I refuse to comment on the F&I department.

Us salespeople are generally as disgusted as the customers are with that step of the purchasing process.

I'd much rather be given the opportunity to present options for a customer, and have it be a simple yes/no instead of a 1.5 hour interrogation process before signing the final paperwork.

 

Zillion it must be so profitable that the industry sticks with the process and won't change until they stop buying into it.

 

Some people say, "I just tell the F&I guy I'm gonna decline everything and that gets it over with quickly." True. Maybe. But you need to be confident that the smiling F&I guy (or gal) isn't simply tweaking your interest rate or moving something else around on you. If you walk into the F&I office knowing your payment, with tax, is, say $350/month for 60 months and your down payment is your trade plus $1,000 cash from you plus whatever incentives are coming from Mini, then you really don't care what the F&I guy does to the dealership's internal numbers.

But if you walk into F&I and haven't nailed down a firm monthly payment or the length of the lease or loan, or any other detail, then you can't know if you've had your interest rate bumped or a fee added on top of your agreed deal amount.

So simply declining all add ons only protects you to the extent you walk into F&I with rock solid locked in numbers.

 

Zillon, I so wish you were here in California. It would be a pleasure to purchase a car from you.

While I did receive outstanding service on an outstanding deal for a Mini I love, I did have to walk out of one dealer and find another who would treat us right.

 

Most of the entries on this thread start with the underlying assumption that you, as the purchaser of a new Mini, have your finances in order and you are in a position to complete the transaction.

But what if you’re financial situation is a bit more challenging?

The good news is dealers, and the dreaded F&I department, can help … for a price.

Most dealers have strong relationships with a portfolio of lenders. They work with traditional banks and other third party lenders, each of which has different standards for granting loans. Traditional banks tend to have stricter requirements including higher credit scores, tougher income to debt ratios, and other tests for borrower stability such as years of steady employment and years at the same residence.

The dealer also uses other third party lenders, sometimes known as private capital or hard money lenders. These folks will take on higher-risk loans but they want blood, usually requiring higher down payments and always charging higher interest rates and fees.

On Monday mornings, the F&I department earns its keep by shopping their stable of lenders, looking to place high-risk loans. The saddest part of the F&I job is when they have to call a customer (who happily drove a car off the lot on Saturday and promptly showed his new ride to friends and family) to say, “I need another thousand dollars down or you’ll have to bring the car back, as per the terms of your contract that say ‘subject to lender approval.”

So, say the first digit on your FICO score is below seven. The F&I manager takes a long, careful look at your credit report and your credit application. Instead of seeing what is called a record of “heartbeat” payments -- meaning your payment history is steady like a heartbeat -- the F&I manager sees a couple of payments that are thirty days late, more than three credit card balances, each at four digits, whatever. This makes you credit challenged.

So, Rule #1, if you’re credit challenged. Make sure when you visit the dealership to purchase a car, new or used, you are CURRENT ON ALL OF YOUR FICO ACCOUNTS. If this means you have to wait an extra month or two while you get everything current, it will save you money on a car loan if everything is current, even if you only make the minimum required monthly payments.

But let’s say the fates are not kind and you are a bit late on a couple of credit card payments and, before you can sell that wheezing old horse, it dies, and you need new wheels now. When it rains it pours. Two thoughts. First, perhaps the Mini world isn’t the right world for you. Second, the Koreans may have something more in your price range or the high-volume Ford dealer might be able to help you out with a low mileage lease return.

The moral to this story is, if you want a Mini from a dealer, new or used, and your credit is shaky, they can help you, for a price. In fact, they live for customers like you because all of the leverage is in their favor. They know, psychologically, it will be difficult for you to drive a hard bargain and use all of the techniques discussed previously in this thread.

The friendly F&I manager will smile at you and say, “I’m pretty confident we can get you financed.” As the F&I manager looks you in the eye, the relief you display is the signal that says, “I’m ready to roll over and pay what I have to. Bump my interest rate up, don’t discount the car too deeply, sell me a used Mini and load me up with an extended warranty because you will convince me I can’t afford an expensive repair and you are right. And when I object to the extended warranty and say I can fix my own car you will tell me that I need the car to get to work and can’t have it down for two weeks while I fix it myself but with the fancy warranty they can pack in rental car reimbursement.” You will drive off the lot with a car, but they’ve got ya.

Car dealers will tell you they are constantly amazed by the high number of customers with marginal credit who come into dealerships looking at expensive cars. Dealers are there to move metal, so they are going to try their best to “put you together” and get you into a deal that is profitable for them, drains your bank account for the large down payment they need to make the deal go, and you will pay way more in interest over the life of the loan than Mr. and Mrs. 850 FICO who snag the low discounted special lease rate, all the rebates and incentives, put no money down, and get a new car every two or three years and never change out a battery or replace worn tires.

So, how can you get a reasonable, fair deal when you’re not in the FICO stratosphere? Not that hard, if you tell yourself going in that you are giving the dealer an opportunity to sell you a car. Find the car you want and can truly afford, work the deal just as if you have excellent credit, and don’t even think about signing a credit application until you’ve hammered out your best deal on the price of the car with whatever add ons you need. When the F&I manager sits you down and tells you, “I’m pretty confident we can get you financed,” then, and only then, focus in on the terms of the loan. DO NOT GIVE BACK anything you have negotiated regarding the terms of sale or the sale price of the car, with add ons.

The key to this is do not walk into a dealership and take the sales person’s time unless you are prepared to pay a bit more for your loan and down payment, and know, at some point, your challenging credit situation will become part of the negotiation. Get the sequence right, and you will get a better, albeit somewhat more costly, deal.

 

When you're "challenged" credit-wise isn't it still smart to get your financing in order before you visit the dealer? If so, how would you do that? How do you find and evaluate "private capital and hard money" lenders?

 

It is especially more important to finance outside of the dealership when credit challenged. And probably a good idea to avoid MINI dealerships under that circumstance as well. Better off buying a MINI from another dealership that has one on the lot for several months.

 

Hard money lending is a world unto itself. Generally such loans are brokered through dealer arrangements. Hard money lenders that deal directly with retail customers are very pricey, in the same cost league as buy here/pay here corner car lots that carry their own contracts.

Automobile financing has become complex. Most brands, including Mini USA/BMWNA, have in-house captive lending operations. Mini/BMW has its own bank. Ford has Ford Motor Credit. Many other high-line brands have exclusive captive lenders, often using big banks such as Chase.

Many dealers feed into a pipeline of loans that are aggregated, bundled, and sold in financial markets as loan-backed securities. The packagers who aggregate these bundles often look for a risk mix – they want prime and sub-prime borrowers, and the mix determines pricing of the securities. BIG business. An individual borrower can only access this sort of credit through a dealer or retail lender.

If a purchaser thinks credit may be a mild to moderate issue, and that purchaser has an established relationship with a bank or credit union, then visiting with the bank or credit union first, before engaging with the dealer, can yield information regarding how challenging getting financed will be and what a reasonable cost should be.

As mentioned in a previous post, the dealer is always glad for an opportunity to try and sell a car. They want to make the deal happen. You just don’t want credit challenges to become an excuse the dealer uses to jack up the lending cost beyond what is reasonable based on the actual lending risk a credit challenged purchaser represents.

I once helped someone buy a new Honda. Her credit was a little shaky, but not horrible. At the time Honda had a 3.9% special rate. They F&I guy offered her 12.9%. She was so relieved to be offered a loan that she wanted to jump at the offer. We negotiated down to 7.9%, which made the dealer plenty of extra on the financing, properly accounted for the added risk the purchaser represented, and was a fair deal all the way around. And the dealer moved a unit.

 

When figuring out the door cost:
1) Is the delivery charge (typically $850) taxable ?
2) Tax and license fees are available on the DMV site.
My experience has been the dealer adds an extra $200
to this cost. As the seller of a new vehicle they are required to
collect tax and registration info. and submit same to DMV.
It seems this add on charge is
just another hidden charge.

 

Taxes and how they are calculated vary widely from state to state, and sometimes counties within states have different tax rates and schemes.

As a general rule, the $850 destination & handling fee is considered part of the MSRP and is taxed at the same rate and in the same manner as all other items that constitute the MSRP.

Any prep fees added on top of the $850 are dealer add-ons and should be negotiated.

DMV fees are non-negotiable and can be confirmed by visiting the state web site or by contacting the DMV. Document prep fees added by the dealer are not legally mandated fees and can also be negotiated. Some dealers take the position that they must charge doc fees on each transaction because if they waive that fee on a deal they could be sued by others who paid the fee on their deal. I don't know if this has ever been tested in court, but it sounds shaky to me. My strategy is to not get into a fight over a dealer doc fee -- let them have their fee -- just make them reduce the selling price of the car by the amount of the fee, on top of whatever other discounts have been negotiated.

The important thing is to get the "out the door" price of the transaction settled before sitting down to finalize the paperwork, so that any last-minute fees and charges can't happen. Make them disclose everything as part of the price negotiation, so that if there are DMV doc fees and prep fees lurking in the background waiting to be sprung on you when the sale documents are printed, you know in advance they're coming and you've had the opportunity to negotiate off-sets before the F&I office does its thing.

 

From what I'm reading here, there are a number of things working to my disadvantage in the pending purchase of a Clubman...

(i) It's a custom order (2017 Clubman, All4, cold weather, premium, pano roof, stick shift, tri-fold rear seat, spare tire, roof rails).
(ii) We're paying cash (Thanks VW dieselgate!)
(iii) It's the only Mini dealer in town, closest one is almost 2 hrs away.

We're basically getting $500 off MSRP and that's it. I'm sure if I wanted to play hardball I could negotiate for more (e.g., finance it at 0% and take the extra $500, then pay it off in a couple of months - NY has no early repayment penalties). But to me the extra hassle involved is not worth it. We're getting the car we want, nothing more, nothing less, out the door with no hard sell shtick.

Re: 2017All4 - I believe your comment on leases is somewhat off the mark. It is never good to come in with an idea on a fixed monthly payment. Better than no idea at all, but shopping by monthly payment alone is a fool's game. One way the dealer can play you, is simply mess with the residual value to fit your number...

Say the car costs $30k and is worth $15k after 3 years. That's $15k in lease payments, or $417/mo. x 36mo. If you refuse to budge from say $350/mo, they'll just multiply that up so your total lease payments are now $12,600, and the new residual is $17,400. How do they keep a higher residual? Slap on a 10k/yr. mileage cap so the car comes back with less miles and can be re-sold for more at lease end. Or turn it into a 4 year lease (350x48=$16.8k in payments, $13.2k residual) and give you more miles. Of course this is all before interest rate gets factored in. Either way, shopping by monthly payment is not good.

 

I'd say 2 hours away is pretty close if you can get another dealership give you a better deal than $500 off MSRP.

I say call them up and offer them your business if they can beat your local dealer by another $1,000. That way you have control of the situation. Worst case scenario is they decline and you're in the same place as before.

 

$500 off MSRP for a custom order is not a horrible deal IMO. Over the years plenty of people (including myself) have paid MSRP even for a car on the lot. I hate all those Ford truck ads saying you'll get like $10 grand off MSRP. Really? Why price cars like that?

 

Thanks for sharing your perspective, Virgilstar. I think you can do better than $500 off MSRP in today's market. However, a good deal is a deal you are comfortable with. Some of us would shop, especially on an ordered car as it really is a simple thing to send your build to multiple dealers. And don't forget to secure whatever incentives are in place during the month you take delivery.

Regarding your take on the traps of being a monthly payment buyer on a lease -- you are correct in that if the purchaser isn't clear going in regarding all the moving parts of the proposed deal, including annual mileage allowance, residual, lease length, drive off costs, and all the rest, it is possible for a dealer to hold the desired payment and change other significant aspects of the deal. As has been discussed in great detail in prior posts, there are simple ways to hold the desired payment and maintain all other aspects of the deal -- but the purchaser has to be knowledgeable and prepared and has to keep a steady eye on the numbers throughout the transaction process.

 

Don't forget, custom orders reduce dealer flooring costs. If a purchaser times it right and gets a custom order in as part of a dealer's regular allocation order, and the dealer senses its a solid order, then it's easy money for the dealer and an opportunity to add to back end payments, so, seriously, an invoice deal on a custom ordered car is possible. With incentives on top of that. It depends on the supply and demand, which right now favors buyers.

 

Hey, Virgilstar, you should consider reaching out to Zillon just to see if there's a better option for you to consider.

In an earlier post, Zillon wrote:

"Anyways, if there are any prospective MINI buyers on here in the NJ/PA/DE/NY area (or are willing to make a drive to Princeton from wherever you live) - give me a call at Princeton MINI. I'll make it one of the easiest deals you've ever done."

 

As I've covered in a previous post, it is worthwhile to shop using a buying service that might be available through your Credit Union, USAA, or even Costco. Another option is to go through Tru-Car which is what powers some of the buying services. I used USAA which pushed my price to 3 dealers. 2 of 3 wanted to find a close match on their lots or from other dealers. The other dealer was willing to order the car at the price established through the buying service. In regard to pushing for any incentives, the dealer was not willing to give me the $1000 off, but did give me 0% financing (available through Nov 30.). in the end, I purchased the car for about $4500 below MSRP.

BTW, picked up the car last night! Salesman said it was the fastest car he's seen from Mini from order to delivery!

 

gearhead60:

If you want to avoid having that transponder stuck in the bottom of your windshield you can do what I did (I have to move mine because the heated window blocks the signal): stick it to the front of your rear sunroof, in the area covered by the sunshade. It's pretty much invisible from inside and outside the car.

 

Ignoramist:

Did I miss something here? What is the transponder?

 

Looks great!! I really like Digital Blue. I also got the corning lights! I like them.

 

Gearhead60 said: "In regard to pushing for any incentives, the dealer was not willing to give me the $1000 off, but did give me 0% financing (available through Nov 30.)."

Manufacturer incentives (0% APR and cash are BOTH manufacturer incentives) are separate from negotiated discounts from the dealer. You might wish to seek clarification on how they did this in your deal. It is possible the $4,500 below MSRP (a very nice deal) included that $1,000. The fine print from MINI usually says something like, "Cash offer may be combined with other offers unless otherwise stated."

If they are saying they gave you $4,500 off but DID NOT give you the manufacturer cash, I think you might just have a case to go back and say 'where's my $1,000'?

 

On April 2nd I had custom ordered mine. I used True Car Pricing service at the time, to leverage my negotiations.

I, in turn negotiated my "signed" deal (vehicle order) at $3,410 off of the MSRP. I in turn took delivery two months later and excercised my $750.00 Customer Cash and USAA Military $500 off of my negotiated "signed" deal... Dealer frowned upon it, but it was a signed deal and tried to get me to give back some? Nonetheless, the Customer Cash and USAA Discounts come from the manufacture and not the dealer, and therefore I did not waiver from my negotiated selling price before taking my additional $1,250 in discounts.

So pretty close to you, I took $4,660 off of MSRP.. This too is/was my actual 30th Car Purchase, since my very first car...

 

Get down with your bad self, TC Mini. You are correct. The dealer discounts are separate from what the manufacturer throws in, except to the extent that there is "dealer participation," which is always different from rebates and special financing/lease rates offered by the manufacturer.

 

It may seem condescending to assume that anyone reading this thread wouldn’t understand the dynamics of the walkaround and the test drive. NAM readers understand that the salesperson is expected to develop a relationship with the customer focused on working toward a close – toward selling a car, or getting a commitment of some sort.

Let’s look at how these two steps in the car selling process, the walkaround and the test drive, are seen through the eyes of the traditional car dealership.

The Walkaround.

In the traditional car sales kabuki, after the ‘meet and greet,’ the next task the floor salesperson is expected to perform is to get the customer focused on a particular car. Once the customer says something like, “I really like that red one over there,” the salesperson is expected to guide the customer to the car and begin doing the walkaround.

During this walkaround, which is a sales presentation laced with what are known as “trial close” or “qualifying” questions, the salesperson shows the customer the many wonderful features of the car and invites the customer to sit in the vehicle. As the bells and whistles are pointed out, the interaction on the part of the salesperson is a disciplined interview. “What are you driving now?” “Tell me some things that will be really important to you in your next car?” “Most people who are interested in MINIs are looking for something special in the car they drive. What makes a car special for you?” If the customer is responsive, the savvy salesperson digs a bit deeper. “Are you planning to trade in your current vehicle?” “Do you have a payment on your car?” “If we can find the right MINI for you, are you interested in learning more about the MINI ownership experience?” “I probably shouldn’t be telling you this, but my manager told us this morning that he’s ready to make some unusually sweet deals for customers who are ready to acquire a new MINI. Are you interested in seeing what the manager can do for you on this car?”

The skilled salesperson can get some, or all, of these comments and questions in while describing Comfort Access, Harmon Kardon, Twin Turbos, and Driving Modes. And, of course, if the customer is seated in the car, there is the magic of “smelling the ether,” because, as Payton Manning sings in the commercial, “nothing beats that new car smell.”

In some dealerships, the management is watching the walkaround. It better not be too fast and it better not take too long. Some sales managers actually have a time frame for the ‘perfect walkaround,’ claiming that the skilled salesperson should be able to literally walk the customer around the car, opening the boot and bonnet and pointing to wheels and gas caps and whatever else is supposed to be shown, culminating with the customer being seated in the driver’s seat while the salesperson closes the driver’s door and seals the customer into the car to smell the ether – all within a pre-determined time frame.

Now, in fairness to the best motoring advisors out there, the walkaround is an opportunity for a knowledgeable salesperson to explain and demonstrate the many things that make MINI a unique and engaging brand. There are many things about these cars that, if understood, enhance appreciation for MINIs and increase the value to the customer. So, a savvy salesperson who has a MINI enthusiast for a customer, can have fun showing off the car and taking the customer out for a test drive.

RULE #1. Save the walkaround for later, if at all. Unless you want the walkaround because you’re kicking tires or just starting to learn about MINI products, don’t get caught up in a walkaround. The customer thinks he/she is being shown the features of the car. The salesperson is going through carefully disciplined steps moving the customer toward a sale.

RULE #2. If you do the walkaround, YOU ASK THE QUESTIONS. If the sales person starts asking qualifying or trial close questions, politely turn it around by NICELY saying in response to the sales person’s first query, “I have a few questions myself. We can get to your questions after you’ve answered all of mine. Okay?”

Gently disrupt the process without being rude by saying, “What I’d really like to do is sit down with you for a few minutes and go over this build I did on the MINI USA web site – the build I emailed to you yesterday. After I get a sense of what your dealership is offering to customers ready to buy a car today, we can look at some cars you have that come close to matching what I’ve built.”

Or, if you’re not sure what you want, you can say, “I’d like to spend a little while looking at some of the cars on your lot and if I see something I like I’ll come get you and you can show me. Is it okay if I wander around and see all of your inventory?”

If the salesperson says that’s fine but he/she needs to accompany you because customers aren’t permitted to go alone up to the top deck or around the back or wherever the inventory is kept, then fine. Just say, “I appreciate your willingness to spend this time with me. I might be interested in doing something today if I see the right car, but this may end up just being an hour or two of tire kicking and maybe a couple of test drives. Okay?”

Here’s how I like to do it. I do my online research, learning as much as I can about the cars. I read the blogs and the reviews and watch the YouTube videos which often feature walkarounds. Then, once I have a sense of what I think I might consider purchasing, I call the local dealer, tell the dealer what I might be interested in, tell the dealer I’m in the early stages of my search for my next car, tell them what I’m driving now and why I’m thinking about making a change, and then I set an appointment by asking when would be a convenient time for me to visit their dealership, spend some time looking at cars and maybe drive one or two to see if the brand resonates with me enough to consider it for my next car.

I do it this way because it’s the truth. And I like to manage my relationships on a truthful basis, regardless of how much pressure the other party may feel to get me closed. That’s their problem, not mine.

The Test Drive

The salesperson doesn’t really know you, unless, of course, you are a repeat customer. In most instances, the salesperson is getting into a very expensive and powerful piece of machinery with a stranger who has walked onto the lot. The salesperson doesn’t know if the customer is impaired, reckless, clueless, suffering from Mario Andretti syndrome, or doesn’t know a clutch pedal from a door handle. And they gotta let you drive!!!

So, by the time you get behind the wheel, it is very helpful if your behavior has sent signals to the salesperson that this is going to be a relaxing, easy ride for both of you. And it should be.

I also always try to remember that the car I’m test driving is going to belong to someone at some point. I try to treat the car the way I would want a car I bought to have been driven by others before me.

And, if there is some feature I want to check out, like acceleration, ability to stay planted around a turn, braking, ride quality over rough pavement – whatever, I tell the sales person that I want to experience that feature. I don’t just jump on the gas or the brakes without first saying, “I want to feel the kickdown. Is it okay if I put my foot in it a bit along this straightaway?” And I always start out with great care, demonstrating to the sales person that I can be trusted behind the wheel.

And I decide if and when I want to listen to the sound system. I might be more interested in listening for tire and wind and engine noise and squeaks and rattles. And I decide if I want to interact with the salesperson while I’m concentrating on driving what may be my next car. I have no problem pulling the car over to the curb during a test drive and looking the salesperson dead in the eye and saying, calmly and politely, “I really want to concentrate on getting a feel for the car. You can show me how the navigation works later and there will be time for your questions, and mine, later. Right now, I just want to drive and if I have any questions, I’ll be sure to ask you. Okay?”

MINI sales people are often enthusiasts themselves and they want the customer to experience what makes a MINI a MINI. That’s the fun part. But they are also there to sell cars, not take fellow motorers for joy rides.

So expect a little closing to go on during the test drive. And remember, a major psychological component of the test drive is the creation of a sense of indebtedness on the part of the customer. “Hey, we just went for a fun ride and I let you floor it and whip it around. The least you could do is come back into the showroom and let me try to put you together and get you closed, like today.” But, of course, this isn’t what’s said. It’s more like, “What did you like most about driving the MINI?” Followed by, “As I mentioned when we were sitting in the car back in the showroom, my manager is ready to do some amazing things for people who want one of these fantastic machines. Let’s see what we can get him to say yes to.”

If you’re ready, having done all of your homework as discussed in previous posts on this thread, then the deal should flow much to your delight and the sales person’s amazement. You will be prepared for every step that’s coming and it should move quickly and pleasantly for everyone. If it starts to get weird after you have clearly stated what you would say yes to today, walk. If you need to look further, thank the sales person for his/her time and courtesy, assure them, honestly, that if you decide to purchase a MINI you will absolutely give that sales person the opportunity to sell you a car.

But remember, when you walk on the lot, the dealership staff is there to try and close a deal and everything that happens is focused on that goal. You owe them nothing for their effort other than honesty and courtesy. The dealership would prefer that the interaction results in a sale, but if you’re up front regarding why you’re there and you behave like a decent human being, the dealer will be happy to have made a friend and, perhaps, a future customer.

 

When I'm ready to buy a new car, I do my full research about the car I want and then go to a dealer with highest yelp rating in town that has the exact model/option or very close to it (after checking their inventory online).

For my 2014 auto F56, $28000 out-the-door was my target, and I already got pre approved by my bank for 48-month 3% interest rate. I told the dealer exactly what I wanted and how much I was willing to pay OTD. And that was exactly what I happened. I drove the new car out of the dealership in less than 2 hours that included everything from kicking tires, test driving, some haggling on the price, appraisal of my old car,, finance guy trying to add/sell some bs stuff, filling up full of fuel, washing, etc. Oh, I didn't trade in my old car because their offer was only $5000. Following weekend I sold it for $7500 on Craigs.

Knowledge is power! (to save you $$).