Possible dealership trick?

[Rothgray]

I am helping a friend acquire a 2018 GT350, looks like a decent deal, about $4500 off MSRP, from a $63,000 sticker.

Anyway, There is a trade involved, but the dealer won't really finalize trade numbers until after my friend applies for financing, so they can see how much back end profit they can make.

I've seen a lot of tricks from car dealers, and feel I'm a fairly seasoned buyer, but I haven't seen this one yet really. Anyone have insight?

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[O.L.]

They should have the final price before financing.
Ex: 60000 - trade value + tx = final price to ask for financing

 

[Rothgray]

They should have the final price before financing.
Ex: 60000 - trade value + tx = final price to ask for financing

That was exactly my notion, and how I've always bought cars as well.

The dealer flat out said "Well, I'll have to see how much I make on the back end, in order for me to give you this deal."

I immediately told my friend "Theres 630 GT350's on dealer lots still, let's move on."

 

[O.L.]

I'd do the same!

 

[ctandc72]

Keep in mind - your friend still might end up with a GOOD deal, regardless of what the dealer makes on the back end. Incentives and other rewards from financing options / institutions can mess with the numbers. Regardless, I find it really weird that the dealer said that about "..on the back end". And I do agree that your friend should have a buyer's worksheet / agreement written up before ever approaching the Finance office - which should list sale price, trade allowance etc.

 

[Jetnoise]

Why not tell them it's a cash deal? Your going to bring a check from your credit union.....
Just need the number$

 

[Rothgray]

Why not tell them it's a cash deal? Your going to bring a check from your credit union.....
Just need the number$

Then they would immediately devalue the trade. Ive seen trade allowances go against sales prices of cars (which is why I only deal in ACV), but I've never seen both cars be so hinged on the finance rate.

 

[Jetnoise]

Then they would immediately devalue the trade. Ive seen trade allowances go against sales prices of cars (which is why I only deal in ACV), but I've never seen both cars be so hinged on the finance rate.

ACV? Wholessale to wholesale v retail to retail???What rate are you referring to? Bad credit? Money is very cheap today.
You can Pull the trade out of the equation or ...
You can take their "rate" ...refi ....& if in less than 30 days... guess what that does to the finance guy and the perceived profit your worried about by leaving the trade in the structure.
If you havent shopped rate before walking in you've done yourself a disservice. They will match it or beat it.

Structuring the deal is structuring the deal. They want the sale cash ...or financed trade or no trade.

 

[Rothgray]

ACV? Wholessale to wholesale v retail to retail???What rate are you referring to? Bad credit? Money is very cheap today.
You can Pull the trade out of the equation or ...
You can take their "rate" ...refi ....& if in less than 30 days... guess what that does to the finance guy and the perceived profit your worried about by leaving the trade in the structure.
If you havent shopped rate before walking in you've done yourself a disservice. They will match it or beat it.

Structuring the deal is structuring the deal. They want the sale cash ...or financed trade or no trade.

Trade stays in the deal, but the issue is, they're hinging the trade value vs. what they get on the loan. I've never seen this before ever. It's almost as if they realized they maybe not reaching the profit they want, but are ok to move on the deal as long as they can do well on the financing. My friend can easily get a good rate through a number of banks, but the dealer flat out said "Come in here with your own financing, or pay cash, I'll devalue the trade."

Again, plenty of GT350's on the lot. I guess I figured out their angle.

 

[Jetnoise]

Trade stays in the deal, but the issue is, they're hinging the trade value vs. what they get on the loan. I've never seen this before ever. It's almost as if they realized they maybe not reaching the profit they want, but are ok to move on the deal as long as they can do well on the financing. My friend can easily get a good rate through a number of banks, but the dealer flat out said "Come in here with your own financing, or pay cash, I'll devalue the trade."

Again, plenty of GT350's on the lot. I guess I figured out their angle.

You have missed my point.
Try this on for size.
Tell them you won't accept a rate less than 22% apr
They load up your trade value...so you think...
Take delivery
Drive to his bank & refi at 3.4

 

[Jetnoise]

And to add more value to your trade ....
While in the f&i office get that $650 gap coverage and the 7k extended warranty.
None of that rust and dust stuff that's put physically on the car...
2 hours later at his bank he cancels all that fat margin stuff and walks away with what you think is fair in his trade.

 

[Rothgray]

We switched dealers, and got the same color, less a few options he did not care for, black roof, car cover etc. Got it for $1000 cheaper too.

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