I'm in the process of buying a car and the dealer is offering me financiation (loan).
They all tell me its a better idea than paying straight cash (that I should be investing my actual money somewhere).
I've also offered to put down like 50% of the value and then finance the rest but the guy at the dealership told me this is a bad idea and I'll end up paying more interest than if I just financed it all.
Are they trying to fuck me over?
>TL;DR: is it better to finance or to pay cash for a car under 10k?
Pure cash is best. They either want to charge you stupid money or they think that you'll default halfway through and they can repo the car.
If its the later then the car wont be worth 10k
also they fuck with the cost to make it seem like a deal
like saying they can only get you the "factory rebate" if its financed (even if its true youll pay more with a loan and interest than a cash price a few thousand higher than with rebate)
or flat out lying about the cars price
Yes, they're fucking you over.
Here's how B lots work...
1. dealership gets car in trade in, for (lets say).... $4000
2. They put the car on sale at the B lot for 8000
3. They will give you a loan, but you need to put 4000 down.
So.... before it leaves the lot, they've already got what they paid out of it. They give you a loan on bad terms. If you fail on the loan, they take the car back and sell it again.
If you can afford to pay cash, pay cash.
In 2005 I paid cash for a new Mazda 6. Finance guy says, "That's crazy. You should finance and put that money into stock market." I say no. Pay cash for car. Dow Jones Industrial average was about 11,500.
In 2009 DJI dropped to 6500. That is what finance guy should have said. Wait until market drops 5,000 points before financing a car and putting money into stock market.
And even then, Let's say you pay $5000 cash and finance $5000. There going to give some rape rate at 8-9%. So you have to make 8-9%+brokerage fees,etc.. with your invested money to break even, which, if like 90% of people, you won't. You just end up getting tag-teamed by your car dealer and your broker.
>>1066544 Play along with your dealer, so he shows is card about how low he will go fro final price with financing option. Then tell him you'll take the car at that price ,cash. Any pussyfooting from him, just walk out. You'll eventually get a dealer who'll take the sale.
Read this before you go back to dealership.
And don't be afraid to walk out. Once somebody leave a car dealership the odds of them seeing that person again are almost zero so they try really hard to keep you from leaving. And once you settle don't buy any extra rustproofing/back up alarm/security etching or any other bullshit they try and sell you.