I saw that. Considering we just sold off my 2010, that would be a negative. She wants the sonata. I even tried her on the Optima (same car) but it's missing storage the Sonata has. as much as I loved that car, quiet and comfortable long term were not it's forte.... hehe puns.
Money is in the financing.
I worked as a credit manager at a mom n' pop furniture store years ago.
Our down payment requirement was the store's cost for the furniture.
Then the store made profit on the mark up and the built in interest.
Vehicles have a lot less mark up than furniture but the finance money is where its at.
This should clarify why they're not looking for cash.
The0retical wrote: This should clarify why they're not looking for cash. Last Week Tonight
Beat me to the punch, was going to post just that...
Toyman01 wrote:wearymicrobe wrote:This. I sold a truck to a buy here pay here lot once. It was a $1500 truck, that he gave me $1500 for. He said he would clean it up to sell, collect a $1500 deposit plus 3-5 payments of $350. Then he would have to repo it for non-payment, clean it up, sell it again, collecting the same deposit and payments from the next sucker. Wash, rinse, repeat, until it was totaled, gone, actually paid for, or junked. I honestly don't think he actually wanted to sell the car. Just rent them long enough to collect a few payments and repo it, because after the first deposit, everything was pretty much profit. And if someone actually paid off the car, he'd have to buy another one.Streetwiseguy wrote: No trade in? No profit. No financing? No kickback. Cash deal? No way to make the number. berkeley off.Seriously the market has been going buy here pay here for the last 5-8 years. I know a seller locally that has sold the same damn A4 five times over and collected the deposit and a few months payments from each buyer before repossession. Buy the car from a PP that is your answer.
I am confused as to how these BHPH places work. I mean, I think I get the basic premise - people who don't have the cash or credit to buy a car otherwise are kind of stuck, so you get to gouge the E36 M3 out of them. But if you're charging basically what the car is worth as a down payment, then $350/month on top of that, what the hell is the length of the loan?!?!
Doing some quick and dirty math, even if you're valuing the vehicle at double that and charging 25% interest on a 12 month term, you're not even to half of that $350/month! So are the loan terms super short, is the interest rate REALLY insanely high, or are people just that stupid that they think it's worth several times what it is? If you can afford that down payment, why not just buy the $1500 truck for $1500 outright? Plenty of Craigslist hoopties.
Usually the loan terms are short, 4-6 months. Then they take that $350/ month payment and make it biweekly so it's only $175 and due the day after payday, in cash.
The length of the "loan" is determined by how much they can get you to pay every other week. There is no actual finance company and probably no actual interest, just the guy that owns the lot and however much he thinks his mark is good for.
It's not a smart way to buy a car, but it happens every day, at every crappy little corner car lot, in just about every town.
Toyman hit it on the head, there are no financial companies involved in these transactions. It's usually a what can you afford to pay me every 2 weeks scenario? And if you can't pay, they take the car back. Most car buyers these days are naive or desperate, when you wave a set of keys in front of their face they'll usually bite. I work with independent dealers across the country everyday for my job, some are great and really try to do the right thing but most are trying to make a dollar any way that they can.
What pisses me off right now are all the "under cover" BHPH lots that pose as PP on craigslist and faceplace. It's damn near impossible to shop for a decent sub-$5000 minivan without being hustled by some of these filthy snakes. One of them was so convincing he got me all the way to his house, but gave it away after he started talking financing, taxes, and fees since he "technically is a dealer, but don't worry about that". I almost clocked him right there for wasting my time.
On the way to my daughters school there are six small lots that weren't there a year ago. The BHPH thing pretty much explains why that's happened. 
Predatory loans. One of the few growth industries left in the good ole US of A. Taking advantage of the poor and stupid isn't very nice.
At the end of the day, I blame parents for not teaching kids that the world isn't all sweetness and light. There is always someone out to get you. From the crappy little car lot, to the bureaucrat behind the desk.
Parents, teach your kids to look out for themselves. Nobody can do it better than they can.
This is not a question of sweetness and light. This is a question of them servicing a part of the population that has no other option. IE most do not even have checking accounts as they cannot meet the requirements. Or they have judgement that would have those assets seized if they did. Are the sellers and lots predatory absolutely, are they illegal no. But people with no credit choose to do business with them. nobody goes into this with their eyes closed. They are paying through the nose on these things because a normal bank does not or will not trust them for very good and well documented reasons.
This is not like small local towns dropping huge fees on people who have tickets and getting them into some terrible cycle of debt for a small offense. They have real power over peoples lives. People openly walk into these dealers and know the score they have been on the receiving end of getting shafted most of there life.
Just as slimy as PayDay loan gigs, just with cars. Preying on the desperate.
In reply to wearymicrobe:
I disagree that every customer knows the score with the BHPH lots. If they all did, some of them would have taken their cash and bought a vehicle from a private party. Although, I think there are some exaggerations here. I doubt every car on every lot is really bringing in a deposit that covers the dealer's full cost. I think people are getting newer, better cars from these lots than they could afford to buy outright from a private party. It doesn't mean they aren't getting ripped off on the total price of the car, but it isn't quite as bad as some of these stories make it sound.
In reply to WilD:
I'll have to shoot a picture of the lot the next time I drive by. He has the "down payment" posted on every car.
WilD wrote: In reply to wearymicrobe: I disagree that every customer knows the score with the BHPH lots. If they all did, some of them would have taken their cash and bought a vehicle from a private party. Although, I think there are some exaggerations here. I doubt every car on every lot is really bringing in a deposit that covers the dealer's full cost. I think people are getting newer, better cars from these lots than they could afford to buy outright from a private party. It doesn't mean they aren't getting ripped off on the total price of the car, but it isn't quite as bad as some of these stories make it sound.
You are right about 15-20% down. One of the things with holding your own loan paper is that you need to have a bigger down so you can get more inventory. There are some better dealers out there that actually explain all of this to clients and are not terrible on interest. But they all hide GPS in the car for recovery or do automatic locks on the ignition if people don't pay on time.
These are established and mature business practices they know what they are doing.
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