(Update) Can a dealer only allow me finance or lease a Bronco?

[350vudu]

But your loan payment would be $600-$800 a month with no down depending on term. Thats $7200-$9600 per year in payments. Minus the 6% interest you made, that's still -$5000 or so on the year as opposed to paying cash up front.

Where is the good idea you mentioned?

The math here isn’t entirely correct. The loan payment also pays the principal. The fair comparison would be how much of that loan payment is interest in that year vs. the supposed 6% yearly return on the money invested.

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[nev]

If it’s a choice of you not getting a bronco unless you finance with them but I would finance with them. Then pay it off with the finance company in the first 30 days. Assuming that there’s no early payment penalty.

I believe if it’s paid off right away the dealer does not get the kickback from the finance company.

my caddy dealer said the same thing when i put an order in in in May of 2021 and they are only charging msrp. i too will finance it then pay off witin 30 days ,

 

[5.0Maverick]

While getting charged the 3% on the loan you’d be earning 6% on the investment. So paying it off only saves you the 3% but rolling the cost of the car (principle) into whatever investment you choose, that earns you the 3% over the cost of the loan in the first place.

 

[MileHighCitizen]

The math here isn’t entirely correct. The loan payment also pays the principal. The fair comparison would be how much of that loan payment is interest in that year vs. the supposed 6% yearly return on the money invested.

If you have $50k in cash and you buy the Bronco outright, you pay $0 and make $0 each year.

If you have $50k in cash and you BORROW a separate $50k; you owe monthly payments on the loan and earn interest on your cash you invested. If you don't make MORE in interest than you PAY each month on the loan you took out, you are losing money each year.


No investment will pay you more on interest than you will owe in monthly payments on an auto loan for the same amount, $50k in this case.


What is wrong with my math?

 

[sniffHound]

Sign the deal and make sure you can pay it off after three payments.
Solved

I would like to pay full at picking up but dealer told me they can only finance or lease it. Says it’s dealer policy. Is that something that a dealer can do?

 

[Headsong]

If you have $50k in cash and you buy the Bronco outright, you pay $0 and make $0 each year.

If you have $50k in cash and you BORROW a separate $50k; you owe monthly payments on the loan and earn interest on your cash you invested. If you don't make MORE in interest than you PAY each month on the loan you took out, you are losing money each year.


No investment will pay you more on interest than you will owe in monthly payments on an auto loan for the same amount, $50k in this case.


What is wrong with my math?

You're comparing interest income against interest and principal payment.

 

[MileHighCitizen]

You're comparing interest income against interest and principal payment.

What else is there to compare? I really dont what im missing? Not being a troll or anything, i really dont understand what you mean.

I have actual cash saved for my Bronco. Why would I borrow money from the bank that I have to repay every month, just because I make a little money on interest with my investment? That is still a net loss of a few thousand dollars per year.

If I buy the Bronco outright; I don't make any payment, and I break even at $0 payments and $0 income. What am I missing?

 

[mountainbronco]

The U.S. $ is legal tender, for all debts, public or private.

 

[PDiddy]

They want people to finance because they can add in all the additional fees, with the finance manager. It’s much harder for a dealer to add in cilajet, lowjack, GAP insurance, extended warranties, and all the other crap when you pay cash. Even if I was paying cash for a vehicle, I wouldn’t even mention it to a dealer until we agreed on the vehicle price. They are less likely to negotiate a lower price if they know your paying cash.

It’s a lot easier for a buyer to say no to all the fees when they are paying for it all up front. When it’s blended into the monthly payment, it’s an easier pill to for people swallow.

Just finance it and pay it off. Have fun! I hate dealing finance managers. They suck the fun out of buying cars.

 

[jaeggernaut]

They do it to help prevent you from flipping it. My dealer wants me to do that too but I don't even have my bronco yet (4 months at the dealer with a recalled airbag ). But when it comes to it, I'm going to pay however I want to pay.

I would like to pay full at picking up but dealer told me they can only finance or lease it. Says it’s dealer policy. Is that something that a dealer can do?

 

[M Redwood]

My dealer offered 1000 rebate if I made 6 payments before paying off....so I made huge 1st payment 18k then 5 more at stated rate and interest they got was like 400 and I kept 600 .... so if they require a few payments before payoff make the 1st payment for the total minus the amount t needed for additional payments to close out...

Edit also make 1st huge payment asap..not on due date

 

[GETSCHWIFTY]

You mean they don’t accept cash? That’s insane. Establish the loan and then pay the entire thing off at the time the first payment is due

 

[jcgcbns22]

I would like to pay full at picking up but dealer told me they can only finance or lease it. Says it’s dealer policy. Is that something that a dealer can do?

They are trying to make it harder to resell. A lot of Cdn inventory is resold into the US. I had to sign a non expiry agreement to get my Bronco in January. ( cash deal).

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