fre3way

I was told by an audi dealership that if I chose to finance a car, it would allow for more negotiations rather than paying for it out of pocket. I'm looking at a used a3 around 18-20k. Would it be okay to finance the car and pay it off 2 months later? That way I would get a good deal right now and I wouldn't be paying the high interest rate.

s3burgh

sounds backwards

pcwizpcwiz

Absolutely true. Dealers can and do make spiffs and other money when you finance.
I have been told several times $x price but only if you finance with us.
A friend bought a new Lexus wanted to pay cash but there was some big special if he financed with Lexus I think it was $2,000 or more so her did and then paid the loan in full when he got his first statement. For more info on this you can look on the MyFico forums.

jaegerlc

They gave me $1000 off if I financed, so I did and paid it off in the first payment (the dealer asked me to wait 6 mos. but I was not required to). Car companies now make a good bit of their profits from financial services.

Jnjrowland

Same thing here when I got my A3. They had $1,500 off if you financed. I took the deal and paid it off after one payment. The 'gentleman' in the F&I office told me I had to wait at least a year to pay it off. I cannot believe the BS these people throw around and I obviously knew better having had plenty of loans in my lifetime. It was interesting that when I did the math the year of interest was almost exactly $1,500.

mpidcarter

The finance department is a profit center, they make money on after-purchase add-ons, including the financing. They'll have a buy rate from their bank, and they'll contract with you at a higher rate, creating profit opportunity. They may have a wholesale rate of 3% and charge you 4.5%, they get paid the difference. The F&I guy is measured and paid on his profit per car sold, they need to maintain an average typically around $1,000 per unit delivered, so they definitely want you to finance. The reason they ask you to wait 6 months to pay it off is that is the length of time that particular lender has for a chargeback period. It may help a guy if you finance now and pay it off next month as it may help him keep his average up and he'll worry about the chargeback next month.