Why was Car Salesman pushing me to finance my vehicle when I said I had cash?

[Okie1907]

He kept listing benefits of financing and something about a nest egg to borrow from. I didnt get it and have no interest in financing so I ended up just leaving. I told him no once I didnt want to have to do it again so politely excused my self. Why would a dealer or salesman want financing? Just for the interest? They talked about banks loaning the money so I dont know why they would benefit unless the bank gives them a fee.

Ive only bought 2 cars in my life and both were under 5k, ive never been to a big brand lot before this so excuse my ignorance.

 

[SoonerP226]

Because the financing and warranty are where they make the most money. Some of those "tote the note" lots make so much on financing that they don't want to do cash sales; I've been told that there are a few that won't take a cash sale, but I've not dealt with one that bad.

 

[Tulsa Shooter]

Because they make most of their money on the "back end" financing part of the deal.

 

[Buddhaman]

They get a kickback from whoever finances you (if you use their lender). They don't make much on the car but get the kickback to make up for it. If you finance in house then they hope they keep getting interest on the loan. The 0% offers are to try and get people who don't qualify in but hey the interest is still low!

 

[dennishoddy]

I read somewhere they get a fee from some lenders for pushing financing.

We bought our Kia a couple of years ago, and met the requirements for zero percent financing although we were going to pay cash. Like you, they pushed the financing.

 

[Hobbes]

What they said.

Here's a tip:
Sometimes they will give you a better price if you lead them to believe you are going to finance, cause they profit from the finance charges, and then when you get right at the end go ahead and switch to cash.
OR finance and payoff after the first payment.

 

[dennishoddy]

What they said.

Here's a tip:
Sometimes they will give you a better price if you lead them to believe you are going to finance, cause they profit from the finance charges, and then when you get right at the end go ahead and switch to cash.
OR finance and payoff after the first payment.

Probably some truth to that. Paying off the loan early might get the credit score up as well.

 

[348]

Some of those "tote the note" lots make so much on financing that they don't want to do cash sales;

The "down payment" on the car is what they have invested in the car. All the payments are pure profit.

 

[Okie1907]

The "down payment" on the car is what they have invested in the car. All the payments are pure profit.

What do you mean that's all they are in for? How can that be? Some places are offering 1000 down on new cars. Well that's what they advertise

 

[Buddhaman]

What do you mean that's all they are in for? How can that be? Some places are offering 1000 down on new cars. Well that's what they advertise

Auto auctions. They get the car as cheap as possible so they're either under $1000 or close to the mark. That way they make a bit off of the people who can't afford the car and then they repo it and resell it all over again.