Cash for Clunkers and ability to negotiate.

Cjanik

Im worried about that too,

a lot of people planned on buying a car on spread out dates throughout the year or two. Now because of this clunker deal, they acted fast and early to get the most for their money.

now whats going to happen to all of the sales for the next year or two now that a big lump of the buyers already purchased inside of this 1-2 month period.

oh boy oh boy, more layoffs? huge drop in sales = companies going bankrupt?

MeetJoeAsian

With $3500/$4500 initial investment into a new vehicle, if someone defaults on the loan, the risk is minimal to the banks. Just because there is a big rebate for a new car doesn't make it that easy for ANYONE to just get a loan. Subprime lenders are still REQUIRING down payment in the form of CASH OUT OF POCKET in addition to any sort of rebate offered by dealership/government. However, if even with the strict guidelines banks are imposing these days, should someone defaults on the loan, then chances are, the vehicle should be in or close to equity position because of the initial $3500/$4500 deduction. You can't just go out and buy ANY new car, the new car has to follow the federal program guideline, and those cars are generally NOT that high a dollar.

tbonesteak

Wow, Joe and Fusz you guys are great. It's always great to have honest dealerships that participate in the forums. I've taken nothing but tons of useful info from you guys. Thank you. Ok, back on topic. I currently have an 07 sl550, 09 z, and a ford bronco from like the 80s. I'm hoping to pick up a 2010 rx350. The reason why i initially asked the question was because 2 salespeople that i've spoken to this weekend told me that utilizing CARS has a big impact on ability to negotiate the selling price. I didn't know about the demand that has been created for new cars via this program. I guess i'll start calling and telling the dealerships everything up front and see where i can go from there. My goal is 1000 above invoice. Do you guys think that's possible with the Cash for clunkers program? Thanks again.

MeetJoeAsian

Unless the dealership is paying someone some mad money to handle the clunker program, it shouldn't impact the selling price. At our dealership, we have 2 guys who are assigned to handle all reimbursements with the government. They are paid a small flat fee, but the fee is so minimal that it doesn't affect the profit of the deal.

The only reason how I can see that this program will affect final negotiated price is that the dealership you're going to is a small dealership where they don't have the money to front the clunker deals (since the government is REALLY SLOW PAYING us back) until they are reimbursed, or they fear not getting paid because of their past shady practices.

There is a LOT of paperwork for the dealership to process the rebate and get their reimbursement. And we are SLOWLY getting funded. Our 2 guys who handle the reimbursement stayed at the dealership to 4AM a few times just to get their paperwork processed and try to get as much of them billed as possible, and we're still not getting funded...

As far as what you're trying to accomplish, paying $1000 over invoice, that all depends on the dealership you're going to. If a few dealerships tell you they're not discounting, I would believe the popular consensus. And remember what I said above, the longer you wait, the fewer selections you will have.

tbonesteak

The world is not coming to an end. Cars are not like homes.

tbonesteak

ah.....i see. Thanks Joe. If you dont mind me asking, what dealership are you from?

MeetJoeAsian

I'm at Joe Myers Toyota in Houston, TX

fuct

thanks Joe!

CrownR426

My dealership sold like 17 cars last night lmao!
They said this program has helped them make the benji's!

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FuszNissan

I call it that becuase it has boosted the auto industries retail sales numbers. But it has been a nightmare with the website crashing, running out of money in 3 days, time consuming paper work, bs rules, and no one is getting paid. But the program did sell cars, just with fake money, and I don't see the problem, they have been printing fake money for sometime. Why not print some more for the dealers that are waiting paitently and have done everything they have asked of us.

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