DON'T SAY "I'M PAYING CASH!" at CAR DEALERSHIPS - Auto Expert: The Homework Guy, Kevin Hunter

pain cash for your next car great news you're a cash buyer but to something very important that you need to know let's visualize this you're kind of thinking you're gonna walk in the front door and flash that cash because everyone loves cash and the dealership will be so impressed that you'll get an amazing car deal right no no no and no wrong don't shoot yourself in the foot hi I'm Kevin hunter and here's the video many of you have been asking for today you're gonna find out why you should never tell a dealership I'm paying cash the moment you walk in the front door before we get started I want to be clear that there are both good and bad people in the car business some are on you like a dog will treat you like you're a piece of meat and they think you don't belong there unless you're ready to buy a car today the other type of salesman will respect you and give you a chance to make a proper decision on what is the second biggest buying decision which car salesmen do you hope to find on a car lot all right let's talk about cash don't walk in the front door of a dealership and say you're paying cash chances are you'll run into the wrong kind of salesman and you'll get burned that said I want to be clear that I'm not suggesting at all that you should lie you're going to pay for the car in the end right that's all that should really matter to the dealership in the grand scheme of things that you pay for the car so what I'm saying is that you shouldn't mention how you plan to pay for the car the moment you walk in the door and don't start babbling about cash at any point during the negotiations don't play those cards until you're in finance before I explain what changed in the business model that made dealerships dislike cash a little housekeeping if you're a first-timer on the homework guide channel consider subscribing and leaving us a comment below add hashtag the homework guy if you'd like a response directly from Kevin or one of the homework guy staff members we're always glad to help our loyal followers best part is there is no charge you can also email the team at info at the homework icon with a specific question or if you'd like a free contract review just blackout your personal information and send it to us we'd love to hear from you just be aware that we do get a lot of requests so just be patient while you wait for response back to you Kevin okay what's true today is that if you walk to a dealership and say I'm paying cash you can actually expect to pay a higher price for your vehicle than any other car buyer who plans to finance almost doesn't make sense you thought cash is king right well not anymore and while it seems counterintuitive that talking about cash too early in the process could hurt you it's true dealers dislike cash buyers because of changes with their business model and some dealers are getting downright ridiculous with how far they go to penalize a cash buyer let me share with you a recent comment on this channel from Shang he writes hey Kevin I've been shopping around and considering purchasing a truck cache there have been a few places that state that they charge a $700 fee for paying cash and not financing I've been able to talk most of these dealers out of the other fees they try to charge but they really seem to be firm on this bank fee for paying cash and not financing thanks in advance who would have thought this would happen certainly nobody from the cash is king crowd charging a $700 Bank fee for using cash oh yeah but the reason isn't what you might think it is years ago before the menu boards the product selections and a variety of charged fees cash was king on a car lot but not true today full disclosure I'm a cash buyer just like some of you but unlike most of you I've worked inside the walls of a dealership and because I understand their business model I will never tell a dealership I'm paying cash until I have my car deal in writing and I'm sitting in the finance office and then there's even the correct moment when you're there I'll share that here in just a moment but if in the car negotiation process they ask me about filling out finance apps or monthly payments I just say I'll see what your finance man has to offer after we finalize the price negotiations if they persist I say listen I don't talk finances outside of a private confidential room with someone who doesn't have the authority to sign out the car no offense mr. salesman but since that is not part of your job I'm not doing that out here I never lied to them and it suggests you don't either I just firmly tell them I'm not talking about it until the price negotiations are over that usually kills it now if cash is no longer king what changed all of that pretty simple as I mentioned it is the business model the internet changed all kinds of things for dealerships but the primary one was how they make money for many years now everyone has had access to all the information you ever wanted concerning car price most of you knew exactly where your chosen vehicle is worth because of the level of pricing information out on the web it's just astounding if you ever find yourself at a dealership and you have no idea what the fair market price is for the vehicle you're shopping for well it's only because you didn't even try to look shame on you with dealerships beating each other up with online car pricing something had to give and it did they developed other ways of taking money away from unsuspecting customers ways they don't advertise and things you likely don't know much about although you might have a clue bottom line when the business model changed a typical car dealership no longer makes the majority of their profits off the sale price of the car let me say it again the sale price the place you put all of your attention on is no longer the moneymaker at a dealership when you realize they're making most of their money elsewhere not on car price you start to understand why they are so willing to bargain right down to basement car prices they are counting on the subsequent steps inside the dealership to empty your pockets these steps all come after price negotiations are over now if you utter that scary word cash too early and yes I did say scary word that entirely shuts down any further conversation about car price and for a really simple reason they aren't likely to take advantage of a cash buyer in finance and they know it so they stand firm on the price of the car hoping to get everything they can out of you right then and there think about it when the finance office is writing up a car loan for you you'll notice the main question they ask is what is your payment goal and why do you think they ask this question it's not for the purpose of doing the best job to help you afford the vehicle you're trying to buy they ask the question because they want you to think less about total cost and more about a single number in monthly payment as soon as this change in focus is a comp they can pack all those juicy profit-generating fees and products into your car loan what might have been a 48 month loan suddenly becomes 60 months 64 72 or 84 months you'll hear good news I got you approved and you're right at 525 a month just a few dollars away from your monthly payment goal you might think it's a little high but you're amazed and happy but you don't realize the guy just screwed you over he's going to make another thirty five hundred dollars off you and he has your loan term spread out over such a long time period your grandkids are gonna be graduating college by the time you pay this bugger off to do all of this they need a car loan to bury the truth cash buyers destroy all that opportunity with a car loan they take thousands of dollars from you after you negotiated the sale you get that a car loan lets them rip you off no car loan the deception strategy and finance is out the window aha now you're seeing the light without a car loan to write the can't vary cause they can't hide profits and they sure as heck aren't going to get you that savvy cash buyer to pull more money out of your pockets you have the hard-earned cash in your pocket for a reason you're smart with your money and financially smart people are not easily buffaloed by a slick talking finance officer making money in the dealership is nothing more than a process that starts somewhere to sale the car makes additional steps like the accessories department and ends somewhere else like the finance office some steps add a lot more profit than others the reason cash is not king in a dealership is because profits are king and they make a majority of their profits in finance not off of cash buyers cash is a bad thing because it interferes with profits the reason people get stuck at dealerships for hours these days is because the majority of the money is being made after price negotiations the longer you're there the more money they are making they make a little money on the sale price make good money on the trade in and make fantastic money on the financing and most of that fantastic money is coming from products and fees in finance now you should understand you don't mention cash and in finance at this point you're done with the negotiating at a sales level but you're not even close to being done in finance it's important how you proceed from here and I promised I'd tell you how I do it I sit down in finance and ask the finance officer to please add an appropriate tax title and license to the sale price of the car so I know what the total is if he tries to shift the conversation to financing I'll just put them back on track by saying before any of that I need to know the total what will I be paying and then we can discuss the payment options they don't like that they want to get into menu discussion presenting products and talking about protecting my investment as if a rapidly depreciating piece of metal the car is an investment ask any account it's an expense item not an investment when you're looking at expenses why would you want to increase your expense some finance officers realize that only a very knowledgeable person makes statements like this and they cut to the chase however there are several clueless ones they proceed trying to line after line to move the conversation towards products notice I still haven't mentioned I'm paying cash you have to stay in control I let the finance officer present the deal I look it over I use the state website to calculate tax title and license and I check to see if he got it right then maybe I see a document fee for 599 bucks and I'm only willing to pay $75 I draw a line through it if it's the only problem I look up and say change that to 75 bucks and we have a deal if he says he has to charge every customer the same because of a lame state law well I just go out and get a hold of my salesmen and I say you know I've reduced my offer by five hundred and twenty four dollars because of a ridiculously high 599 doc fee and Finance I'm only paying him seventy five bucks well seventy percent of the time it goes exactly like that sometimes the dealer will refuse and then I'm out the door you have to be willing to walk when you're dealing with crooked people never give the crooks your business that's how we force bad dealers out of the business all of us refusing to do business with shady dealers now let's say there's a $500 window edge theft program all so on the paperwork again I cross it off I line out everything I'm not willing to pay for and give it back to the finance officer saying get rid of that and we have a car deal notice I still haven't said anything about cash I'm not lying to them but I'm letting them believe they might get me somehow someway every good card player understands this it's not lying it's not cheating it's just plain old smart when all is done it confirmed the bottom line this is essentially the out the door price right he nods I say well based on X credit score and plenty of income to support that what are your current rates on a 36 month alone he doesn't like this because only smart car buyers get 36 month loans if they finance at all he's not in control and he starts to figure that out he gives me an approximate rate lays out the term and then asks so what were you gonna do for a down payment I say figure it out with half down here's the thing I said I'm a cash buyer but I will still occasionally take out a short-term loan just to keep my credit file current this is just smart in the event I ever decide to use credit for something if the deal looks good that he presents all say well write it up if it doesn't I already confirm that this is the out the door price don't bring actual cash with you interestingly that's what drug dealers do and other people trafficking in an illegal activity these cars to launder money the moment you pull out a big wad of cash it opens up a whole new world when a dealership receives cash exceeding $10,000 form 8300 must be filed the deal may in fact be an attempt to launder illegal funds if ten thousand or less was received by the dealer and the deal gets cancelled the dealer may voluntarily file form 8300 anyhow if the transaction appears suspicious bottom line you might be opening up an investigation on yourself no sense creating problems you don't need now let's recap for the person who walks in the door and blurts out I'm mr. big stuff here and pain cash give me a deal well you got a good deal all right like it or not you paid a much higher price for your vehicle because you just notified them upfront that they have no endgame with you no way to hide these profit packing goodies at the end without the end game to play they nailed you to the wall right there and suddenly they didn't want to budge an inch more on car price they had to take everything they can from you before you want to step further because you just destroyed the biggest money-making opportunity they have that's the finance office makes sense never say you're paying cash up front never this is the kind of straight talk you can expect on this channel so I encourage you to subscribe and stay up to date the information you walk away with could save you thousands of dollars on your next car purchase and you'll know right where to come back for refresher the next time you decide to head out and go do some car shopping maybe you still have questions if so put them in the comment section below I try to answer as many as I can if you want to thank me for this service simple enough hit the like button or maybe you want to share it on social media with her family and friends that's always much appreciated and finally some of you have asked this question how do I tip this guy for all his help well I'm not expecting you to pay me for what I do but if you do wish to send me a tip I'll put a link in the description box down below just don't go trying to hurt yourself financially a dollar or two this great says thank you like anything else for all those car dealership followers the owners employees finance officers I want to thank those of you who come here regularly to validate what I've shared with my viewers your comments are priceless and I've even made videos from your feedback I also want to say to those of you who complain especially the people who say oh just another guy who didn't make it in the Qura business or hey you're giving us a bad reputation look up the Gallup poll done each year on most and least trusted professions a car sales have been tied for dead last with a telemarketer and a congressman I didn't make that reputation for you you earned it yourself too many crooked dealer owners earned it for the entire industry I'm just helping to flush them out I challenge you to go out and help me fix it to the rest of my viewers thank you for joining me here today and thank you for all the kind and supportive comments that always show up on my videos I wish you all the very best cardille you ever thought possible remember don't mention cash up front and now you know why still got a question we'll just put it down below I'm Kevin hunter until next time take care [Music] [Music]

Channel: Kevin Hunter

Views: 2,285,910

Rating: 4.9280539 out of 5

Keywords: Auto, Expert, Buying, Shopping, Sales, Advice, Reviews, Prices, Vehicle, Loan, Loans, Payment, Qualify, Monthly, Shop, Mechanic, Automobile, Automotive, News, how, to, Dealership, Dealerships, Car, Dealer, Finance, Chris, Fix, Chevy, Dude, John, Cadogan, paying, cash, i'm, don't, say, scotty, kilmer, Dave, Ramsey, Financial, Peace, University, white, board, finance, personal, investment

Id: 0S9cQOPxzfg

Length: 16min 16sec (976 seconds)

Published: Wed Jun 03 2020