Vehicle Deal Tactics

Why are you encouraged to use credit instead of paying with cash? Two reasons are clear to me.

If you pay cash, you are likely to be more careful in your purchase.

• You may not make the purchase at all.
• You may delay the purchase until you have enough cash.
• You may decide there are other priorities for you cash.
• You may press the vendor for a better deal.
• If you do not get a substantial discount on the potential purchase you may just walk away.

If you pay cash, the dealer, the vendor, the store, etc., will not get more benefit from your purchase by gaining from a financing deal.

• Carrying your financing increases the value of your purchase.
• Carrying your financing provides ongoing interest income.
• Offering you credit helps push you toward a purchase.
• Offering you credit helps you make a quick decision.
• Offering “easy credit terms” gets more types of people in the door to make a purchase.
• Offering to finance the deal gets you into the store or showroom much quicker.
• Offering to loan you the money makes you think about a purchase you would not have previously considered.

You need to know that vendors who are offering you easy financing for your purchase don’t do so for YOUR benefit. It is not offered to you because you are so well liked that the store or dealer just wants to make your life a bit easier. Offering to finance your purchase is purely in the self-interest of the vendor.

Are there any financing horror stories in your past? Your comments appreciated!

Content © Rich Brott, 2011

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