Originally Posted by
AirBear
I pulled out the checkbook and said we didn't need to finance. Should have seen the look on his face, then he had to make a quick trip to see the sales manager. I got the feeling had they known we were paying cash we wouldn't have gotten as good a price..
There was a WSJ piece a few months ago about this. The bottom line is that the dealerships make more money on the financing than on the actual sale, which is often only a few hundred dollars. And they don't just make it on their internal financing, apparently kickbacks from local banks and credit unions are common.
I have worked with a local VW dealership for years. Small, no advertising, relies on repeat customers. Anyway, the GM told me upfront that he could take another $500 off if we financed it. So we did, and paid it off 2 months later.
It is even worse if you try to shop the higher end cars. BMW/Auid/Volvo do not seem to want cash customers at all. Cash buyers do not support the lease/CPO system where they sell the same car twice, get the financing incentives and have the buyers tied to the dealership.