I am planning to buy a new car. I went to a dealership and when talking to a sales person I said I can pay cash. He knocked down the price quite a bit.
Since the dealership did not have any low APR promotions, I knew I had to get pre-approved. Now if I go back and tell him that I would like to do the finance and I am pre-approved, will that be a problem? Can he retract the offer price?
There is no rule that says the dealer has to honor that deal, nor is there any that says he/she won't.
However, if you are thinking of financing through though the dealership they are likely to honor the deal. They PREFER you finance it. If you finance it through the dealer the salesman just got TWO sales (a car and a loan) and probably gets a commission on both.
If you finance it through a third party it makes no difference to the dealer, it is still a cash deal to them because even though you pay off the car loan over years, the bank pays them immediately in full.
Yes, he can retract the offer - it was a cash-only offer, and if you're financing, it's no longer "cash".
Unless, of course, you get the financing through your local bank / credit union, and they hand you a check (like on a personal loan).
Then it's still cash.
However, the salesman can still retract the offer unless it's in writing because you haven't signed anything yet.
The price of financing will always be higher because the dealer doesn't get all their money today.
Also, if you finance, you are not paying just the cost of the vehicle, you are paying interest, so your final cost will be higher (unless you were one of the lucky souls who got 0% financing atop employee pricing, and therefore are actually saving money by having a payment).
I am a carsalesman. Lets get one thing straight, we are not allowed to give people a better deal just because they pay cash, regardless of what some people say. That can be seen a discrimination as not all people are fortunate enough to have cash available. if anything, finance is better for the dealership, as we get finance commission and the finance company DOES pay us the total amount immidiatly
So there are a few angles to this. The previous answers are correct in saying that cash is different than financing and, therefore, the dealer can rescind the offer. As for financing, the bank or finance company can give the dealership a "kickback" or charge a "fee" based on the customer's credit score.
So everyone saying that the dealers want you to finance....well yes, so long as you have good credit. The dealership will make the most money off of someone with good credit. The bank charges a fee to the dealership for the loan to a customer with bad credit.
Use that tactic with good credit...no problem. Use that tactic with bad credit.....problem.
as a used dealer in subprime sales, finance has to be higher than cash because every finance deal has a lender that takes a percentage "discount" on every deal financed. if you notice a dealer is hesitant to give a price before knowing if cash or finance, because every bit of a cash deal's profit will be taken by a finance company in order to finance the deal and then there's no deal. you might be approved but if you're not willing to pay more for a finance deal, the deal isn't happening if I have $5000 in a car, you want to buy it for $6000 and the finance lender wants to take $1200 as a "buy-fee" leaving me $4800 in the end.
