Why do dealers want us to put money down?
 

I spoke to many dealerships and they say, it's better to put more money down so your monthly payments will be lower.

That's understood, but why do they always ask me about how much to put down? Wouldn't they be getting the same amount at the end anyways?

Why do they push for more money down?

Faster money for them?
 

Maybe they like money down because that means they get there share of the money faster? If you finance the whole car, it may take awhile for them to get their check. Im not sure if this is correct. Also, MAKE SURE you agree on the price of the vechicle, then the price on your trade-in if you have one. Then worry about how much you are putting down during the financing part of the deal. If you tell them how much you are putting down, then it may affect the overall price, if you arent careful. Dealers are very very very very very sneaky. Thats why I went to autobytel.com to purchase my car. :)

Dealers aren't out to get you (usually) Most dealerships make most of there money from the service departmetn instead of cars. THink of it. Most dealerships buy the cars at invoice and then sell just a thousand or two above it. but over the life of your car (or if you have to make a major repair) they can reap a lot more money out of you. Dealer's usually would rather you make a large down payment instead of trading in a vehicle becuase they are gettting stuck with an unknown instead of cash. (that's why you usually don't get diddly squat for trade ins.) Putting a large amount of cash eventually helps you out though. You can save thousands instead of having to pay financing fees which most dealer's don't ever see, as they usually go through there company's financing or a local bank. To top it off if you're buying a used car, be careful. Usually these are the cars that the dealer can make the most money off or (also the salesman) and this depends on how much the car is selling for vs how much they have stuck into it. Usually its a good idea to see how much that particular car is getting traded in at vs its bluebook value and you'll see how much they making off of it (usually) I know that my dad (who is a Ford salesman) only makes like 25 or 50 dollars off new cars and a % of what the take is on a used one.
To end this long rant, my advice is to put as much money down as you possibly can without hurting you're pocket book or killing you're financing rate (sometimes if you're loan is too low it can drive up the rate) You'll get much lower payments ($10 less per 500 put down) and you'll pay a lot less in financing. (except of course you've gotten 0%)

They will need that down payment info for financing...if you finance 60% of the vehicle purchase, you are a lower credit risk than someone who finances 90%.

Put at least 20% down if you can...even if the finance rate is 0%. Total the car the day you hit 500 miles and your insurance may only pay the used market value of the car leaving you in the hole a few grand to the bank...or if you have to sell the car for unforeseen reasons within a year or so you may be upside-down on the loan.

Also...most dealers have a max you can use a credit card...usually $3k or $5k. You can get interest free cards, but remember, that's only a year or so.

Never put a hold down payment (the $1k or less...$500 should be fine...to hold the car until you get your financing and paperwork signed or to hold a car on order) on a car with cash. Always use a credit card as you can dispute the charge if they bait and switch you. Use cash and you may never see it again. :crying:

--Dean