperson goes to talk to the manager? ›

    If it's likely they can close the deal today, the sales manager will work the salesperson to retain as much margin in the deal as possible. If the deal feels shaky, the sales manager might coach the salesperson to negotiate a slightly lower price to see if they can move the needle.

    How do you tell if a car dealership is ripping you off? ›

    How to Not Get Ripped Off When Buying A New Car
    1. The Car Only Comes With Dealer-Installed Options. ...
    2. They Want to Know Your Target Monthly Payment. ...
    3. They Sold That Car, Here's a Higher-Priced Model. ...
    4. They Pressure You to Get an Extended Warranty. ...
    5. They Want to Mix Financing and the Price of the Car.
    Aug 16, 2021

    How not to get scammed when buying a car from a dealership? ›

    Here are tips for avoiding auto scams.
    1. Too good to be true? If a price is amazing, an old car looks perfect, or a rare vehicle seems cheap, there's a good chance it's a scam.
    2. Take your time. ...
    3. Check the photos. ...
    4. See it in person. ...
    5. Take a drive. ...
    6. Check the VIN. ...
    7. Are there liens?

    How do you turn down a car salesman? ›

    So one experienced car shopper recommended saying no firmly and politely right upfront. You can say, “I know you have to present these items to me. But I'm not interested in buying anything extra.” At this point, the finance and insurance manager will probably back off.

    What percentage can you negotiate off a used car? ›

    Based on your pricing homework, you should have a good idea of how much you're willing to pay. Begin by making an offer that is realistic but 15 to 25 percent lower than this figure. Name your offer and wait until the person you're negotiating with responds.

    Why do car salesmen want money down? ›

    Without getting into the jargon behind it, the time value of money states that money in hand now is worth more than in the future due to inflation. Therefore, a big down payment will usually cause a salesman's eyes to light up. Furthermore, they may also be more likely to work with you on a deal.

    Is it better to pay cash or finance a car? ›

    Paying cash for your car may be your best option if the interest rate you earn on your savings is lower than the after-tax cost of borrowing. However, keep in mind that while you do free up your monthly budget by eliminating a car payment, you may also have depleted your emergency savings to do so.

    What is one disadvantage if you buy a car with cash instead of getting a loan? ›

    Takes time to save.

    One of the biggest drawbacks to buying a car with cash is that it takes a lot of time to save up enough money.

    Why should you never tell a salesperson the maximum amount you can afford per month? ›

    Do not say you want the monthly payment to be no higher than a certain number. A car salesman tries to maximize profit, and will simply artificially lower your payment by extending the life of the loan, or by requiring more money upfront as a down payment.

    Do car dealers like when people pay cash? ›

    Car dealers prefer finance customers over cash buyers. The main reason is profit on the back end, the F&I office. Statistics show finance buyers offer a better opportunity for the dealer to earn profit in the back end. Other than that it makes no difference to a car dealer.

    Who is the highest manager at a dealership? ›

    The dealership's general manager is the highest authority at the business. He or she presides over both the sales and service departments.

    What a salesperson should not do? ›

    • Don't lie… ever. ...
    • Don't go missing in action. Trying to locate your sales personnel without any luck can be really frustrating, particularly when you urgently need them. ...
    • Don't focus on yourself. ...
    • Don't show up unprepared. ...
    • Don't say, “It's not my fault” ...
    • Don't just sell products or services.
    Apr 8, 2016

    What is the success rate of a car salesman? ›

    The average dealership has a 66 percent turnover rate among sales consultants, up 4 percentage points from the previous year, according to a study compiled in 2014 for NADA by ESI Trends, a Florida-based research firm.


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