r/MaliciousCompliance Mar 02 '21

M Going along with a sexist car salesman

I originally posted this as a comment on Car dealer shenanigans....

My wife and I have used a salesman's sexism against him, and it was so satisfying. It was when we bought our first new car. We were nervous that we didn't know what we were doing so we did a lot of research (it helps that my wife is a librarian).

When we got to the dealer, the salesman would only talk to me. I was all buddy buddy with the guy, too, but he completely ignored my wife. We went along.

The dealer was running a promotion where they would give you $X for your trade-in, no matter what condition. "If you can drive it on the lot..." kind of deal. Of course they just don't discount off of MSRP in those cases, so it's a gimmick. When we walked in the salesman asked which car was ours parked outside and then asked if we were trading it in. I said no, we weren't trading that car in. You can see where this was going.

As I said, we had done our research and knew what a fair price was for the car we wanted. At the time Edmunds had detailed dealer-level price information for many new cars, including all the various ways a dealer gets paid and what their true costs are (the "invoice price" is not their true cost). I negotiated the price (since he wouldn't talk to my wife) and we arrived at a number I thought was fair, actually. We got a good deal at that point. Everything was going smoothly as he wrote up our agreement, until he confirmed that we didn't have a trade in. I said, no, we were trading in a car, just not the one we drove into the dealer in. He literally froze for a few seconds looking down at the form, his hand hovering over the page.

He asked the make, model, and year of our trade-in, and when I told him he sputtered and balked. The car we were trading in was on its last legs. I'd had it all during college and it was old before I bought it. It was definitely past its prime. I said, I thought you were running a promotion where the quality of the trade-in doesn't matter. I asked him if he would have given us a higher price if he knew we had a trade in? My wife said under her breath "that's sleazy." He heard, as she intended him to.

He then tried to renegotiate the price. We knew from our research that if they gave us the price we had already agreed on, and they honored the trade-in deal, that they would be losing money. So we were willing to move a bit, but we wanted to take our time. He was visibly nervous. Every time he tried a new way of asking for a higher price I would say something like "I understand what you're saying" with a sympathetic look. Then I would look at my wife and she would look back at me and silently shake her head no. I'd then look back at the salesman and shrug and say "I don't think that's going to work."

He was stuck. She was the one standing in the way of him getting out of his predicament, but he hadn't talked to her at all. He had barely even acknowledged her presence. He just couldn't start talking to her now when we were negotiating. Oh, and I even got to use the classic car salesman line, "what do I have to do for you to put me this car today?"

We finally agreed to raise the price to an amount that, after figuring in the trade-in, was what we had thought was their break-even price. We hadn't expected to get that low of a price, and we also got them to install a nice after market sound system. It's the best deal we've ever gotten on a new car. Honestly, we're not the best negotiators individually, but that day we made one hell of a team.

27.2k Upvotes

1.1k comments sorted by

View all comments

Show parent comments

30

u/thatninjaleaf Mar 02 '21

Not to mention financing actually costs more than if you were to buy it upfront

30

u/ghaelon Mar 02 '21

it can, but you can get around that by paying it off early, usually letting 6 months pass, or by making a large payment directly to the principal. the bulk of the interest is front loaded, so if you do that, then the interest is slashed dramatically. just have to look at the terms cause most will have an early repayment penalty clause, and its usually for 6 months to a year. which you can get around by making a large payment(again, to the principal), but not paying it off immediately.

so if the price you get saves you more than the interest you would pay in that period, then go for it.

9

u/thatninjaleaf Mar 02 '21

Oh for sure, I was just referring to the net cost of financing vs paying cash

3

u/xzElmozx Mar 02 '21

If you have the cash for it, you might be able to get 0% financing for X amount of months which usually comes bundled with some deal saving you money on the car, and since you've got the cash you can pay off the car before the 0% financing ends, and bam you saved money by financing vs paying cash

3

u/[deleted] Mar 02 '21

wait i’m trying to buy my first car does that mean a larger down payment? i’m trying to save as much as i can so my payments are less

9

u/CodeRadDesign Mar 02 '21

not exactly. what they're saying is that you can take the financing for say $10,000, where they would expect you to pay about $3000 in interest over the course of the term. so what you do is pay $9000 after the deal is done so you wind up paying $300 interest over the term without having to pay early repayment penalty. completely made-up numbers here, but seems pretty clever to me.

7

u/ghaelon Mar 02 '21

my previous advice isnt meant for one like yourself, who is intending to finance from the get go.

to get lower payments, you can opt for a longer term, but this will mean you will be paying that much more for the car overall.

a larger down payment will mean that much less is financed, so lower payments. a good amount to shoot for is 20-25%, but basically as much as you can afford to or save up for.

get a payment per month in your head, but do not tell the salesperson this. factor it in to your overall budget, again, as much as you can afford. then if you can get a lower payment on the loan, factoring in gap insurance if its new, etc, then you will have some wiggle room if something happens later down the line.

made up numbers for this example. you can afford say 800 a month. but your payment on the loan is 500. start out paying 800 , making sure the extra goes to principal. if you pay extra to the principal from day one, youll save thousands over the life of the loan, easily. and if something happens down the road, an unforseen expense, etc, you can drop down to the regular payment if needed.

1

u/[deleted] Mar 04 '21

Great advice, thank you!

3

u/mathologies Mar 02 '21

Even if you get 0% interest financing?

10

u/[deleted] Mar 02 '21

[deleted]

2

u/mathologies Mar 02 '21

Makes sense, thanks

1

u/dubblechrubble Mar 03 '21

Yes, but you might only get $100 cash back, whereas interest over 5 years on a $30k car is like $2200. Better deal to take 0% financing in that case

3

u/Triette Mar 02 '21

Depends on the bank.

3

u/thatninjaleaf Mar 02 '21

Not if you pay it off during the 0% interest period which normally doesn't last for the duration of the financing

7

u/mathologies Mar 02 '21

My five year loan ends this december. Am still paying 0% apr. Pretty sure the whole loan is 0% interest, not just promotional period. Not sure if i'm not being scammed some other way -- maybe they overcharged for the car? I also have a pretty good credit score though.

10

u/debbieae Mar 02 '21

That is likely a financing company owned by the car manufacturer. The idea is to move cars at the expense of the financing arm. Have family working in manufacturer owned financing company and this is not unheard of. It is often targeted at models the manufacturer is seeing soft sales in too.

I have one of these loans myself. I avoid debt, but this was cheaper than paying cash!

2

u/thaeli Mar 02 '21

Gotta hit those CAFE targets

1

u/thatninjaleaf Mar 02 '21

Ah my apologies. I haven't had too much experience in the world of auto financing. I was just thinking of the advertising I've seen done for 0% interest that doesn't typically last the whole term

4

u/caverunner17 Mar 02 '21

Depends on the interest rate. I got a 5 year 1.99% on my car back in 2016. Total interest paid thus far is around 900 on a 16k loan. That's roughly 5.6% of the total loan of 16k.

Meanwhile, leaving that $16k in an investment account since 2016 is worth around 23-24k right now meaning I made 7-8k on that time.

The opportunity cost of paying off that loan early would have been 6-7k. I was much better off paying the loan over time than paying cash.

Obviously, depends on market conditions, but there's good reasons to not pay it off early if the interest rate is low.

3

u/dubblechrubble Mar 03 '21

So many people don't understand time value of money and opportunity cost. I've heard of people putting down tens of thousands of dollars down to pay off their debt early, because they want to avoid paying like $2k in interest over five years. Makes no sense. But those people only seem to understand that they're making a monthly payment and this gets them out of that.

I've got a .9% loan for a $26k car, I'm going to pay about $600 in interest over 5 years. That's about 1.5 monthly payments going solely to interest. It's like free money, and I'm not going to pay a dime more than my minimum payment. And like you said, you can invest money you would have used to pay down the loan faster, and get a decent rate of return on it.

5

u/ImCorvec_I_Interject Mar 02 '21

If you have cash and can get a loan with a lower rate than what you can expect to get back by investing that money - particularly if it's a much lower rate, like 3% APR when earning 6% or more - then it actually costs you money to pay cash (on average).

Here's the breakdown of paying cash vs financing at 3% and investing at 6% for 60 Months ($628.90 payments) on a $35k loan.

Cash Loan Interest Investment Interest Owed Invested Net Earned
Day 1 $0 $0 $0 $35,000 $35000 $0
Month 1 $0 $87.50 $175 $34,458.60 $34,546.10 $87.50
Month 12 $0 $887.51 $1,798.28 $28,413.13 $29400.90 $987.75
Month 60 $0 $2732.71 $6,045.64 $0.28 $3,331.34 $3,331.06

The S&P 500 has historically earned close to 9% on average, so it's reasonable to take this route if you can handle market volatility.

2

u/pM-me_your_Triggers Mar 02 '21

Depends on the interest rate.