Financing Issue(s) getting financed?

[silvertramp]

the retailers are paying approx. 2.5% to accept the card . therefore we increase our prices 3 to 4% to offset the cost. SO in reality if your doing a cash back or miles card you are paying for that reward in increase goods prices . I offer a 3% discount if you pay with cash so which is the better deal ?????

I used to pay cash for my gasoline. Fill up, walk in and pay. When they went to pre-pay, I had to walk back and forth twice. And have the joy off waiting in line twice. If they want to lose 2.5% on gasoline sales, that's fine by me. It's not my system, it's theirs.

 

[mile9c1]

My score has never been higher, and I can walk into any store or dealership and basically sign a paper and walk out/drive out with pretty much anything I want. Never could do that in my younger "cash only" days.

I think you're missing the point of being "cash only". When you're "cash only" you don't need to finance the car because you have cash to pay for it. I paid cash for a new truck in February and I'm pretty sure it was easier to walk out after offering to pay with cash, than to apply for a loan.

 

[M5farms]

I used to pay cash for my gasoline. Fill up, walk in and pay. When they went to pre-pay, I had to walk back and forth twice. And have the joy off waiting in line twice. If they want to lose 2.5% on gasoline sales, that's fine by me. It's not my system, it's theirs.

They are not losing 2.5% they have already marked up the product by 2.5% and if you pay cash they make an extra 2.5% profit . Nothing in this world is free except the air you breathe.

 

[silvertramp]

I think you're missing the point of being "cash only". When you're "cash only" you don't need to finance the car because you have cash to pay for it. I paid cash for a new truck in February and I'm pretty sure it was easier to walk out after offering to pay with cash, than to apply for a loan.

I recently bought a truck for cash using my trade and CD bank check. Time was short so I put the remaining $5K on a card rather than fiddle around for the remainder. When the bill came in I paid it in full. Done.

 

[MessickFarmEqu]

No one really answered the question. Yes, KCC will make some silly decisions at times. Generally if we call and have a conversation with them they will iron things out. They have a very small staff given the amount of loans they do. For that reason there are automated processes and credit decisions that are made by policy & computers that often don't make sense. At that point we just pickup the phone and talk to a person who usually irons things out.

 

[DavesTractor]

Lots of good stuff here in this thread. A few thoughts if I may ramble:

I'm a tractor dealer, and M5farms has it right. When as a consumer we get our 1% "back", keep in mind that the price was raised to cover that. If credit cards did not exist, prices for items would be lower. But the convenience of a card is hard to argue. I bought a couple of forklifts a while back from a major rental company and I asked them if I could put them on my credit card. To my surprise, it was no issue. 1% back on tens of thousands of dollars in one transaction was pretty cool. Had they been an independent smaller rental customer I am sure they would have balked at that.

As for the original poster, thanks for your civility when folks are beating you up a little bit. I understand your position, and what you say makes sense to me. However, finance companies are more likely to ride out a loan for someone whose credit has become sketchy rather than to enter into any new agreement, even if the new agreement is better than the prior. Because when they first started financing with you, your credit was great. Now it is not, and now you are treated as a marginal or conditional risk.

Like most dealers, we sell millions of dollars worth of tractors a year, roughly 65% financed. Occasionally we will get rejected on a sale for which I think the rejection is unmerited. On 3 occasions that I can recall, I contacted the finance company and pushed them to approve a loan that they rejected. A volume dealer can sometimes make this happen. Ironically on all three of those cases for which I got my way and they reluctantly approved, the customer defaulted on the loan. Really? To me they looked good and the reasoning for not initially approving them looked spurious. But these loan underwriters seem to know what on paper now later becomes a default. They may know that guys with green socks eating potato chips on Tuesdays always default....it doesn't matter if it makes sense. They crunch enough data to become pretty good at what they do. By the way, on each of these, I bought the tractors back so as to not cause the loan company any loss. I felt I should, and each had enough down payment that it really wasn't a loss for me. So in a sense, it wasn't much of a risk (big down payment) but finance companies prefer to not repossess.

 

[M5farms]

Lots of good stuff here in this thread. A few thoughts if I may ramble:

I'm a tractor dealer, and M5farms has it right. When as a consumer we get our 1% "back", keep in mind that the price was raised to cover that. If credit cards did not exist, prices for items would be lower. But the convenience of a card is hard to argue. I bought a couple of forklifts a while back from a major rental company and I asked them if I could put them on my credit card. To my surprise, it was no issue. 1% back on tens of thousands of dollars in one transaction was pretty cool. Had they been an independent smaller rental customer I am sure they would have balked at that.



As for the original poster, thanks for your civility when folks are beating you up a little bit. I understand your position, and what you say makes sense to me. However, finance companies are more likely to ride out a loan for someone whose credit has become sketchy rather than to enter into any new agreement, even if the new agreement is better than the prior. Because when they first started financing with you, your credit was great. Now it is not, and now you are treated as a marginal or conditional risk.

Like most dealers, we sell millions of dollars worth of tractors a year, roughly 65% financed. Occasionally we will get rejected on a sale for which I think the rejection is unmerited. On 3 occasions that I can recall, I contacted the finance company and pushed them to approve a loan that they rejected. A volume dealer can sometimes make this happen. Ironically on all three of those cases for which I got my way and they reluctantly approved, the customer defaulted on the loan. Really? To me they looked good and the reasoning for not initially approving them looked spurious. But these loan underwriters seem to know what on paper now later becomes a default. They may know that guys with green socks eating potato chips on Tuesdays always default....it doesn't matter if it makes sense. They crunch enough data to become pretty good at what they do. By the way, on each of these, I bought the tractors back so as to not cause the loan company any loss. I felt I should, and each had enough down payment that it really wasn't a loss for me. So in a sense, it wasn't much of a risk (big down payment) but finance companies prefer to not repossess.

you worded it better than I ever could . I Sell roofing and we offer terms to a segment that does not have a very good reputation and I have seen my fair share of marginal credit. Im not sure about the equipment industry but in ours our credit dept has the ability to see or talk to other companies the applicant does business with as well as personal and business credit. I also know that just last year we paid the CC companies several million dollars in fees. when evaluating my P&L each month it will make you nauseous at the amount of profit you lose and to top that off every customer wants to dicker the margin down on the front plus you have competition that has never heard the word profit.

 

[ovrszd]

Well, you are wrong in thinking this is a scam. I made 1500 bucks last fall financing a new f150. Could've paid cash, but Ford offered an extra 1500 off for using FMC. Paid loan off at 90 days... And, being a business the fico score determines my insurance rates, business licensing acceptance, and many other things.

It's a total scam designed to put consumers in debt. And it works on 99% of consumers.

Obviously some posters here have the discipline to take advantage of the "bait" being dangled. For each of you there are 10 readers of this thread that swallowed the hook.

Do any of you that work this system to your advantage think you represent main stream American consumers?

 

[ovrszd]

Yep. CC companies have to make money some how.

But most places dont offer a cash discount. So even if you are paying with cash, you are still paying more.

If the cash discount exceeds the incentive amount I get from the CC company, I pay cash. IF not, I pay CC.

Bought my dump trailer with CC. $6000 purchase. Cash discount was $50. Credit card perk was 2% ($120) So I paid with the card, let the retailer pay their 3% fee ($180), of which the CC company keeps the $60 and gives me $120 back. So In reality:
I paid $5880
CC company profited $60
Retailer got $5820

Now wouldnt it have just been easier for me and the retailer to split that $60 profit the CC company made? And sell me the trailer for $5850? But no, they took a hard stance on $50 off is the best we can do for cash. If All retailers offered a ~2% cash discount, I wouldnt have a use for my card.

Good stuff there.

Describes the scam very well.

And you took advantage of it very well.

Stupid on the dealer's part. You coul make him a lot of money if he'd listen to your explanation.

 

[Slowpoke Slim]

I think you're missing the point of being "cash only". When you're "cash only" you don't need to finance the car because you have cash to pay for it. I paid cash for a new truck in February and I'm pretty sure it was easier to walk out after offering to pay with cash, than to apply for a loan.

No.

You are entirely missing the point. It costs you more money out of your own pocket to be able to "boast" to being "cash only". You pay higher insurance premiums just to be able to impress your friends that you "always pay cash". Your credit score is a very huge factor in how your insurance premiums get calculated. Not my idea, not my rules, the insurance industry created that measuring tool all on their own.

My credit score is high, which helps substantially in driving my insurance costs down.

That is the entire point.