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  1. Join Date
    Aug 2009
    Posts
    19
    #1
    (A re-post)
    Hello. Can you tell me why Financing buyers get a higher priority (re: discounts, unit acquisition, etc) as compared to Cash buyers?
    I know one reason, because in the long run, for financing, the buyer will be paying more of the intended price, and thus the incentives..
    I am also aware that value of money diminishes over time..

    I’ve been to a car dealer before and they give priority to In-house financing as compared to cash buyers, and it bothers me because I am planning to buy through cash. Please kindly enlighten me on this matter.

    Thanks

  2. Join Date
    Feb 2008
    Posts
    14,181
    #2
    Because they make more money on financing buyers via interest payment. They win, you (the buyer) lose because you end up paying as much as 30% more for the car when all is said and done. So P1M car becomes P1.3M as far as the car company and its finance arm is concerned.

    PAY CASH! Don't let their freebies trick you because those are just pinches of salt compared to the total money you will lose doing financing. If you want an in-demand model where dealers sleazily jump financing buyers in the line just wait it out or buy the competitors product. Never give in!

  3. Join Date
    Aug 2009
    Posts
    19
    #3
    Quote Originally Posted by tidus1203 View Post
    Because they make more money on financing buyers via interest payment. They win, you (the buyer) lose because you end up paying as much as 30% more for the car when all is said and done. So P1M car becomes P1.3M as far as the car company and its finance arm is concerned.

    PAY CASH! Don't let their freebies trick you because those are just pinches of salt compared to the total money you will lose doing financing. If you want an in-demand model where dealers sleazily jump financing buyers in the line just wait it out or buy the competitors product. Never give in!
    Yeah, since I (actually, with the help of my Dad) have the cash by the end of the year, I will probably push on buying through cash since I am not on the rush of acquiring a new car (borrowing dad's pickup atm ).. Still choosing on City or Jazz, but may look for other brands/newer models on the last quarter..
    Anyway, me thinks there will be less hassle for cash payment also..thanks for reinforcing the idea of disregarding those candy-coated conveniences
    Thanks a lot

  4. Join Date
    Apr 2008
    Posts
    15
    #4
    You want to know why? Because the dealership only earns Php 3,000.00 for every car that is being sold as cash.

    For good gesture, try to get the insurance at least from your SA. Just haggle the price a little bit, otherwise, you might encounter an SA who is not willing to sell you a car unless they are after the quota not the profit.

  5. Join Date
    Aug 2009
    Posts
    19
    #5
    Quote Originally Posted by hench7 View Post
    You want to know why? Because the dealership only earns Php 3,000.00 for every car that is being sold as cash.

    For good gesture, try to get the insurance at least from your SA. Just haggle the price a little bit, otherwise, you might encounter an SA who is not willing to sell you a car unless they are after the quota not the profit.
    3k/car? Is that gross or net income? If that's a fact, it is surprisingly low..
    I did some research and if that's the case, a honda dealership earns approx. 160k PhP per month..
    basis: http://www.gmanews.tv/story/166939/R...ightly-in-June

    Anyway, I'll take note of your advice. Thanks

  6. Join Date
    Oct 2005
    Posts
    177
    #6
    Quote Originally Posted by divisionbyzero View Post
    3k/car? Is that gross or net income? If that's a fact, it is surprisingly low..
    I did some research and if that's the case, a honda dealership earns approx. 160k PhP per month..
    basis: http://www.gmanews.tv/story/166939/R...ightly-in-June

    Anyway, I'll take note of your advice. Thanks

    3000 is probably the commission of the agent.

    I have a friend that works in the mitsubishi plant. they sell their cars to the dealers at 200k-300k less than the SRP.. thats why dealership stays upfloat even if they sell only 10 cars per month..thats 2M to 3M pesos !

  7. Join Date
    Feb 2008
    Posts
    14,181
    #7
    Yeah yung P3000 sa agent yun it can even go as low as P1000 depende sa model. Yung mga best selling cheap models mga P1000 lang kikitain nila doon...

  8. Join Date
    Aug 2009
    Posts
    19
    #8
    Oh.. I thought he meant the whole dealership itself.
    Well, if it's the commission of the agent, it's not bad at all.

    Thanks for answering. We're kinda getting off-topic though.
    (topic was answered anyway)

Buying a Car: Financing Vs. Cash