Topic: 0% financing?

[neil]

Cruised into a Hyundai dealer today for a first look and an test haggle for the Santa Fe.

In lieu of the 0% financing, I can get a $3000 rebate, plus I qualify for the grad rebate of $750, which knocks the price down nicely off the bat.

The $3750 in rebates are sponsored by Hyundai, and shouldn't take anything out of the dealer's pocket correct?  This should leave me some room deal down from the MSRP, although that bottom line is already starting to look better.

ADDED:  Just joined CCC and wasn't particularily impressed with the report I got....  the wholesale price is only $1098 lower than the MSRP (ignoring all the above rebates).  In the "special prices" area, a Dealer Markup of $800 is applied, for a whopping savings of $298 off the MSRP.  There must be more haggle room than this on a HYUNDAI; in fact, the sales person I dealt with today gave me the impression (as is his job) that there'd be more room to move, although I resisted getting into numbers on a first visit.

There's got to be a way to get that $1545 Freight and PDI; the dealer was coy about giving out a breakdown on the individual fee amounts before discussing the rest of the numbers.

I'd appreciate some dealer feedback on how valuable to the dealer an end-of-month or end-of-week sale is (generally), since I could pick this car up by the end of March if necessary, and don't mind helping the salesperson/dealer put a little extra in their pocket if it will save me a buck or two.  Time to launch a cross-dealer quote campaign...

I'm probably going to leave my PoStiac out of the deal, although I've already given the salesperson some idea of the mechanical issues it has, and what I'd need to get out of it to consider a trade in.  There's still some value in it as a parts car or possibly a project for a mechanic, so there's no point letting them give me an inflated trade-in value instead of a straight price discount.

Doc, you are correct the $3750 savings are from HAC, and not the dealer, so it effects the bottom line in no way.  Grad Rebate used to be cost shared with the dealer but no longer.

The $1545 Freight/PDE are invoiced directly to the dealer.  It is right on the bottom line, they rebate back upon sale a small portion for the pde, there is a thread about that kicking around somewhere where I broke it down.  But it is a direct cost,not marked up passed to you.

End of the month sales tactic may help, but again there truely isn't much margin in the unit, so the savings would be marginal.

I have a suspicion, as the S'Fe 06 is now out of production, with the new '07 due by june, the rebate may increase near may to clear inventory.  Wait another 6 weeks and it may be $4k.  Nothing official, just speculation on my part.

[Doc Otis]

Thanks for the reply, and sorry for the delay in this post... I've been stranded up north doing fieldwork.   

I stopped in Red Deer to try to shake down a deal with a dealer there on the way back, and while they were unwilling to nail down a "hard price" unless I was willing to make a deal there and then, but I managed to suss out the potential markdown,and was told that getting $1000 more off would be "pushing it".  Sounds like they aren't willing to get into a bidding war with other dealerships, either, especially considering I won't be returning for servicing.  I was also told that the MSRP on Hyundais had been lowered in January, hence the old haggle room on these vehicles is essentially gone.  Any idea where I'd find a 2005 MSRP on the 2006?

I'll try "pushing it" with my Calgary dealer tomorrow.  They aren't charging me extra for metallic paint, plus they haven't pre-installed the block heater and security markings, so the bottom line is about $725 + tax cheaper.

Especial thanks on the heads up on the Freight/PDE situation and the potential new rebates... I was told in Red Deer that new pricing structure was coming through on April 1st, and while they didn't know what it would look like, they would be able to offer me the better of the two rebates if I bought tomorrow.

[goldstone]

I was also told that the MSRP on Hyundais had been lowered in January, hence the old haggle room on these vehicles is essentially gone.  Any idea where I'd find a 2005 MSRP on the 2006?

I don't know about SantaFe, but I can tell you what happened to Sonata at the end of January.

2006 Sonata GL 2.4L Auto

1. MSRP went from $22,900 to $23,295. +$395
2. The wholesale price quoted by CarCostCanada jumped by +$823.

At the first glance, the dealers lost about $430 of the haggling room.

But...

At the very same time, Freight&PDI quoted by CCC went from $615 to $1,345. +$730.

IF CCC numbers are correct -- note the big IF -- the dealers actually gained a tiny extra bit of the haggling room ($300).

[Doc Otis]

I'm picking up my new Santa Fe today....  I managed to get a pre-tax discount of $510 (in addition to the trading dollars and grad rebate), which seems fair enough if CCC correctly puts the MSRP at $1098 above the wholesale cost.  I was trying for $1000 (after tax) off.  In any case, it beat the dealer's CCC offer of a $298 discount; I 'neglected' to mention that I had joined CCC.  Not the best deal ever, but fair enough, considering that it was a base model with no accessories to mark up (it was one of the few base models left in Alberta).  I also made the salesman throw in a couple of coffee mugs.   

Thanks for the help!

[goldstone]

Hi Doc,

I'm just curious...

Did you pay Freight & PDI as quoted by CCC or did you get any discount there as well?

Any admin fees on top of that?

[Doc Otis]

goldstone, it seemed to be consistent with what neil said...  Freight & PDI is a single fee on which the dealer won't make reductions.  I paid full Freight / Delivery, but there's no admin fee.  Once the basic discounts were applied, I started making deals on the "all in" price for convenience sake, realizing that the actual pre-tax discount from the dealer was lower.

[No H2O]

For a dealer offering 0% financing on 48 months, where's the trap?

There is NO SUCH THING as 0% financing. All it is is a TRAP to lure you into buying. There are no free rides, just great deals that only YOU can come up with. You'll save more not paying PDE, Freight and Admin.

[neil]

There is NO SUCH THING as 0% financing. All it is is a TRAP to lure you into buying. There are no free rides, just great deals that only YOU can come up with. You'll save more not paying PDE, Freight and Admin.

What?

[Panzer]

There is NO SUCH THING as 0% financing.

Yes, there can be.  Some places may offer an MSRP discount if you pay cash but others don't budge from the MSRP and still offer 0% financing, depending on the time of year and market conditions.

All it is is a TRAP to lure you into buying. There are no free rides, just great deals that only YOU can come up with.

Of course it's a scheme to lure you into buying.  And no matter how great the deal, you still have to pay to get the vehicle.

You'll save more not paying PDE, Freight and Admin.

On that, I disagree.  PDI, freight & admin runs anywhere between $1000-$2000 depending on the vehicle and where you buy it.  0% financing can save you as much, and usually more than that.  For example, 60 months financing on a Civic costs more than $4000.

And last but not least, nothing prevents you from negotiating a good price regardless of the 0% financing thing, thus saving on all fronts.

[Giant Dwarf]

   100% on all fronts there Panzer.

[No H2O]

For example, 60 months financing on a Civic costs more than $4000.

I doubt you'll get 0% financing on a Civic for 60 months for the full amount.

No such thing as a free ride. Show me the bank that offers 0%.

[No H2O]

PDI, freight & admin runs anywhere between $1000-$2000 depending on the vehicle and where you buy it.

Well I hope you're not silly enough to pay that or any amount.

[Panzer]

I doubt you'll get 0% financing on a Civic for 60 months for the full amount.

Of course not.  I don't think Honda's ever offered this in 30+ years.  On the other hand, the Big Three have and others as well.

No such thing as a free ride. Show me the bank that offers 0%.

Wish granted.

http://www.mazda.ca/
(check out their incentive section)

http://www.theautochannel.com/news/2003/04/01/158451.html

[Panzer]

Well I hope you're not silly enough to pay that or any amount.

Sometimes people don't have a choice.  Look at anyone who buys a Fit or Civic lately.  It's all about supply & demand.

[Craig]

Whenever I've gone car shopping and been lured into a dealership by offers of low finance rates, there's always been a sweater deal available on the car if I paid cash.  There's the source of your true interest rate right there.  Perhaps some manufacturers don't work this way, and will not discount the car when paying cash, but who's kidding who?  It's about the time value of money.  $1 today is worth $1 times the going interest rate a year from now.

To do a proper price comparison between cars these days, you need to bring a freakin' laptop and financial spreadsheet with you while shopping.

[Panzer]

 

[neil]

Chansen, you are right, but it depends on the model and the mfgr.

In BC, and probably some other jurisdictions, the fine print must state what your true rate is.  So if there is a rebate in lieu of the subvented rate, they must publish what the blended rate is.

For example  The Sonata:  If you were to finance $27k at 0%, your cost of borrowing is $3000 (the rebate you forfeit for the rate).  Your true rate is about 4.7%.  This is still good, almost a point below prime right now, and about 3 points below a bank fixed rate loan, and still will save about $2k over the 60 months vs regular finance.

If you financed only over 36 mo, true rate is about a wash with the banks, about 7.8%.