Cant get below invoice pricing with PedFed financing?

[Chocolate Thunder]

PLEASE NO! Don't do this!

The reason you get a discount for using their financing source, is (obviously) the finance company makes money and shares it with the dealer. Two things are going to happen when you do this (one in the future).

The first, is the dealer is counting on the rebate from the finance company to offer you the lower price. If you pay off the loan before a certain amount of time (usually 90 days) the dealer will not get this incentive. Great. That dealer that worked so hard for you now lost $$$. Do you really want to punish your dealer? (rhetorical...)

The second is that if people keep doing this, finance companies will stop offering the rebates and the dealers won't be able to offer the discounts - Affiliate Pricing anyone?? Gone right?

So yes, you can do this and the money you "saved" by refinancing really cost the dealer money. The same dealer willing to give you the great price below invoice because they were counting on the rebate.

Don't bite the hand that feeds you as they say. Otherwise start kissing the 7-8% under invoice goodbye.

This doesn’t make a lot of sense to me. The dealership will make less money, they won’t lose money. Do I want to punish the dealership? Not particularly, but helping them make maximum profit is not my goal. Just like helping me pay the lowest price I possibly can isn’t their goal. You think lenders will stop rebating several interest points to car dealerships because a tiny minority of buyers figure out how to keep those points for themselves? That’s like saying Visa or MasterCard will go out of business if you pay off your balance each month because they won’t make any money from interest. If EVERY customer did this, they would. But that’s not how it works. They’re multi billion dollar conglomerates for a reason. Me paying my balance in full is not keeping them from making a profit.

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[ECP]

This doesn’t make a lot of sense to me. The dealership will make less money, they won’t lose money. Do I want to punish the dealership? Not particularly, but helping them make maximum profit is not my goal. Just like helping me pay the lowest price I possibly can isn’t their goal. You think lenders will stop rebating several interest points to car dealerships because a tiny minority of buyers figure out how to keep those points for themselves? That’s like saying Visa or MasterCard will go out of business if you pay off your balance each month because they won’t make any money from interest. If EVERY customer did this, they would. But that’s not how it works. They’re multi billion dollar conglomerates for a reason. Me paying my balance in full is not keeping them from making a profit.

they will lose money in the sense that they were counting on a rebate that is not now appearing (I'm not saying they are going to lose money on the deal, but they are going to lose the money they were counting on). Be upfront with them and tell them you're not using their financing - you won't get the discount because that's factored in.

There is nothing stopping you from doing this. There are all types of things you can do to save yourself money and have a company foot the bill - that just results in higher prices for everyone.

I don't know how you go from "stop rebating" to "going out of business". That's silly. The rebates will stop if enough people do that, you promoting on this forum people do that (and its also promoted on other forums, on finance forums, by word of mouth) and eventually it gets to the tipping point and it won't be offered.

Again - nothing stopping you. There are all kinds of things people can do that are legal, but not necessarily ethical. Its an individuals choice.

 

[LooselyHeldPlans]

Don't bite the hand that feeds you as they say. Otherwise start kissing the 7-8% under invoice goodbye.

I got 8% below invoice and didn’t finance with the dealership. Everyone knew about it going into the transaction. So, it’s obviously not a requirement for anyone to make money.

 

[guarnibl]

PLEASE NO! Don't do this!

The reason you get a discount for using their financing source, is (obviously) the finance company makes money and shares it with the dealer. Two things are going to happen when you do this (one in the future).

The first, is the dealer is counting on the rebate from the finance company to offer you the lower price. If you pay off the loan before a certain amount of time (usually 90 days) the dealer will not get this incentive. Great. That dealer that worked so hard for you now lost $$$. Do you really want to punish your dealer? (rhetorical...)

The second is that if people keep doing this, finance companies will stop offering the rebates and the dealers won't be able to offer the discounts - Affiliate Pricing anyone?? Gone right?

So yes, you can do this and the money you "saved" by refinancing really cost the dealer money. The same dealer willing to give you the great price below invoice because they were counting on the rebate.

Don't bite the hand that feeds you as they say. Otherwise start kissing the 7-8% under invoice goodbye.

I agree.

I stick to my word. If we agreed on it, and it's a six month period, I will hold it for that time period.

 

[guarnibl]

This doesn’t make a lot of sense to me. The dealership will make less money, they won’t lose money. Do I want to punish the dealership? Not particularly, but helping them make maximum profit is not my goal. Just like helping me pay the lowest price I possibly can isn’t their goal. You think lenders will stop rebating several interest points to car dealerships because a tiny minority of buyers figure out how to keep those points for themselves? That’s like saying Visa or MasterCard will go out of business if you pay off your balance each month because they won’t make any money from interest. If EVERY customer did this, they would. But that’s not how it works. They’re multi billion dollar conglomerates for a reason. Me paying my balance in full is not keeping them from making a profit.

The dealership is offering an additional percent off because they get a kick back from the bank. They only get that incentive from the bank if the customer keeps the loan for a certain amount of time at a certain $$$ value -- at least in my experiences.

My understanding of his comment was that if we refinance right away, and the dealership doesn't get the kick back, they are less incentivized now to continue passing that incentive to the customer. Thus, stick to your word and keep it for the period, or don't take the discount.

 

[rriglesias]

I got 8% below invoice and didn’t finance with the dealership. Everyone knew about it going into the transaction. So, it’s obviously not a requirement for anyone to make money.

Where was that? 8% looks like a considerate discount nowadays.

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