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Too many people are buying cars using financial products they do not understand

timharford.com

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Re: Too many people are buying cars using financial products they do not understand

#321

Post by kaybe »

Wh1zz wrote: post #305
kaybe wrote: post #154

Earlier quoted context omitted.

Buying anything above, say, 100€? Smile, say 'discount?' and they will through in something for free or give a few percent off. And that's before any kind of negotiation (unless you count asking nicely as negotiation). And I mean anything. I've done it in many places. Is there anywhere where that does not work?

can you expand on the "anything"? I'm having doubts that I can negotiate the price of eg. a TV bought in a hypermarket (Walmart, to give a US example) ?

Hm, I haven't tried that yet, but I think it is possible. It usually works very well in specialized and non-chain stores. If you cannot find a salesperson with any decision power it might be harder.

You can try asking the next time you buy something big. The worst that can happen is them saying no, if you really asked nicely.

PS: I dented a rental car and got a huge bill. I called them up and basically said 'discount please?' They gave me a 20% discount, and that was without any kind of arguing or confrontational talk, just the question. So it's not just for stores.

Re: Too many people are buying cars using financial products they do not understand

#322

Post by taeric »

metaphor wrote: post #225
tanderson92 wrote: post #191

Earlier quoted context omitted.

I explained how they're not really taking a loss, since it increases their profits overall. Companies make these decisions frequently; a closely related concept is a loss leader.

Thanks to both you and taeric for keeping the exchange civil.

If you ever see me being uncivil, please call me on it! I consider it a safe assumption that I was mistaken on anything I'm not an expert on. And on those things, I think the odds might actually increase. :)

Re: Too many people are buying cars using financial products they do not understand

#323

Post by pmorici »

hammock wrote: post #309
pmorici wrote: post #265

Earlier quoted context omitted.

That's absolutely true. There are three main ways the dealer can make money on a deal. They are; New car price, Trade in value, and Financing terms. As a consumer you should always negotiate each of those items separately. What dealers like to do is move their profit between the three to make it look like they are negotiating when all they are doing is moving the bottom line costs from one line item to another. So fo…

This sounds like the old four-square sales strategy that actually works AGAINST the buyer.

Yes, what I describe above is how you counter that strategy.

Re: Too many people are buying cars using financial products they do not understand

#324

Post by bo1024 »

kerbalspacepro wrote: post #314
bo1024 wrote: post #114

Earlier quoted context omitted.

> The facilitators aren't fleecing them as much as just meeting their needs. That's a misleading statement, unless you replace "needs" with "wants".

I feel like the difference between "needs" and "wants" is an elementary distinction we make on a day-to-day basis. But when we're talking about firms and economics, the distinction does not exist except as labels for the amount of elasticity in demand something has.

...but, when we're talking about individual human beings, who may be misinformed and shortsighted, the distinction is pretty important.

Re: Too many people are buying cars using financial products they do not understand

#325

Post by viridian »

dwyerm wrote: post #312
wingspar wrote: post #173

Earlier quoted context omitted.

I did similar with our last Honda. Came to the end and I asked if they would want me to sign an arbitration agreement. Told them I would, but not for free. A lot of people died for my right to sue them in court. I asked for and received an accessory they sell for $180... They were confused...

Thank you for that... but I think you sold your rights too cheaply. I walked away for the right to cross out the entire arbitration clause. They were mystified that I would even read the stuff on the back of the contract, let alone have a concern with it. They were offering me thousands of dollars off, but wouldn't budge on the clause. I went to another dealer the next week that hadn't yet added that toxic language t…

Credit unions on the other hand, you'd have a much better time with.

Re: Too many people are buying cars using financial products they do not understand

#326

Post by HeyLaughingBoy »

rjsw wrote: post #138
endianswap wrote: post #20

Earlier quoted context omitted.

That seems insane that it'd be the biggest check they've seen. I've bought an 80k BMW and an 80k Jaguar outright, and they both shrugged at me paying by check. BMW let me use a personal check, Jaguar wanted a bank check (easy enough). Edit: A normal down payment for a luxury car of any brand can easily be 20k up front.

I paid for my current car with my debit card. I asked my bank beforehand whether they needed to authorize that size of transaction but was told that they can tell which accounts are for car dealers.

I wondered about that when I bought our last car. Near the end of the transaction I suddenly realized that I would need to pay a down payment and all I had was my bank card (ran out of paper checks years ago). They took it and ran it as a Visa card, no problem. Guess they get a break on the fees.

Re: Too many people are buying cars using financial products they do not understand

#327

Post by eru »

taeric wrote: post #318
eru wrote: post #317

Earlier quoted context omitted.

The problem is that you _seem_ to have a hard time grasping the very simple math involved.

What math has been presented?

https://news.ycombinator.com/item?id=14477777

Re: Too many people are buying cars using financial products they do not understand

#328

Post by taeric »

eru wrote: post #327
taeric wrote: post #318

Earlier quoted context omitted.

What math has been presented?

https://news.ycombinator.com/item?id=14477777

I fully ceded that point.

The question at this point was much more narrowly scoped and around how this is "closely related" to loss leaders. On that, no math was presented.

Re: Too many people are buying cars using financial products they do not understand

#329

Post by DannyBee »

coldtea wrote: post #250
DannyBee wrote: post #210

Earlier quoted context omitted.

"At the very least, they should be explicitly, and in common, everyday language, give something like: "The average buyer that used this financing option ended up paying X% above the base price". " All this does is increase the number of documents. Seriously. How do you think it got to be so many documents, where half are disclaimers and "plain english" warnings/etc for the consumer. They usually don't hide the actual…

> All this does is increase the number of documents. Perhaps you didn't get what I said. That information should be displayed (by law) with prominent letters as big as the base price, under any sign/ad/etc which shows the latter. Not to be buried in another document.

I got what you said. Apparently you missed mine, so let me try again, hopefully a little more clearly :)

You say the point is:

"That information should be displayed (by law) with prominent letters as big as the base price, under any sign/ad/etc which shows the latter."

I'm saying: It already is Along with everything else other people considered to be just as important to make sure everyone knew. :)

IE The thing you want, has already happened. You cannot find it, because not everyone agreed with you about what is the most important, so now you have 50 pages of the base price and the other important thing in big letters.

Re: Too many people are buying cars using financial products they do not understand

#330

Post by DannyBee »

posterboy wrote: post #263
DannyBee wrote: post #210

Earlier quoted context omitted.

"At the very least, they should be explicitly, and in common, everyday language, give something like: "The average buyer that used this financing option ended up paying X% above the base price". " All this does is increase the number of documents. Seriously. How do you think it got to be so many documents, where half are disclaimers and "plain english" warnings/etc for the consumer. They usually don't hide the actual…

You defend the leeching practices of financiers by the claim that the law already demands obvious hints in contracts, but consequently pretend that there was no obligation to educate. This is a contradiction. > but most people are going to blame you for not making yourself competent Shouldn't it go both ways? Businesses might be confident with your assertion and might rely on it to do business. But blame is the wrong…

"You defend the leeching practices of financiers by the claim that the law already demands obvious hints in contracts, but consequently pretend that there was no obligation to educate. This is a contradiction. "

As i mentioned elsewhere, the vast majority of states very explicitly require education as well!

". If you let someone sign a contract although you are sure they didn't read it, that's fraud.'

Actually, it's not by any definition of fraud. You have not intentionally deceived anyone of anything. It would only be fraud if you intentionally told them the wrong thing, or deliberately tried to get them to not read it, or something more than "knowing this person has not educated themselves". We don't have a lot of thoughtcrimes.

It may be a void contract, but it's definitely not fraud!

" Why do I get weird looks when I actually start reading a contract I am about to sign?"

I don't, so i'm not sure. In fact, in any real estate transaction i've ever been a part of, if i say "hey, do you mind if i take a few minutes to read this page more closely and ask you some questions about it", the answer i get is not "rolled eyes", it's "absolutely, that's what i'm here for"

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