Sime

How greedy can some dealers get?

They are ALREADY making FULL retail on the car (over $4000 profit) and then some with options, dealer incentives and maybe a price hike over retail.

Sure, dealers have a 'hold back' fee that they get for every new car. It's a proportion of the price of the car that the manufaturer credits to the dealer when the dealer pays for the car at time of delivery to the showroom. It's designed to protect the dealer by theoretically giving him money to make the interest payments on the money he had to outlay for buying the car up front. If the dealer sells the car as soon as it is delivered, they keep all of the hold back fee as the customer has just paid the dealer back for the car and it's a bonus for them, but if it sits for 2 months, the hold back provides the dealer some financial compensation.

But that plain sucks. They just got your car in and are trying to screw you for as much money as possible. If the dealer was making NO money on your car, then I could understand them getting antsy about wanting to clear it off the lot. But the way they are acting....That's just greed and is not on in my books! If you ABSOLUTELY have to, give them 10 bills and ask him to keep the car two weeks for you. Otherwise, please go to another dealer (or buy out of state) that will not try and rip you off. You are a premium customer and deserve better.

Mate, if you DO buy from this guy, don't get ANY options from him. Get them from Trevor at H&A accessories on this forum. H&A are waaaaay cheaper than the dealer and Trevor is a much nicer guy!

Cheers,

Schatten

btw, Andre - if you dont mind me asking - what are the options on the car and how much are you paying for it?

If its anything higher than MSRP, I'd go ahead and skip out on the deal and I'm sure we (the people of this board) can find you one somewhere in the US that meets your scheduled needs.

drmark

I'm just wondering.....
$30,000@7.5% 60 months=601/month
$30,000@8.0% 60 months=608/month
You're going to buy a $30000 car and you're worried about 7 bucks a month? doesn't make sense to me.
Mark
01 TheBlackBeast (waiting for Rick's red/blk wheel)#0090

Tex_S2K

If Greenspan drops the interest rate 1/4 point on the fed fund, it will probably be at least another 2-3 weeks before any lending institution follows for a car loan, and then, it will be only a small $ amount in the payment. Sorry to disagree with others, but, if you do not have a signed contract with earnest money, then you have not "bought" the car. The dealer is right in asking you to ante up.

Chris S

I understand & agree w/ the dealer's position completely. While the transaction profit is not materially different by waiting, the capital tied up in the car negatively impacts measures of shareholder wealth creation such as Economic Value Added (EVA) and Return on Invested Capital (ROIC). W/o getting into a lengthy lesson on corporate finance, let me just assure you that the dealer is just practicing sound financial management.

Add in the dealer's additional risk & cost of ownership over the holding period, and it's clear that the dealer has nothing to gain by waiting. I can understand your disappointment, but I'd go ahead and buy the car now. I have no idea what current rates are (I pay cash for anything I'd consider a toy), but on a 60 mo., $30K loan, cutting the rate from 8% to 7.75% produces a whopping monthly savings of $3.58 (from $608.29 to $604.71).

rocketman

just an FYI:

In addition to the "hold back" (I'm not sure there is one for the S2000), dealers also pay "loan" interest on their inventory at the beginning of the month. If they can move a car off the lot, they don't have to pay interest on that car. I think that is partly the reason for the hold back - to compensate the dealer for the interest on the inventory cost of the car. If there is a hold back and the car gets sold in the first week or two of delivery, the dealer gets a "double delite" - keeps all the holdback and doesn't have to pay any interest.

That's why it's sometimes good to go car shopping near the end of the month. When I was looking at buying cars before settling on the stook, I had a *&^*&@ Porsche saleman call me on New Years Eve (during the day) to try to get me to buy before the new year!

lvs2k

Andre, find another dealership!

Andre

K guys here is the deal, the reason we have to wait for the rate drop is because my dad isnt gettting a car loan. He is refinancing the house with 0 points with an additional 30k, this way, if the rates drop, the payments dont increase on a per month basis for him, and there is 30k added to the loan. Since im paying him back, he wants a little security on his part you know. 5 year loand = 650 a month, 30 year loan = 650 on my part a month, but for him that equals no pressure. If i fall through, he can just cover me for a month, not have to dish out 650. In 5 years, i pay him back, then he ends up paying less everymonth than he is now. If interest rates go down another 1/4 that would be like 1 point off where we are now. 1 point off a big loan can amount to like 15k savings a year.
Andre

KenS2K

I got my S2000 when the individual who ordered it was not ready to take delivery for a few more weeks. Dealer did not want to store it and so offered it to me at MSRP.

Take out a loan a just pay it off when your dads loan happens.

Flayer

Andre, my 2 cents is this: Go ahead and scrape up the money to get the car now (that engine is callin' your name!). When the rates drop, then it will still be a few weeks before the lending institutions will pass a lower rate to the customers. That's almost like a month out. Since your dad is doing a refinance deal, then get a loan now with no prepayment penalty. Then when your dad's refinancing finishes, pay off your original loan. There might be some overhead, but you get the dealership off your back, you get your new S2k, and your dad can wheel and deal longer for better house refinancing, without worrying about time pressures.