5% off invoice, but only if you kick back 10% of invoice in interest payments?

JeepScares

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Numerous Jeep buyers report that they have made deals at 5% or more below the published invoice prices.

My question; are you more or less forced to use dealer secured financing to get those kinds of deals?

I have saved up to buy our new Rubicon and want to pay cash, and have found that the easy to work with dealers simply say "it's an extra $2000 to self finance or pay cash", while other dealers try to avoid talking about anything but dealer finance as if that is the only possible way to buy a car, and decline to quote a discount below invoice for a cash sale.

I am finding all the claims made here of great discount deals distracting, because very few people seem willing to mention all the costs.

For example; one well known western states discount dealer explicitly advertises that their published price does not includes an additional $2000 up charge if you self finance, and they only let you put $10,000 down on their finance package for a $50,000 Rubicon. So let's say you buy the Rubicon with the $10,000 down payment. Tax, tag, title and fees gets you up to $57k +/-. You finance $47,000 at 4% to get the great price, and over the next 5 years you pay nearly $5,000 in interest. The dealer gets half of that interest as the finance reserve, and the bank it partnered with gets the base buy rate. The dealer will only go below invoice if you dealer finance. They give up profit on the sale to make a similar if not greater profit on the financing. Now, if you were absolutely, definitely, no doubt about it, going to rent money to pay for your Jeep it may not matter who you rent money from. It may just be a given that you are going to pay the interest rate and suck it up. However, if you prefer to pay cash in full, the difference in deals that are available seems palpable. In other words, a deal where you save $2500 only because you are willing to pay an extra $5000 doesn't seem like an actual savings. It seems like you are getting 5% discount if you are willing to kick back 10% as interest payments.

For example; I spoke with another dealer who published a 5% below invoice price and said he would sell at the price but was very clear that they charge a non negotiable $999 dealer fee. I appreciated the transparency, and their strategy, but also have to consider that this is not really a 5% below invoice deal.

The dealers that make it easy to see how they make their money are easy to talk to and work with. Many dealers seem to want to obscure the actual cost of a purchase. Those guys are a pain to deal with.

Because of the current market conditions, where supply is limited, I am finding myself speaking with dealers that I would not normally deal with simply because they have one of the very few in stock vehicles I am interested in. Normally, I order my cars and find a dealer that is willing to make an easy extra windfall sale, but in the current market it seems like dealers that have a vehicle that is actually in demand want to hold out and make the maximum profit they can make. More power to them, but I want to get the car I want and get a good deal too.

I would find it helpful to better understand if some of the buyers who are getting 5% off invoice deals are able to self finance or if these deals are more or less made exclusively to people who use dealer financing.

I would like to understand what the actual cost of outright ownership for a new Jeep is rather than equate it to some invoice figure that is likely more than the dealer actually pays for the car, and less than the purchaser actually ends up paying for the car.

Can you help? Will you describe the details of your 5% or better deal?

Thank you!





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1quick1

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In CO there isn't a loan payoff penalty so if they forced you into the financing you could just immediately pay it off when the first payment comes.

I am fortunate enough to get employee discount which is the 5% so I don't have to negotiate but the CO dealers all force you into a $400-600 dealer fee.
 
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I don't know how Utah governs pay off penalties, but one dealer told me they require 7 payments before payoff is allowed, so in the case of $45k at 4% for 60 months $1k is paid in interest before you can cash out.
 
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crazychile

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When I bought my 2018 JLU I found a dealer in state that would do 5% below invoice with the Jeep Wave program, and $150 processing fee. A local dealer matched the deal. I placed a special order for exactly what I wanted with a $500 deposit. I brought them a check from my Credit union so there was no dealer financing.

My observation is that when you get into the 7+% below invoice deals there is almost always a catch. Either the fees are high or you have to go with their financing at a higher rate than what you could get elsewhere. I think it's possible that some dealers that wouldn't do below invoice deals before have discovered that they are losing a lot of deals. As a result they may have adopted the sales model of promise cheap prices, but make it up on crazy fees and/or financing, which effectively puts the price back near retail, but psychologically the customer feels like they got a deal.
 
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JeepScares

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That's pretty much what I had been expecting to do, but now I am looking at in stock vehicles because placing an order seems like signing up for a guessing game.
 

Cypher

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Call Superior Dodge in Conway Arkansas. Ask for Kim the internet sales manager. They will do the 5 or 6% below invoice (maybe better right now on some) and have no issues paying cash. I bought 2 there that way.

here in AZ, I used Tempe dodge, they matched a 6% below invoice cash deal on my 3rd. I called and spoke with the internet sales manager, told them what I would pay, and made a deal. I was worried they would try something when I got there, but no issues. I was in and out. They were best dealer experience ever.
 

JayJay

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The one dealer here in Georgia that gets mentioned frequently is very upfront about the deal ; 5% off invoice for a straight cash sale, 6% off for a cash sale along with Tread Lightly, 7% off invoice with Tread Lightly and dealer financing. But, the dealership also states upfront that they charge an EDP (Extra Dealer Profit) document fee of ~$600 so, in effect, you should deduct 1% or more from the above discounts. My local dealer, where I've purchased three prior cars, met the same deal but wasn't very excited about it.

Later,
Johnny
 
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JeepScares

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Thanks.
Tempe Dodge, has a Rubicon that is close to what I want but not close enough for me to make an offer. Their published discount price is at Invoice, and they will let you have an extra $1000 off if you give them the financing business.

If they had the Rubicon that I want I would make a real offer, but having already made a few offers elsewhere in the region, I am beginning to think that many of the western states dealers want to hold on to what they have until they get the price they want.
The win-win scenario where a dealer makes a quick extra sale from an out of town customer only seems to work when the dealer considers that they nave a limitless supply of vehicles, and that's not the case right now.
 

BullMoose1776

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I got about 8% off a spec purchase. If you want to know more, PM me. I financed on my own.
 

gofastguy

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Call Superior Dodge in Conway Arkansas. Ask for Kim the internet sales manager. They will do the 5 or 6% below invoice (maybe better right now on some) and have no issues paying cash. I bought 2 there that way.
Kim and Cameron at Superior are the real deal. Bought my 2018 for the 6% under TL deal without discussing financing since I had no need. Showed up with a check from Lightstream for about half and a personal bank check for the other half. Easy peasy in and out with no games. $130 doc fee and no other charges, not even tax for Ohio. Naturally you need to be in a position where you do not need to finance the tax since it had to get paid to buy plates
 

Jebiruph

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I don't know how Utah governs pay off penalties, but one dealer told me they require 7 payments before payoff is allowed, so in the case of $45k at 4% for 60 months $1k is paid in interest before you can cash out.
What would stop you from making the big payment (all but the last 6 payments) first instead of last to reduce the interest paid.
 

Pingbling23

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The one dealer here in Georgia that gets mentioned frequently is very upfront about the deal ; 5% off invoice for a straight cash sale, 6% off for a cash sale along with Tread Lightly, 7% off invoice with Tread Lightly and dealer financing. But, the dealership also states upfront that they charge an EDP (Extra Dealer Profit) document fee of ~$600 so, in effect, you should deduct 1% or more from the above discounts. My local dealer, where I've purchased three prior cars, met the same deal but wasn't very excited about it.

Later,
Johnny
i purchased through mall of georgia and it couldnt have been easier. the deal was as you stated. they financed through capital one and they beat my local credit union by almost a half a percent.
 
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JeepScares

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What would stop you from making the big payment (all but the last 6 payments) first instead of last to reduce the interest paid.
I like the way you think, that is a very creative work around. It's a great question, and I guess I would have to scrutinize the contract to learn the answer.

Thank you.
 

Jebiruph

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I like the way you think, that is a very creative work around. It's a great question, and I guess I would have to scrutinize the contract to learn the answer.

Thank you.
I think they can't legally prevent you from repaying the loan as early as you want, so I don't think there will be anything in the contract restricting early pay off. This subject came up along time ago and it was advised to make one regular payment before paying off the loan. That being said, if you make a verbal agreement to keep the loan at least 6 months, then you need to decide what the right thing to do is. Either way, paying everything but the last 6 months payments up front lowers the interest you pay and the dealer terms are satisfied.
 

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