New car purchase negotiations - Has anyone manage to haggle a decent chunk off the RRP?

Forums › Transport (cars, bikes and boats) › New car purchase negotiations - Has anyone manage to haggle a decent chunk off the RRP?

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Handle9

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#2647233 4-Feb-2021 17:00

BlinkyBill:

mudguard:
... They can't offer two prices depending on how you pay. You are perfectly entitled to negotiate a low price for cash then turn around and say actually I'll take the interest free deal at that price.

Of course they can. If you are negotiating on the basis of cash, then you aren’t negotiating on the basis of interest-free (a.k.a. 0% interest). You can try and take the cash price on 0% interest you are changing the basis for negotiation. Good luck, it might work or it might not.

If the car yard offers a lower price for cash than "interest free" finance they are breaching the fair trading act - if there is a lower price for cash then finance isn't interest free, it has a hidden interest rate. There were some commerce commission prosecution of the usual appliance store suspects many years ago because of this practice.

mattwnz

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#2647261 4-Feb-2021 18:22

If someone is interest free, then who is paying for that interest? Must be coming from somewhere, because people don't lend money, and then expect to get no return back.

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#2647263 4-Feb-2021 18:26

mattwnz:

If someone is interest free, then who is paying for that interest? Must be coming from somewhere, because people don't lend money, and then expect to get no return back.

It's built into the price of course. In reality there is no such thing as interest free finance. It's a marketing ploy.

That doesn't mean you can legally offer "interest free" finance and then offer a lower price for cash. If there is a lower price for cash then the finance isn't interest free.

mudguard

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#2647311 4-Feb-2021 18:44

mattwnz:

If someone is interest free, then who is paying for that interest? Must be coming from somewhere, because people don't lend money, and then expect to get no return back.

The finance company charge interest free rates to the dealer.

So if the dealer wants to offer a car for $30,000 interest free over three years, the finance company will so, ok, three years interest free, we'll charge you 20%.

So customer signs the deal for $30,000 and gets interest free for three years. The day the finance company gets the paperwork, they pay the car yard $24,000.

So yes, interest free is not actually free.

But as a customer if they are offering interest free on that vehicle and you say, oh I'll give you $26,000 in cash and they agree, you are perfectly entitled to take that price and put it on the interest free terms. It will be a mistake a salesperson will only ever make once. You cannot charge a different price for cash or interest free finance.

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#2647447 4-Feb-2021 19:18

Call me old fashioned, but it's a sad indictment on current society to read posters who are happy to deliberately mislead someone else by purposely negotiating on a false basis. In short, you are happily posting that you are someone who can't be trusted at their word.

mudguard

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#2647546 4-Feb-2021 20:07

dafman: Call me old fashioned, but it's a sad indictment on current society to read posters who are happy to deliberately mislead someone else by purposely negotiating on a false basis. In short, you are happily posting that you are someone who can't be trusted at their word.

I'm not sure if you're referring to me. But you cannot offer something for two different prices depending on the payment method. It's that simple. If the cash price is lower, then the offer isn't interest free.

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#2647550 4-Feb-2021 20:12

mudguard:

But you cannot offer something for two different prices depending on the payment method. It's that simple. If the cash price is lower, then the offer isn't interest free.

Credit cards being an exception.

But is it possible to negotiate freebies instead of a cash discount after the interest free price is set?

mudguard

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#2647554 4-Feb-2021 20:15

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Credit cards being an exception.

But is it possible to negotiate freebies instead of a cash discount after the interest free price is set?

Arguably that is more transparent. You're paying for a service to the credit company.

You could negotiate all kinds of things into the price, service, tow bar etc. My last car purchase was with Toyota, and the price was the price. Servicing extra, towbar, rubber boot mat, fire extinguisher. All extras that I paid for.

Handle9

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#2647997 5-Feb-2021 00:08

logo:

mudguard:

But you cannot offer something for two different prices depending on the payment method. It's that simple. If the cash price is lower, then the offer isn't interest free.

Credit cards being an exception.

But is it possible to negotiate freebies instead of a cash discount after the interest free price is set?

There's no exception for credit cards.

You can have two different prices for different payment methods, that's totally fine if you say it costs x if you pay cash or x+y% if you pay by credit card.

What you can't do is say that something is "free" but then charge for it. Interest free means the cost for finance is the same as for cash.

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#2647998 5-Feb-2021 00:09

dafman: Call me old fashioned, but it's a sad indictment on current society to read posters who are happy to deliberately mislead someone else by purposely negotiating on a false basis. In short, you are happily posting that you are someone who can't be trusted at their word.

Call me old fashioned but businesses following the law is important. Your post is misguided at best.

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#2648014 5-Feb-2021 08:46

Handle9:

dafman: Call me old fashioned, but it's a sad indictment on current society to read posters who are happy to deliberately mislead someone else by purposely negotiating on a false basis. In short, you are happily posting that you are someone who can't be trusted at their word.

Call me old fashioned but businesses following the law is important. Your post is misguided at best.

Not misguided at all. My post had nothing to do with businesses following the law. I was commenting about character and integrity when dealing with others.

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#2648045 5-Feb-2021 10:04

Handle9:

mudguard:
‘... They can't offer two prices depending on how you pay. You are perfectly entitled to negotiate a low price for cash then turn around and say actually I'll take the interest free deal at that price.”

Blinkybill “Of course they can. If you are negotiating on the basis of cash, then you aren’t negotiating on the basis of interest-free (a.k.a. 0% interest). You can try and take the cash price on 0% interest you are changing the basis for negotiation. Good luck, it might work or it might not.”

Handle9 “If the car yard offers a lower price for cash than "interest free" finance they are breaching the fair trading act - if there is a lower price for cash then finance isn't interest free, it has a hidden interest rate. There were some commerce commission prosecution of the usual appliance store suspects many years ago because of this practice.”

It’s hard to see how the Fair Trading Act applies to normal new car purchase negotiations. The Fair Trading Act, as a generalisation, prevents unfair or predatory practices. I’m pretty sure that as long as the terms and conditions are clear a dealer can sell a car for anything they want. This comment, obviously, doesn’t apply to dodgy second-hand dealers. It’s a bit silly to conflate sale of toasters with that of new cars.

Most car companies offer deals with t’s-and-c’s but they can also sell the car on another basis if they want to, corporate agreements not to do so notwithstanding. Most people understand that finance deals aren’t the same as cash deals.

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#2648259 5-Feb-2021 16:54

BlinkyBill:
Handle9:

mudguard:
‘... They can't offer two prices depending on how you pay. You are perfectly entitled to negotiate a low price for cash then turn around and say actually I'll take the interest free deal at that price.”

Blinkybill “Of course they can. If you are negotiating on the basis of cash, then you aren’t negotiating on the basis of interest-free (a.k.a. 0% interest). You can try and take the cash price on 0% interest you are changing the basis for negotiation. Good luck, it might work or it might not.”

Handle9 “If the car yard offers a lower price for cash than "interest free" finance they are breaching the fair trading act - if there is a lower price for cash then finance isn't interest free, it has a hidden interest rate. There were some commerce commission prosecution of the usual appliance store suspects many years ago because of this practice.”

It’s hard to see how the Fair Trading Act applies to normal new car purchase negotiations. The Fair Trading Act, as a generalisation, prevents unfair or predatory practices. I’m pretty sure that as long as the terms and conditions are clear a dealer can sell a car for anything they want. This comment, obviously, doesn’t apply to dodgy second-hand dealers. It’s a bit silly to conflate sale of toasters with that of new cars.

Most car companies offer deals with t’s-and-c’s but they can also sell the car on another basis if they want to, corporate agreements not to do so notwithstanding. Most people understand that finance deals aren’t the same as cash deals.

It is very very simple. The Fair Trading Act says you must not engage in misleading or deceptive practices. If you advertise interest free terms that means that you can either pay cash for the item or pay the same price on finance without interest.

If there is a different price for cash it is not intrrest free - there is an additional price, or interest, to pay. This is a misleading or deceptive business practice.

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#2648262 5-Feb-2021 17:01

From the commerce commission:

https://comcom.govt.nz/__data/assets/pdf_file/0023/65183/comcom-cccfactguideforthecreditindustry.pdf

You sell goods to a debtor under a credit sale contract. The cash price of the goods is $1,500 but the payments under the credit sale amount to $1,750. The difference between the cash price and the contract price is $250. This amount accrues over time but is not determined by applying a rate to the amount of credit. The $250 charge is not “interest” under the CCCF Act. In this case the charge is a credit fee and subject to the Act’s credit fee provisions. You risk breaching the Fair Trading Act 1986 if you tell the debtor in this situation that the credit sale is ‘interest-free’. The Commerce Commission considers the terms ‘interest-free’ and ‘free credit’ mean the same thing to consumers, and the ‘interest-free’ or ‘free credit’ price should be the same as the cash price.

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