I completely agree with Kingman here but with provisions.
1) Never buy a personal car that you can not pay cash for; even if financing it makes more sense. You never know what tomorrow will bring… It is nice to be able to walk away from any situation with out a
black cloud of debt hanging over your head.
Having said that, all of our new vehicles are on closed end leasing; if the business goes bust the cars go by by. That is what happened to the 93Vette, 528 Beamer & S-Type when I closed up the Eastern European operation.
2) All cars, even the most collectable are rolling liabilities the moment you put them on the road. The best 63 Split-Window Top Flight is a liability when the tires skid on an oil slick on the way to Bowlingreen and it bumps into a parked 1978 Saab.
3) You bend it, the insurance company drags its feet; can you afford to make the payments and rent/buy another car to drive?
4) The list goes on and on.
5) Regardless of what else you might hear money talks, bull**** walks.
Dealers do not
pay for the cars on their lot and GM does not
give the cars to the dealer on good faith. When the cars arrive at lot they are placed on what is called
Floor Plan. This is a kind of financing that is used throughout retail marketing… from refrigerators and washing machines to Jet aircraft. When the Maytag, Lear, or Corvette arrives at the dealership the lending institution (
in the case of Chevrolet it is normally GMAC) pays the manufacture for the item so the owner of the item is actually the Floor Plan Company. The Floor Plan companies have people who check each dealer on a weekly or daily basis to see that the products they own are still there, the moment a car, jet or washing machine is sold the dealer must pay the Floor Plan Company in full and on the spot.
Now here is where things get to be real fun. The manufacture wants to sell lots of his product so he agrees with the dealer that he will ¨
discount¨ his product for X days. This means that the manufacture will pay the finance charges of the Floor Plan for X days. In the Auto industry this is usually 90 days.
So for the first 90 days the dealer has the car free of charge, from the 91st day he is paying interest on the car every day it sits on his lot.
Damn, I am glad that I was a math major! It is going to get really involved now.
a) The dealer has the car for 90 days free of charge; after that he pays market interest rates on the net invoice price until the car is sold.
b) The dealer gets a rebate at the end of each month or quarter depending on the total number of cars that he buys.
c) The dealer get advertising money from the manufacture based on the # and value of all of the cars he buys.
d) If you finance you car the dealer gets a kick-back from the finance company.
e) The buyer always gets screwed.:W
The obvious thing to do is to watch the dealer day by day and check off on your PDA how many days that yellow Z06 has been on the lot. Then on the 91st day offer the dealership a deal he can’t refuse.
Better yet try to deal with the
Fleet sales division. We saved over $7000 on the Pontiac van and it was a NO BS deal.
The only negative being that we had to pick it up in Germany and drive it back across Europe. The total cost of the trip for food, gas and hotels was less than 2K. Poor us having to take a European Vacation at the local dealers expense!:cry Oh I forgot - I had to get on my hands and knees and put the Spanish plates on the bumpers. Sooo that is what the dealer does for $5000. Like the $17 sandwich at the airport… seems reasonable to me.:eyerole
BTW 2 of my Uncles owned GM dealerships back in the last century and another Uncle was a GM regional service rep so this could be considered insider information…Please do not put me in the cell with Martha Stewart, I would rather do the soap on a rope dance than to have to face that every day.
