Quote:
Originally Posted by Villagevip
Never say Im'a cash buyer...Go in with the lowest acceptable down payment, and lowest acceptable monthlies..Annual precent Rate(APR), monthlies very high for six years, but not important..For the banks to buy this deal, car has to be heavily discounted.. Dealers expect to profit on the back end..Make one, or two payments (if required)..Then cash out, for a great deal... : )
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Other than your statement the car "has to be heavily discounted", you're reasonably accurate.
Because of current market conditions, dealers are counting on the "back end" to provide additional profits. This "profit" is usually close to 75% of the profit from Dealer Cost to Retail Sales price. In other words, the Dealer may double his anticipated profit, if he provides the financing.
All that said, banks do put some limit on the amount they will finance, but it's usually higher than MSRP, depending on a person's credit.
The caveat, is some Retail Installment Contracts have a pre-payment penalty. I'm not sure if Florida allows pre-payment penalties.