DRE- I had choice of a $950 rebate or the 1.9% rate for 48 months. Compared to other financing, the 1.9 rate saved more than $950, so I took that.
The price of the vehicle was an entirely separate deal. I had looked up invoice price from web sites, told them that. AAA has a "Vehicle Pricing Service" with agreed-upon markup. So does Sam's Club. Toyota said their agreed-upon price with Sam's was $650 over invoice. Their invoice price matched about what the web said. I don't have the exact number with me, but believe I paid $3,100 below MSRP plus got the 1.9%. -Ben > Also, I had the impression that if you took the superior finance rate, you > had to buy at msrp which is usually a rip off. > DRE > > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] > Sent: Monday, June 30, 2003 5:34 PM > To: CF-Community > Subject: Re: New car > > > 1) Cars have a fairly large profit margin. > 2) At this point in the economy, auto manufacturers care about moving lots > of cars. > 3) Having cheap interest rates entices people to buy new cars. > 4) The amount of cars being sold outweighs the loss on lent money. > 5) Only the best customers get the "1.9%" interest rate. Everyone else gets > gouged. > > ----- Original Message ----- > From: jon hall <[EMAIL PROTECTED]> > Date: Monday, June 30, 2003 5:31 pm > Subject: Re: New car > > > Ok...forgive me if this is econ 101, but I got another one :) > > > > So in essence the lending branches of the auto manufacturers are not > > traditional banks in that banks borrow money from the government, and > > these guys lend money out of their own pockets...so they do not have > > to worry about the prime rate. > > > > Wouldn't they still be vulnerable to inflation though? I mean...if > > they loan money out at 1.9%, and inflation >= 1.9%, the the real money > > that the car buyer is paying for the car is actually amounts to > > less than the sticker price + interest rate...or not? > > > > If I'm not way off base...my whole line of thinking is that the auto > > manufacturers are betting that inflation remains in check for at least > > the next 4 years...and for inflation to remain in check, there can not > > be a big economic improvement...which usually from what I've read, > > will cause inflation to rise until the Fed checks it with interest > > rate hikes. > > Even if inflation is about 1.9% for the next 4 years...doesn't that > > make the lending branches of these companies a lot less profitable, > > meaning they have to raise prices on the cars...meaning the inflation > > rate goes up even more if we get too fast an increase in > > inflation, or > > it stay too high too long? > > > > Good god...this stuff is confusing :) > > -- > > jon > > [EMAIL PROTECTED] > > > > Monday, June 30, 2003, 6:52:02 PM, you wrote: > > CG> Your understanding would be correct if it was straight > > financing, but it > > CG> isn't, so,well,it isn't. > > > > CG> These are promotional rates and have nothing much to do with > > actual intrust > > CG> rates like the "prime" rate and the overnight rate. They are > > usually funded > > CG> by the manufacturer, but usually the dealer has to kick in > > something as > > CG> well. Most of the big auto companies have their own lending > > arm, and,oddly > > CG> enough, it is often the most profitable part of the company. > > > > CG> There is no line relationship between interest rates and > > inflation. > > CG> Cary Gordon > > > > CG> At 06:16 PM 6/30/2003 -0400, you wrote: > > >>Congratulations :) > > >> > > >>I want to branch a little though...isn't 1.9% less than inflation? > > >>Doesn't that mean that over time, if interest rates rise, they > > will be > > >>making less money? Especially considering the fact that with all > > this>>built in economic stimulus...we are bound to see a really > > big uptick > > >>in inflation if/when everything starts to turn around. > > >> > > >>Or is my understanding of how this works incorrect? > > >> > > >>-- > > >> jon > > >> [EMAIL PROTECTED] > > > > > > CG> > > > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Archives: http://www.houseoffusion.com/cf_lists/index.cfm?forumid=5 Subscription: http://www.houseoffusion.com/cf_lists/index.cfm?method=subscribe&forumid=5 Get the mailserver that powers this list at http://www.coolfusion.com Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
