R56 Discount for cash?
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1st Gear
Joined: Sep 2007
Posts: 20
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From: Greeneville TN (originally from England)
Discount for cash?
Has anyone been able to get discount for a cash sale? I know my dealer here in Houston is saying MSRP is the price but wonder if an outright cash purchase may get some reduction. Anyone out there who has managed to prise some dollars back from the dealer?
Coordinator :: Emerald MINI Car Club
Joined: Jun 2007
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From: Eugene, OR
They don't make any more off from a cash sale versus financed and they do not make any more from a financed sale versus cash.
Earning commisions off from originating a loan is called getting a kick back and that practice has been illegal for quite a while.
So, no, you probably won't get any discount for paying cash. The only advantage to a cash sale is you will not have to pay the interest on a loan. If you can find someplace to invest your cash at a higher rate of return than the interest rate you can get on a car loan, you'd be better off investing the money and getting the loan.
Earning commisions off from originating a loan is called getting a kick back and that practice has been illegal for quite a while.
So, no, you probably won't get any discount for paying cash. The only advantage to a cash sale is you will not have to pay the interest on a loan. If you can find someplace to invest your cash at a higher rate of return than the interest rate you can get on a car loan, you'd be better off investing the money and getting the loan.
2nd Gear
Joined: Mar 2007
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No cash discount for me, I don't think that really exists in car deals. I did put $4000 on a credit card for air miles. The CC transaction does cost the dealership a few percent for processing so there will be a limit. My dealership told me $2000 was the limit. I used the CC twice though. Once for a deposit and the second time on delivery.
2nd Gear
Joined: Jul 2007
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A dealer will often make more on the financing of the transaction than on the sale of the vehicle.
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6th Gear
Joined: Jan 2003
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What they said about cash....but...
MINI of the Woodlands has been known to offer discounts of some sort. That may have depended on dealer circumstances, though, so if they won't budge don't get too upset. For a long time (and still in most places) discounts on MINIs are unheard of. That said...I do feel a MINI is an utterly fantastic value for the money, even moreso if you pick and choose yor options carefully!!
MINI of the Woodlands has been known to offer discounts of some sort. That may have depended on dealer circumstances, though, so if they won't budge don't get too upset. For a long time (and still in most places) discounts on MINIs are unheard of. That said...I do feel a MINI is an utterly fantastic value for the money, even moreso if you pick and choose yor options carefully!!
Last edited by gokartride; Nov 4, 2007 at 10:12 AM.
1st Gear
Joined: Oct 2007
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Got a small discount for a cash sale on my purchase a couple of weeks ago. Amounted to approx. $500 off MSRP when all said and done. Cash or finance doesn't seem to matter much - no huge discounts like you would expect from domestic cars like GM, Ford or Chev.
Dealers can (and do) get paid "reserve" (essentially a commission) on finance and lease contracts, the amount can vary greatly based on the terms of the loan.
This is why paying cash does not get you a better price.
Coordinator :: Emerald MINI Car Club
Joined: Jun 2007
Posts: 1,790
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From: Eugene, OR
This is what I found on Wikipedia:
Most dealers, however, are indirect lenders. This means that the contracts are immediately "assigned" or "resold" to third-party finance companies, often an offshoot of the car's manufacturer such as GMAC, or banks, which pay the dealer and then recover the balance by collecting the monthly installment payments promised by the buyer. Sometimes the dealer has the option of marking up the interest rate of the contract and retaining a portion of that markup. For example, a bank may be give a wholesale money rate of 6.75% and the dealer may give the consumer an interest rate of 7.75%. The bank would then pay the dealer the difference or a portion thereof. This is a regular practice because the dealership is selling the contract to a bank just like it sold a car to the customer. Most banks or states strictly limit the amount a contract rate may be marked up (by giving a range of rates at which they will buy the contract). In many cases this amounts to little difference in the customers payment as the amount borrowed is small by comparison to a mortgage and the term shorter.
The loan I got through my credit union was about .75% lower than the lowest rate Mini USA was offering at the time. I didn't even apply for one through the dealership, I asked them what their lowest rate was and then I checked at my credit union, which was of course at a lower rate.
We tried doing $10k down via CC but MoS wouldn't allow us to do more than $5k. As has been said, dealers make as much profit from loan origination and add-ons as they do from the car itself, so paying cash means nothing to them. This might work with a business that does mostly CC sales, but car dealers don't count as one.
OVERDRIVE
Joined: Aug 2006
Posts: 7,201
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From: Norfolk, VA
We tried doing $10k down via CC but MoS wouldn't allow us to do more than $5k. As has been said, dealers make as much profit from loan origination and add-ons as they do from the car itself, so paying cash means nothing to them. This might work with a business that does mostly CC sales, but car dealers don't count as one.
(If you ever sell stuff on eBay, this is the same reason that you're not allowed to pass the 3% PayPal fee on to the buyer if they pay with PayPal.)
OK, I did some research instead of just going off from what I "thought" had been implemented in the late 90's. I was wrong...this has not been made illegal but it has been regulated in most states.
This is what I found on Wikipedia:
The only reason to get dealer financing is to take advantage of a 0% interest rate (which Mini USA does not offer) or if you cannot qualify for a loan through a bank or credit union.
The loan I got through my credit union was about .75% lower than the lowest rate Mini USA was offering at the time. I didn't even apply for one through the dealership, I asked them what their lowest rate was and then I checked at my credit union, which was of course at a lower rate.
This is what I found on Wikipedia:
The only reason to get dealer financing is to take advantage of a 0% interest rate (which Mini USA does not offer) or if you cannot qualify for a loan through a bank or credit union.
The loan I got through my credit union was about .75% lower than the lowest rate Mini USA was offering at the time. I didn't even apply for one through the dealership, I asked them what their lowest rate was and then I checked at my credit union, which was of course at a lower rate.
The only reason to get dealer financing is to take advantage of a 0% interest rate (which Mini USA does not offer) or if you cannot qualify for a loan through a bank or credit union.
The loan I got through my credit union was about .75% lower than the lowest rate Mini USA was offering at the time. I didn't even apply for one through the dealership, I asked them what their lowest rate was and then I checked at my credit union, which was of course at a lower rate.
The loan I got through my credit union was about .75% lower than the lowest rate Mini USA was offering at the time. I didn't even apply for one through the dealership, I asked them what their lowest rate was and then I checked at my credit union, which was of course at a lower rate.
Our biggest issue is that MINI dealers just don't have the price flexability that American vehicle manufacturers do, for various reasons including currency exchange rates.
It seems to me the biggest reason for not offering any or very low discounts is that these cars sell themselves. Either you get lucky and find a car on the lot that hasn't been sold and is exactly what you are looking for, or you are custom ordering the car.
As for domestics and other larger companies that offer huge discounts it's because their cars don't sell themselves and they have to find creative ways to get the cars off the lot and into the consumers driveway.
As for domestics and other larger companies that offer huge discounts it's because their cars don't sell themselves and they have to find creative ways to get the cars off the lot and into the consumers driveway.
It seems to me the biggest reason for not offering any or very low discounts is that these cars sell themselves. Either you get lucky and find a car on the lot that hasn't been sold and is exactly what you are looking for, or you are custom ordering the car.
As for domestics and other larger companies that offer huge discounts it's because their cars don't sell themselves and they have to find creative ways to get the cars off the lot and into the consumers driveway.
As for domestics and other larger companies that offer huge discounts it's because their cars don't sell themselves and they have to find creative ways to get the cars off the lot and into the consumers driveway.
every time you apply, you get a ping on your credit record. This can affect you in a negative way - "Too many requests for credit" on your credit score can lower it. The dealership won't give you a firm rate until you allow them to run your app. I'd suggest not doing more than one or two apps....this is why places like loantree.com are good. One credit score pull, multiple things to choose from.
every time you apply, you get a ping on your credit record. This can affect you in a negative way - "Too many requests for credit" on your credit score can lower it. The dealership won't give you a firm rate until you allow them to run your app. I'd suggest not doing more than one or two apps....this is why places like loantree.com are good. One credit score pull, multiple things to choose from.
Credit agencies have gotten more sophisticated. They finally are realizing that people shop for everything, including loans. As already mentioned, dealers generally get better rates from the very same lending institutions. Why not let them work to pass those saving on to you?
3rd Gear
Joined: Aug 2007
Posts: 194
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From: Victorville, CA
I had pre arranged a loan through my Credit Union. When I went in to purchase, I told them if they could match the rate, I'd go with their financing. They matched and all was done. I miss the days of low rates. 6.59 aint to shabby now a days! I just remember the 3.9 on my focus 4 years ago!!!!!
1st Gear
Joined: Oct 2007
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I just financed my daughters 2007 mcs at pentagon federal credit union... it's 5.29 for up to 6 years... they also have a balloon option plan... 5.54% for 6 with a balloon payment.... if you need more monthly liquidity that one isn't a bad deal... the math I did with my numbers... it cost an extra 1500 to do the 5.54% with the balloon...
remember credit unions are non-profit... obviously banks are in it for the phat cash...
cheers..
remember credit unions are non-profit... obviously banks are in it for the phat cash...
cheers..