| I have been a Finance Manager at franchise car | | | | will say anything at the time to get you to drive the car |
| dealerships for most of my working career and let me | | | | without letting you know how much it is. A favorite line |
| tell you, there's a lot that goes on behind the scenes | | | | my salesmen have used is "The bank will set the |
| that still hasn't been told. Even with all the knowledge | | | | price" that's true up to a certain point. The bank will set |
| of the Internet and undercover camera shows there | | | | a maximum they will finance on the car, and we want |
| are still things that most of the public are not aware of. | | | | to make sure we get every penny of it. Don't think |
| As corrupt as some car dealerships can be, even the | | | | they are watching out for you, they need our business, |
| most reputable ones will take advantage of a | | | | the more the bank will loan on a vehicle the more |
| customer with less than perfect credit. As a matter of | | | | business we will give them. So most banks are pretty |
| fact, sub-prime buyers are some of our most | | | | generous and will loan quite a bit over the book value |
| profitable customers. I think that statement will surprise | | | | of the vehicle. |
| a lot of people. I'm going to try and answer the most | | | | - Whats my trade-in worth? If we didn't tell you the |
| common questions that people ask but we never | | | | selling price, you trade is worth whatever you want it |
| answer. | | | | to be worth. Another good reason for not telling you |
| - Why do I only get to look at certain vehicles? If | | | | the selling price of the car is I can show anything for |
| you've ever been car shopping with bad credit, the | | | | your trade in, and not lose a penny. Actually even at |
| salesmen are likely to show you just 1 or 2 cars.The | | | | this point if your salesman did tell you the price, I can |
| cars they are showing you are the ones they will | | | | still make extra money on your trade in. I'll tell you how |
| make the most profit on. Any car dealership that | | | | this works both ways. If you don't know the selling |
| advertises for bad credit has some kind of computer | | | | price yet, and you tell your salesman you want at least |
| software or program that once the finance manager | | | | $1000.00 for your trade and all were really appraising it |
| plugs in the rate, terms, and down payment will list the | | | | for is $500 all I have to do is raise the selling price by |
| inventory in order of profit. The secret is they tell the | | | | $500. I can show you what you want and never give |
| salesmen to show you 1 or 2 cars that are at the top | | | | you any real discount. If you know the selling price and |
| of their list for profit. The salesman will say things like | | | | we are still putting the $500 value on your trade, I can |
| "This is what the bank has approved you for" or "This | | | | also just tell you your vehicle is worth $400 and keep |
| is in the banks guidelines" so you get excited because | | | | the other hundred for more profit. I am using low |
| you know you can get approved on this car! The truth | | | | numbers here to keep it simple but "under-allowing" as |
| is, there are many other cars that work for your | | | | it is called, can keep several hundred dollars on trades |
| approval we just don't make as much money on them. | | | | worth thousands as is normally the case. More money |
| This computer software is very sophisticated and | | | | out of your pocket. |
| allows for maximum profit. That's why bad credit | | | | - Is that the best interest rate I could get? I'm going to |
| customers are so profitable for the dealer. You | | | | ask you a question at this point. Do you know your |
| wouldn't see us dare try to show a customer with an | | | | credit? If not then I'm going to take advantage of that. I |
| 800 beacon score the cars we want them to buy. We | | | | am still shocked at what kind of finance charges are |
| are relying on the fact that you're so excited to be | | | | involved in a bad credit, high interest loan. Oftentimes I |
| purchasing a car, that you will ignore our tactics. Select | | | | see people pay a much higher interest rate than they |
| a vehicle yourself that fits your needs and your price | | | | had to. Finance charges on an auto loan with a high |
| range. Which leads me to my next tip. | | | | interest rate can run up to $15,000 dollars.There are |
| - What's the price of the car? As a finance manager I | | | | simple things people can do themselves to raise their |
| will instruct the salesman not to answer that so my | | | | credit score that would have saved them thousands |
| software program that selected the car for you can | | | | of dollars with very little time and money. I'm never |
| set the selling price. Remember, the computer program | | | | going to tell you that in my office, because I want you |
| I told you about earlier? Well another thing it will tell us | | | | to buy a car, not go home and fix your credit. A rate |
| is how much we can sell the car for, based on how | | | | 2-3 points higher than it should be will literally cost you |
| much the bank will loan. The price we want to sell you | | | | thousands of extra money over the 5 to 6 year period |
| the car for may be several hundreds, if not thousands | | | | most cars are financed for. If you think its worth it to |
| over what we have the car really priced for. A | | | | have a car a few days faster then go ahead, if not, |
| customer with excellent credit would have been | | | | then do the research and take the time to work on |
| quoted the price off the salesman's list. The salesman | | | | your credit and raise your credit score. |