CD Article: 2009 Pontiac Vibe AWD

[airbalancer]

Purchase price: $30,000
Down payment: $2000
Cash discount: $0
Term: 60 month
Interest: 0%
Total financed: $31900
Total interest: $0
HST (13%): $3900

Monthly payment: $532

About right except who would put $2000 down when the interest rate is 0%?

  good one

[sirAQUAMAN64]

Purchase price: $30,000
Down payment: $2000
Cash discount: $0
Term: 60 month
Interest: 0%
Total financed: $31900
Total interest: $0
HST (13%): $3900

Monthly payment: $532

About right except who would put $2000 down when the interest rate is 0%?

  good one

I would to lower my monthly payments if I was otherwise debt free. May sound dumb, but on a budget I'd like my car expense going forward to be as little as possible.

I also like the Vibe over the Matrix, for appearance, safety, price/equipment, longer warranty, and the ability to order the 2.4L on the base model. Not to mention 0% financing and cash incentive on some of them currently.

That said, fully loaded the Vibe/Matrix can get pricey and I'd rather a compact utility at that point.

[Honda Owner]

Even with your optimistic interest rates, you’re no better off. In the event that illness or job loss prevents you from making your payment, in one instance they take your car, the other, well things get ugly real quick.

You neglected to include such things as "lien registration and document fees."

Cash is king. You can negotiate any price down with cash.  But if you want to dealer finance, fill yer boots.

About right except who would put $2000 down when the interest rate is 0%?

Dealers will not finance with less than (at least) 10% down. If you have a credit score of less than 600, you are looking at more like 20% or more

[PMREdmonton]

Why get a Vibe AWD when you could get a Forrester with similar fuel economy, better AWD system, better looks and more overall functionality?  Price is in favour of Vibe but American cash price for a Forrester is better than Cdn price of a Vibe.

[Sir Osis of Liver]

Even with your optimistic interest rates, you’re no better off. In the event that illness or job loss prevents you from making your payment, in one instance they take your car, the other, well things get ugly real quick.

You neglected to include such things as "lien registration and document fees."

Cash is king. You can negotiate any price down with cash.  But if you want to dealer finance, fill yer boots.

About right except who would put $2000 down when the interest rate is 0%?

Dealers will not finance with less than (at least) 10% down. If you have a credit score of less than 600, you are looking at more like 20% or more

Dealers couldn't care less if you finance or show up with cash. You can get the same deal with either.

I also didn't include the lost opportunity costs of paying cash up front, nor the effect of 5 years of inflation, which is a net gain if you extend your payments over 5 years at 0%, but a net loss by paying cash up front.

[airbalancer]

Even with your optimistic interest rates, you’re no better off. In the event that illness or job loss prevents you from making your payment, in one instance they take your car, the other, well things get ugly real quick.

You neglected to include such things as "lien registration and document fees."

Cash is king. You can negotiate any price down with cash.  But if you want to dealer finance, fill yer boots.

About right except who would put $2000 down when the interest rate is 0%?

Dealers will not finance with less than (at least) 10% down. If you have a credit score of less than 600, you are looking at more like 20% or more

what are you smoking
I have bought and leased, I never put money down

[Honda Owner]

Dealers couldn't care less if you finance or show up with cash. You can get the same deal with either.

I beg to differ. It takes 60-90 days for a dealer to get paid out on financing. They love cash.

GM will not finance anyone with less than 10% down. Hell, their cars depreciate 30% the day you drive them away.

I leased my present vehicle, anyway, because I am self employed (100% write off). The lease rate is 1.9% and Honda doesn't deal on Fit DX manuals. They fly out of the dealers due to the fuel economy rebate and PST exemption. $207 a month, no money down, 60 months.

[airbalancer]

Dealers couldn't care less if you finance or show up with cash. You can get the same deal with either.

I beg to differ. It takes 60-90 days for a dealer to get paid out on financing. They love cash.

GM will not finance anyone with less than 10% down. Hell, their cars depreciate 30% the day you drive them away.

I leased my present vehicle, anyway, because I am self employed (100% write off). The lease rate is 1.9% and Honda doesn't deal on Fit DX manuals. They fly out of the dealers due to the fuel economy rebate and PST exemption. $207 a month, no money down, 60 months.

What is your second car, as you cannot write off 100% if you only have 1 car

[Honda Owner]

Big_Thumb, what manufacturers have you worked for and in what finance department?

GMAC pays out the dealer in a minimum of 60 days, to a maximum of 90. Go deal at the end of the month, when payroll is due. Most dealers are family businesses, (GM dealers, anyway) and are hard up at the end of the month.

But what would I know after 20 years working at dealers?

I do know I am glad I don't do it anymore!

[articsteve]

Just to clarify the dealer financing; Toyota dealers could care less is it's customer cash or Toyota Credit.

Toyota Credit will either finance you 100% or not at all.  They are not interested in 20% down so they have a buffer against defaults.  Toyota Credit will finance all taxes and all value added products  , but are taking a hard line on burying negative equity which all dealers try and sneak in.

I agree with the dude from Quebec; Toyota Canada has the most punitive option bundles of manufacturer.  The VSC is a prime example. 

I also agree when optioned up the Matrix and the Vibe are not great deals.

[johngenx]

Dealers can make money off financing.  They can pad the rate and make the difference for themselves in commission.  Sweet money if you can get it.  The problem for the business manager lately is the advertised subvented rates, as people expect that rate.  Of course, they can still try to tell you that you're not creditworthy for that rate, but then risk blowing the deal if people know their credit and smell a rat.

When I bought my first new car, rates were so high that interest was a massive cost of buying a new car.  I went to my bank, found out the best rate they'd give me, then compared that with what the dealer offered me from their sources.

When I financed the Mercedes thorough MB Canada, they stipulated that they would finance up to 100% of the purchase price including taxes, fees, accessories and extended warranties, but would NOT roll over excess financing from an upside down trade.  They were also an "we finance you or not" approval.  They were a dream to deal with, actually.  They faxed me an app at work, I filled it out (one page, took five minutes) and faxed it back with a copy of my pay stub, and about ten minutes later they faxed me an approval.  It was for "up to $xx,000 and I could just take that to any dealer and once I negotiated my price, hand them the approval and I would be done.

Great system, if you ask me.

[Sir Osis of Liver]

Big_Thumb, what manufacturers have you worked for and in what finance department?

GMAC pays out the dealer in a minimum of 60 days, to a maximum of 90. Go deal at the end of the month, when payroll is due. Most dealers are family businesses, (GM dealers, anyway) and are hard up at the end of the month.

But what would I know after 20 years working at dealers?

I do know I am glad I don't do it anymore!

Haven't worked at any, but I've bought enough cars over the years to have a pretty good idea of the things they say and do. Some of my friends have sold cars or have had stakes in car dealerships. A few people on this very website sell or sold cars and have explained things quite well over the years too.

The 60 to 90 day thing is part of everyone's business cycle, and it's not going to get you a better deal on your transaction. I work for a consulting engineering company, we deal with 60 to 90 day payment schedules too. It's handled by accounting and it's not an issue unless the client defaults, and then only to the extent that our legal department may get involved. Payroll continues as normal.
For dealerships, the revenue coming in is very important, and that's dependent on sales volume and markup. That's also why the financing and lease deals have been nuts this year, markups are getting squeezed so they're trying to pump up sales numbers.

Most of the dealers around here started as family businesses but are now multi-dealer corporations. Here in Freddy, the group that owns the Chevrolet Cadillac dealer also owns the local Toyota dealer; the group that owns the Pontiac Buick GMC dealer also owns the local Hyundai dealer. Honda owns the local Mazda dealership etc. This diversification helps them weather the rough stuff a bit better. Most of them also are involved or own dealerships in other cities around the province or Maritimes. This is usually the rule not the exception in most areas. The day of the small independent new car dealer are waining fast.

When I bought my Vibe in '05 I was given the option of 100% financing including all taxes and fees. They also asked if I had anything outstanding on my trade in, 'cause they'd roll that into the loan too. I declined and put a small down payment on it to take advantage of the 0.9% financing available at the time while still not being too upside down equity wise. That was through GMAC credit, so your assertion that GMAC requires 10% down is bull$hit. I've had similar offers from Chrysler finance, and Toyota finance too. I'm sure everyone else here has had similar experiences too.

For the lease on my Subaru (Subaru Volvo dealer owned by the same group that owns a number of Ford dealers) again I was offered 100% with no down payment other than the first month. The documentation and administration fees I always get waived or no sale. Again that was through GMAC.

When I bought my first car, the best I could do for financing was 11%! Do that for four years and the 1990 Colt Turbo started to add up! 135hp and a bit less than 2000lbs, fun little car that!

[johngenx]

If the dealer is not using captive financing, then they get paid right away.  Not sure what happens when they use the manufacturers financing arm.

However, the dealer hasn't paid for the car yet anyway.  They "floorplan" the cars and don't pay anything other than interest until the car is sold.

As for accounting, it makes no difference.  The sale is booked as revenue and the offset is in short assets of accounts receivable.  The dealer has tons of people it pays over 30/60/90, so who cares?

If the dealer management is telling sales people that they can't collect their commission because GMAC doesn't pay them for 60 or 90 days, they're full of .  GMAC WILL pay, and the sale is on the books.  The commission is a tiny amount of the transaction and they're nickle and diming people in an effort to tie you down by delaying your payment.  If someone did that to me, I'd quit.  Every salesperson that hears that BS should walk.