0% doesn't always mean 0%

[kootch88]

If a dealer says you can have zero percent or pay cash and the price is the same, make no mistake, you are paying for the 0%, it's just that the cash guy in that instance is over paying.

I'm not sure how all automakers work, but don't they always offer a huge discount if you do not use the 0%?

I do not work as a sales manager Dave, I just told you I showed my friend who used to be and where he was and his response was that what you said above was untrue with Ford anyway. Cash or finance made no difference to them in the price of the vehicle.

I am getting 2.9% at my Credit union, so I am okay with how things turned out and I am in love with my new toy. Can't wait to go to my camp next weekend and mow the hay from last year. I never got a chance to mow because I was busy remodeling the interior all summer. Plus I have a few piles of dirt I can move around to learn how to use the loader! I am pumped.

I am not questioning your honesty at all, and I agree, upfront information is the key because increased price for financing is not the norm when compared to autos, unless my friend has Alzheimers.

 

[Ram4x4]

I have received two quotes on a Mahindra tractor and the "0%" interest price is $4,000 higher than the financed price.

Yeah, I get it about how it all works, but the thing that jerks my chain, like some here is that the 0% interest price is NOT 0% interest. You are basically expected to pay the interest up front, in cash, so yeah, pay all the interest up front, and none in the payments is still paying interest.

I don't know why these companies try this kind of crap, they must think we're all stupid. Personally, it makes them seem like shysters to me.

Oh, I'm going to buy the Mahindra because I can't get the same capabilities for the price in another brand, but I'm not happy about their smoke&mirrors financing options.

I agree with the other poster. When I walk into a dealership I want to negotiate the price, not a monthly payment. I especially hate it at car dealers when I have a trade in. They don't want to appraise the vehicle until I tell them what I am interested in buying. Bull. Appraise the trade in, tell me what you'll give me for it so I know what I have in pocket prior to picking something new. Then we can set about negotiating price on the new vehicle. They always want to play these number games and it pisses me off.

I usually research what I want first, walk into the dealer, show them the trade in, tell them I want X $$$ for the trade and I want new vehicle Y for X $$$, take it or leave it. I usually have to shop around but I usually get what I want for what I want. I don't try to steal these vehicles, I know they have to make a living and I understand that, but this high pressure numbers game is for the birds.

 

[CurlyDave]

i just get real pissed off when a sales guy asks we how much im willing to pay per month when i asked the price on a truck, tractor,,etc. instead of telling me the price of the vehicle. they must think were all idiots.

if a sales dude tries that approach with me, i turn and walk out. i dont like to be played as a fool

I do exactly the same. I didn't ask what the payments were, I asked what the price was, and it is rude to ignore my question. If the dealership has a sales pitch they want the salesman to use, and I can tell it is designed to extract the maximum amount of money from me, I don't want to do business with them.

What I tried last time, and it worked pretty well, is that I write all my checks on the computer. I talked about price with the sales guy on Monday, and then went home. Tuesday morning I wrote up a list of conditions on the deal (fix this, fix that, get various pieces of information) and computer printed the list, and a check for $1500 less than his lowest price. I took it in late Tuesday morning. Told him I wanted to make an offer on the truck, and gave him the list and the signed check. Somehow a computer-printed check looks a lot more "official" than a hand written one, and he was mesmerized by that check.

He took it back to the "back room", came back and tried to negotiate me up, but I had seen the way his eyes opened up when he saw the check, and I wasn't willing to move. Ended up paying the DMV transfer fees on top of the check and drove the truck home. And, he signed a copy of my fix-it list.

That was a good thing, because one of the issues was that they didn't have the combination for the keyless entry. It turns out they couldn't pull it up from their computer, and had to install a new one. They were grumbling about that when I picked it up after the repairs. They thought I should have paid for a new one, but they had signed that they would give me the combination, so they had to pony up.

 

[DavesTractor]

I have received two quotes on a Mahindra tractor and the "0%" interest price is $4,000 higher than the financed price.

Yeah, I get it about how it all works, but the thing that jerks my chain, like some here is that the 0% interest price is NOT 0% interest. You are basically expected to pay the interest up front, in cash, so yeah, pay all the interest up front, and none in the payments is still paying interest.

I don't know why these companies try this kind of crap, they must think we're all stupid. Personally, it makes them seem like shysters to me.

Oh, I'm going to buy the Mahindra because I can't get the same capabilities for the price in another brand, but I'm not happy about their smoke&mirrors financing options.

I agree with the other poster. When I walk into a dealership I want to negotiate the price, not a monthly payment. I especially hate it at car dealers when I have a trade in. They don't want to appraise the vehicle until I tell them what I am interested in buying. Bull. Appraise the trade in, tell me what you'll give me for it so I know what I have in pocket prior to picking something new. Then we can set about negotiating price on the new vehicle. They always want to play these number games and it pisses me off.

I usually research what I want first, walk into the dealer, show them the trade in, tell them I want X $$$ for the trade and I want new vehicle Y for X $$$, take it or leave it. I usually have to shop around but I usually get what I want for what I want. I don't try to steal these vehicles, I know they have to make a living and I understand that, but this high pressure numbers game is for the birds.

Ram4x4, I am interested in your response, as I have debated with dealers the best way to handle the buydown aspect of the 0%. For you, maybe it would have been more palatable if the dealer had all his prices at 0%, then just mentioned that there was deep discounts for cash? I mean, if you are planning to go with 0%, that sure sounds better than getting the cash price and having to buy up. Same deal, different angle.

Surely we know that 0% is not free, someone pays for the free interest. (I know there are occasional examples where 0% is offered without a cash discount option, but that is very rare). What is the best manner for a dealer to approach this? This is a serious question. There are 3 basic prices on each model. Cash or standard rate (largest discounts/rebates), reduced rate such as 4.25% (no discounts given, no buydowns needed) and 0% (buydowns needed). So when a customer says, "how much for a 5035", a dealer must either interogate the customer to find out how he wants to buy, or throw out a price and then upsell/rebate from there. It's not easy.

I used to question the buyer before giving a price, but I hate that personally. So we decided the true price is what a buyer will hand to a seller in the equivalent of $100 bills. That is the price. If you want 0%, you pay more, exactly the amount it will cost me.

Generally buying the 0%, if you do not pay it off early, is a little better deal than buying at standard or reduced rate. But since you have paid the "interest" up front, it only pencils out against the other rates had you ran all loans to full term. If you are going to pay it off early, take the discounts up front and use standard rate.

Always interested in feedback. Its how we learn.

 

[LD1]

I am usually the other way around. If I am planning on financing said tractor tor car or truck, I negotiate the monthly pricing/term. Because in the end, THAT is how much the car is going to cost me.

But I dont go in bline either. I do some research, and have a target price/interest rate in mind knowing what I can get at a local bank for the rate, having a good Idea what the trade is worth, and knowing what I want to spend.

Sometimes the dealer has a little more pull and can get a lower interest rate with other banks, and a .25% better rate might just be enough.

Usually when I walk in, I just tell them upfront, "This is what I want to buy, This is my trade, and I am willing to pay $xxx/month for no more than xx months, can you do it or not" Pretty straight forward and a yes or no question.

What chaps me is when they come back and say..."we've got good news, we can do it. BUT....we have to finance for XX + 12 months(longer than I asked about).

I politely tell them "I asked you a yes or no question. Can you do it on MY terms or not, because if not, you are wasting my time and I'll be on my way".

Now when I am paying cash, OTD pricing is all that matters.

 

[smstonypoint]

Ram4x4, I am interested in your response, as I have debated with dealers the best way to handle the buydown aspect of the 0%. For you, maybe it would have been more palatable if the dealer had all his prices at 0%, then just mentioned that there was deep discounts for cash? I mean, if you are planning to go with 0%, that sure sounds better than getting the cash price and having to buy up. Same deal, different angle.

Always interested in feedback. Its how we learn.

Dave,

First, I don't have a clue as to the relationships between the various manufacturers' finance arms and their dealers, and so I am trying to learn.

Is this problem unique to Mahindra Finance and Mahindra dealers? Based on my reading over in the Kubota Forum, Kubota dealers don't face this issue -- rebates for cash purchases (or financing at standard rates) are handled directly by Kubota.

Steve

 

[kootch88]

Ram4x4, I am interested in your response, as I have debated with dealers the best way to handle the buydown aspect of the 0%. For you, maybe it would have been more palatable if the dealer had all his prices at 0%, then just mentioned that there was deep discounts for cash? I mean, if you are planning to go with 0%, that sure sounds better than getting the cash price and having to buy up. Same deal, different angle.


Always interested in feedback. Its how we learn.

For me I would have been pleased as can be if I were told here is our 0% price and here is the cash or self financing price. It would have taken all the angst out of my purchase. I just finished the refi of the Mahinra loan that was closed 3/19, so I am back at my 2.99 and everything is great.

 

[charliepff]

We just used the low interest financing for our machine. The dealer told us right up front that the 0% isnot really 0%. I confronted my Kubota dealer about it who was trying to steer me toward that. When asked he beat around the bush with the awnser but there 0% worked the same way.

 

[rockshaft]

I'm confused as to what the 0% adds to a machines cost.

I was quoted pretty darn close to the same price for three machines:
JD 1026R, Mahindra Max25, Kubota BX25
All configured with loader and backhoe.

I ended up going with the JD, partially because of dealer proximity, but after reading some of these posts I'm inclined to believe the Max25 was actually going to be 4000$ more if I'd chosen it. I never mentioned financing to anyone except a couple of the Deere dealers when I was ready to sign papers. If this is true, it would have made for a lot less hand wringing when I was trying to decide.

 

[headtide]

It would appear that folks (buyers and sellers) are making this more difficult than it needs to be. The only 'true' purchase price of a product is the 'cash' price, and which is where all negotiations should begin, IMO. If you start anywhere else in the negotiation you may get tangled up in the seller's/manufacturer's web of deception (not all, but some), at which point the true cost of the item is often clouded by discussions of monthly payments, special interest offers, etc., all in an attempt to make the cost appear more affordable to the buyer, but which frequently results in a higher purchase price. I say, start with the real price (cash) and if you need financing then discuss those terms separately, and calculate the additional cost of such, to determine if it is at a lower cost through the seller instead of obtaining financing elsewhere. Just my two cents.