Paying In Full = Increased Bargaining Power?

[FinalDrive]

I've never paid for a car in full but one of my credit cards has a really good APR offer so I've decided to just use that to pay for my 135i in full (+ the down payment I was going to put down). So effectively, from the point of view of me towards the dealership, I will be paying for the car in full, up front.

I was just curious if anyone knows or has any experience paying up front in full and if that means dealerships are a bit more negotiable on the price? I got the whole "MSRP only" when I placed my order but more and more people are getting good deals on 135s and I'd like to as well. I'm hoping that paying in full will give me even more leverage to negotiate a better deal.

Any thoughts or info would be appreciated. (And I'll post pictures soon! :biggrin. Thanks.

[BJDrew]

Most dealers will not allow you to pay in full with a credit card - it's not smart for them as you can put a stop payment on it of you like and they will have to pay a 1% - 3% fee to the credit card company. You usually can only put up to a few thousand on the card.

Also, dealers MAKE money on financing. They might be more flexible if you financed the car through them at a crappy rate. The banks give them kickbacks on that stuff - in which case you can finance with them then pay the whole loan off a month or so later.

If you call around, you usually can get a better than MSRP deal. Fayetville, NC is a great dealer that way as is Bloomfield, NJ.

[jkp1187]

Originally Posted by BJDrew

The banks give them kickbacks on that stuff - in which case you can finance with them then pay the whole loan off a month or so later.

This is the way to do it. In fact, he signed a horrible loan agreement that had what amounted to a balloon payment after 36 months when he went to buy a Pontiac G6. In exchange, they sold him the car for slightly below invoice. He made one payment on the loan, then promptly wrote a check for the full amount.

In theory you could do this via a cash advance from your credit card, if you have a good rate and you're confident they aren't going to jack you on the APR later on. (Which they MIGHT do.) They typically will have a 3% transaction fee for such a move, but you might be able to convince them to waive the fee if you call in and do the payment as a balance transfer.

(It really paid off when the engine caught fire and exploded in his driveway within six months of taking delivery, totaling the car. The best part was that the insurance company gave him MSRP for the car, so he actually made $2,000 on the deal....but I digress.)

[dbtheo]

Originally Posted by FinalDrive

I've never paid for a car in full but one of my credit cards has a really good APR offer so I've decided to just use that to pay for my 135i in full (+ the down payment I was going to put down). So effectively, from the point of view of me towards the dealership, I will be paying for the car in full, up front.

I was just curious if anyone knows or has any experience paying up front in full and if that means dealerships are a bit more negotiable on the price? I got the whole "MSRP only" when I placed my order but more and more people are getting good deals on 135s and I'd like to as well. I'm hoping that paying in full will give me even more leverage to negotiate a better deal.

Any thoughts or info would be appreciated. (And I'll post pictures soon! :biggrin. Thanks.

You'll get a big fat "no" on the cc from your dealer. And the above poster is correct, dealers in general could car less if you are paying cash, that benefits them in no particular way. The sales guys don't mind cash as it sometimes speeds up the buying process

[atr_hugo]

But the F & I guy will sit there with a forlorn look on his face when you say no to all the add-ons and then sees She Who Must Be Obeyed whip out a check for the total transaction price. ; -)

[Bdh821]

I paid for my car cash... I got $0 off MSRP

[dbtheo]

Originally Posted by atr_hugo

But the F & I guy will sit there with a forlorn look on his face when you say no to all the add-ons and then sees She Who Must Be Obeyed whip out a check for the total transaction price. ; -)

so very true... He HATES cash deals, me, I don't care, whatever makes life simpler for me & those sitting across the desk from me

[All4One]

Originally Posted by FinalDrive

I've never paid for a car in full but one of my credit cards has a really good APR offer so I've decided to just use that to pay for my 135i in full (+ the down payment I was going to put down). So effectively, from the point of view of me towards the dealership, I will be paying for the car in full, up front.

I was just curious if anyone knows or has any experience paying up front in full and if that means dealerships are a bit more negotiable on the price? I got the whole "MSRP only" when I placed my order but more and more people are getting good deals on 135s and I'd like to as well. I'm hoping that paying in full will give me even more leverage to negotiate a better deal.

Any thoughts or info would be appreciated. (And I'll post pictures soon! :biggrin. Thanks.

You can put a bluff but could backfire. Tell them you have a better deal and you are cancelling order. Be ready to suffer the consequence. Are you ready for that, just in case? A lot of dealers do surf this forum so your hand is tipped.

[BimmerBoi2100]

I saw one guy get turned away from a Chevy dealership because he attempted to pay for a 35k truck in cash. He literally dumped the cash on the salesmans desk. Needless to say everybody turned and looked. We asked why he was turned away and our salesman said two words: DRUG DEALER. Judging by the guy's appearance we could see that..but we were still suprised they didn't accept his money. That dude was pissed!

[All4One]

Did he return with a lead sprayer? Mwa ha ha ha.

[BimmerBoi2100]

I don't know..lol. We didn't want to stay and find out. We told our salesman we'd come back in the morning.

[All4One]

Originally Posted by BimmerBoi2100

I don't know..lol. We didn't want to stay and find out. We told our salesman we'd come back in the morning.

Good choice, if it would have been me, i would have come back later in the year. LOL.

[135i_TT]

hey im a car salesman i sale mazdas but actually im planning on paying over half the amt of my 135 when i turn 23 in december but as for the drug dealer comment:
we had a guy come in wanting to buy a fully loaded mazda and had a high credit score and a lot of cash..
when they ran his credit a note came up saying he was wanted in another state and if we found him to report him to the state police but oddly i think they let him buy a car lol.

[BimmerBoi2100]

My wife didn't want to come back at all...we did anyway but couldn't close the deal. We bought a Mazda CX-7 instead.

[All4One]

Originally Posted by 135i_TT

hey im a car salesman i sale mazdas but actually im planning on paying over half the amt of my 135 when i turn 23 in december but as for the drug dealer comment:
we had a guy come in wanting to buy a fully loaded mazda and had a high credit score and a lot of cash..
when they ran his credit a note came up saying he was wanted in another state and if we found him to report him to the state police but oddly i think they let him buy a car lol.

oH WELL, at least they've let him buy a car..then report it to the rangers.ha ha ha.Its is better that way than letting him just grab a car. Mazda? for a fugitive? Disguising Huh?

[yourfriend]

my car was paid for in full. i think it just made the dealer like my family more.

like when he found out i was painting a fence in my yard, he called me to tell me a story about when he painted his fence as a kid.

cash=friend!

[135i_TT]

lol i know right i wonder what happened thats all the information our managers gave us im not sure if they really reported him or not. but as for cash=friend its true lol. i actually went and test drove the 135i and i told them im putting more then 20gs down and they were like hell yea well work with you ''money talks" the guy said lol.

[Nixon]

The answer a smart CA would give you would be "sure, money talks! Come on in, we'll make you a great deal!!"

Then when you get there, they will offer you the same deal that they offer everyone else.

I don't know how BMW does it. But in a lot of big dealerships, the Sales guys who make the decisions on prices don't belong to the same group as the Finance guys. They are separate, just like the Service guys are in a different group. For example, if a car needs serviced, the Sales guys have to "pay" the Service guys for the service done on the car being sold. Even though it is the same dealership's money going from one of it's own hands to the other.

That's how businesses break their profit centers down into units, so each team is accountable for their own profits (or losses).

Since the Sales team's quotas are based upon what business THEY do, and not what income the Finance folks generate, Sales could truly care less if the dealership makes more money off of a deal if it is financed or not. They are just trying to hit THEIR numbers. They aren't looking at the total amount of money the dealership makes with financing included. They are just looking at their own team's quotas.

The numbers the Finance team has to make are their own problem. Not the Sales team's problem.


Unless you are dealing with a tiny mom-and-pop dealership, I can't see how the Sales guys will offer you any better deal either for cash, or for credit.

[All4One]

Good point, reminds me of the casino ha ha ha.

[adrean8j]

Originally Posted by Bdh821

I paid for my car cash... I got $0 off MSRP

I used a loan from my bank and also got $0 off the MSRP. I did however get a 20% discount on the CF parts and Aero parts I ordered for my car. I did NOT get a 20% discount off of the labor and paint for said parts.

[tkbr0wn]

You should never even discuss how you are paying for a car while negotiating. Let them think you are just a normal customer who is going to take the dealer fianancing, then when you walk into the fianance office, you pull out your pre-approved check and tell them what interest rate you have secured. Usually (not always) they will magically be able to match that rate. I always say unless you can beat it by .25 then I am not interested. More often than not, they can make it happen.

Bottom line... Always have your financing in order BEFORE you go shopping.

[Nixon]

Originally Posted by tkbr0wn

You should never even discuss how you are paying for a car while negotiating. Let them think you are just a normal customer who is going to take the dealer fianancing, then when you walk into the fianance office, you pull out your pre-approved check and tell them what interest rate you have secured. Usually (not always) they will magically be able to match that rate. I always say unless you can beat it by .25 then I am not interested. More often than not, they can make it happen.

Bottom line... Always have your financing in order BEFORE you go shopping.

DING DING DING DING!!! We have a winner. It's the second round of negotiations. First round is on price alone with Sales, the second round is on interest rate with Finance.

If the sales person has gotten you negotiating on monthly payments instead of price, you've already lost control over the price.