I sell cars and financed customers actually can get a better deal than a cash customer with a few stipulations.
Lets say the car can be bought for 20000 cash and for the purpose of this demonstration lets say I paid 18000 for the car as the Dealer.
This demonstration assumes that both customers have the financial ability to pay cash.
Customer 1 walks in and pays 20000. end of story.
I finance customer number 2 and am willing to sell the car to him for 19500. the reason why you ask . The consumer will take a loan at 8.99 percent and keep it for 90 days to avoid a chargeback. he will then pay the loan off. I'm pretty sure the interest for these 3 months would be less than $75 if memory serves me. I actually make more money because I got my kick from the bank 3 points or $350 whichever is greater as soon as he fufilled his contract and I get a check of somewhere between 1 and 3 percent of the total amount of loans depending on how many loans I push through in a month. So lets say I do 20 loans at 20k apiece my kick would be $12,000.
12k divided by 20 cars is $600 + 350 + 19500= $20450 for me.
So I make more and the consumer paid less . A perfect world.
If the consumer carried the loan to term he would obviously pay more than the fellow who paid straight up cash. Just guessing since I don't have my loan program at home somewhere around 3-4k more.
Very few are capable of paying off a loan at a moments notice. But some do.
The above numbers are close and should give you some idea but are not ment to be exact since I don't have exact numbers in front of me .
Lets say the car can be bought for 20000 cash and for the purpose of this demonstration lets say I paid 18000 for the car as the Dealer.
This demonstration assumes that both customers have the financial ability to pay cash.
Customer 1 walks in and pays 20000. end of story.
I finance customer number 2 and am willing to sell the car to him for 19500. the reason why you ask . The consumer will take a loan at 8.99 percent and keep it for 90 days to avoid a chargeback. he will then pay the loan off. I'm pretty sure the interest for these 3 months would be less than $75 if memory serves me. I actually make more money because I got my kick from the bank 3 points or $350 whichever is greater as soon as he fufilled his contract and I get a check of somewhere between 1 and 3 percent of the total amount of loans depending on how many loans I push through in a month. So lets say I do 20 loans at 20k apiece my kick would be $12,000.
12k divided by 20 cars is $600 + 350 + 19500= $20450 for me.
So I make more and the consumer paid less . A perfect world.
If the consumer carried the loan to term he would obviously pay more than the fellow who paid straight up cash. Just guessing since I don't have my loan program at home somewhere around 3-4k more.
Very few are capable of paying off a loan at a moments notice. But some do.
The above numbers are close and should give you some idea but are not ment to be exact since I don't have exact numbers in front of me .
This evening about 10 minutes ago -----