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Comment by evilDagmar | Hacker News Reader

I was under the impression that the whole point of auto-financing was to get even even more money out of the consumer. When I bought my last car, I just bought it outright (because it wasn't particularly expensive) which appeared to baffle the dealership. I was actually a little concerned that the dealership told me it was the largest check they'd ever seen (for ~$14k).

Getting people to sign off on a contract they don't really understand is a great way to get more money out of the consumer than they'd otherwise spend.

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Same thing here in Norway. When I bought my last car, I negotiated the price down quite a bit and got upgrades/winter tires etc for the same price.

When all was said and done and he asked how I wanted to finance it, I pulled out my direct debit and he went pale.

I had to argue for another half an hour to keep all the negotiated stuff while paying for it outright, it was silly.

I doubt it was silly. He likely offered you a deal that would have lost money if not for the financing.

That's exactly why it was silly.

Call me old fashion, but I think car salesmen ought to make their money off of selling cars instead of exploiting consumer's ignorance of financial tools and more complex math. This is so much more nefarious.

When I've bought mortgages, I was required by law to sign a document that says "I have read and understood these loan documents." I've seen many people in the newspaper complaining that they neither read nor understood the terms.

At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing?

No non-lawyer is competent to understand all real estate transaction documents. But they might be competent enough to acquiesce to the grand stupidity of our culture [1] and hire a real estate attorney. Mine reviewed all the relevant documents and come to the closing, for a flat fee that I thought was rather reasonable, in particular compared to the hand cramp I got from all the ridiculous paper work I had to hand sign.

[1] Consider: the banks, the title company, the county, all want hand signed documents. But we accept computerized voting machines to manage elections.

> No non-lawyer is competent to understand all real estate transaction documents.

I understood them well enough. It isn't that hard. The misunderstandings people would complain about were not about subtleties or legal hare-splitting. It's also established legal doctrine that a contract written in ambiguous, confusing, or tricky language isn't going to hold up in court. Judges take a dim view of that.

I also actually read them. Amazing. Although this would visibly annoy the escrow officer.

You did the right thing by having a lawyer review it if you didn't feel confident about it. There's no excuse not to if it is a large transaction.

A house is, for most people, a very large transaction. Saying "it isn't that hard" considering attorney's specialize in real estate is like saying "reading x-rays isn't that hard".

Had I not had an attorney present, it would have taken me all day, instead of 4 hours of reading stuff. It wasn't a matter of confidence in myself, it was a matter of having less than 100% trust in everyone else present.

I should add that it isn't hard for ordinary real estate transactions, as the contracts are pretty standard boilerplate. If there's anything unusual about it, such as easements, water rights, unclear borders, weird covenants, by all means get a lawyer involves. If you're at all uncomfortable or confused by the deal, get a lawyer. Don't wing it and then blame the other party.

If you're buying an $800,000 house, often the most important investment in a person's life, spending a day reviewing the deal is a trivial incremental investment.

" Saying "it isn't that hard" considering attorney's specialize in real estate"

Attorneys specialize in everything, the fact that attorneys specialize in real estate does not make every real estate transaction difficult, or require an attorney.

There are attorneys who specialize in speeding tickets. That does not make understanding the laws around speed limits difficult. If just means it's an area where attorneys believe they can make money by building a niche. That is not a measure of the complexity of that area, but of a large number of factors. (same with DUI)

In fact, attorneys specialize in real estate to handle the complicated things, which are not closings. So your point kind of goes against this argument you keep trying to make.

I'm also not at all sure what your analogy to x-rays is supposed to be proving. It seems very strange

x-rays have no context and to people not familiar with at least anatomy and a number of other things, and are subject to different opinions.

On the contrary, real estate contracts, which are usually boilerplate plain english, only require understanding english. They may take a while to read, but they don't require specialized training. They are generally not subject to different interpretations, that's precisely why they are written the way they are!

There is no equivalent for x-rays that could make laypeople competent.

"No non-lawyer is competent to understand all real estate transaction documents."

This is bullshit, they are not complicated legalese. Additionally, the vast majority of states require someone who can explain the documents to you be there at the closing.

Some require they even be lawyers. Even those that don't, have provision on what must happen. For example, in California, whoever is doing the closing will stop on each document, explain what the document is and what it says, and ask you if you have any questions, before proceeding to the next one.

I don't believe, when that happens, one can reasonably complain they didn't have a chance to understand the documents.

>At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing?

At no point. I don't even consider it a matter of "responsibility". You can only take responsibility when things are clearly laid out. But what about the even more important responsibility to CLEARLY lay things out that should fall into businesses?

What I do expect and find important, and should be legally binding, is that no business should be allowed to hide the actual impact of purchases behind legalese and long-winded "financial product" descriptions, and then put the blame on the customer for not "reading through it".

At the very least, they should be explicitly, and in common, everyday language, give something like: "The average buyer that used this financing option ended up paying X% above the base price".

> What I do expect and find important, and should be legally binding, is that no business should be allowed to hide the actual impact of purchases behind legalese and long-winded "financial product" descriptions, and then put the blame on the customer for not "reading through it".

And in general, as I pointed out here, such contracts tend to be invalid in court. However, signing a piece of paper in plain english certifying saying "I read it" when one did not ought to mean something.

A legal doctrine where one can not bother reading contracts and yet get them decided in favor of ones imaginary terms doesn't sound like a workable system. The whole point of written contracts is so there's a record of what the terms were and what was agreed upon.

> A legal doctrine where one can not bother reading contracts and yet get them decided in favor of ones imaginary terms doesn't sound like a workable system.

Having to agree to dozens of pages of contract every day just to do seemingly ordinary things like using websites or ordering stuff online doesn't sound like a workable system either.

>However, signing a piece of paper in plain english certifying saying "I read it" when one did not ought to mean something.

If that was the case, EULA also should "mean something".

That was what my car loan paperwork did. It had a table with the negotiated price, the APR, the interest over the term of the loan, and the total price.

I expect this is legally mandated, and the question I have is which states are preferring to let the dealers prey on people?

"At the very least, they should be explicitly, and in common, everyday language, give something like: "The average buyer that used this financing option ended up paying X% above the base price". " All this does is increase the number of documents.

Seriously. How do you think it got to be so many documents, where half are disclaimers and "plain english" warnings/etc for the consumer.

They usually don't hide the actual impact.

In the three states i've bought houses, there is at least one page in the set that literally says "you are taking out a loan for $x your interest rate is x% after 30 years, you will have paid $x for this loan"

Similar things happen for auto financing. What more do you want?

Also note that no amount of plain english is going to make complicated things both simple to understand and correct in all the details. That's in fact, exactly why they are complicated. Most loan documents are pretty plain english these days, so it's usually not overuse of legalese either.

(plus, what makes it easy for you to understand may not be the same as for others).

One does not get to say it's everyone else's job to make you competent.

If you go and implement PaxOS and screw it up, you are welcome to try to blame Lamport for writing impenetrable papers, but most people are going to blame you for not making yourself competent.

>All this does is increase the number of documents.

Perhaps you didn't get what I said.

That information should be displayed (by law) with prominent letters as big as the base price, under any sign/ad/etc which shows the latter.

Not to be buried in another document.

How can a person making an ad know how long a buyer's loan term will be or what interest rate they will qualify for? How would you know the value of any potential trade ins?

The same way they know the price -- which can also change.

They note the currently (and for the mid-term future) values.

It's 2017, it's not like ads are written in stone and can't be altered when the facts change.

Things like the interest rate you qualify for are unique to the buyer. How can a print ad in the newspaper know the interest rate the buyer will qualify for? How can a print ad in a newspaper know what the purchaser of a car is going to trade in? There's not even a customer yet.

I got what you said. Apparently you missed mine, so let me try again, hopefully a little more clearly :)

You say the point is:

"That information should be displayed (by law) with prominent letters as big as the base price, under any sign/ad/etc which shows the latter."

I'm saying: It already is Along with everything else other people considered to be just as important to make sure everyone knew. :)

IE The thing you want, has already happened. You cannot find it, because not everyone agreed with you about what is the most important, so now you have 50 pages of the base price and the other important thing in big letters.

You defend the leeching practices of financiers by the claim that the law already demands obvious hints in contracts, but consequently pretend that there was no obligation to educate. This is a contradiction.

> but most people are going to blame you for not making yourself competent

Shouldn't it go both ways? Businesses might be confident with your assertion and might rely on it to do business. But blame is the wrong attitude if you go in holding that opinion it's fraud. If you let someone sign a contract although you are sure they didn't read it, that's fraud. Simple as that. Why do I get weird looks when I actually start reading a contract I am about to sign?

"You defend the leeching practices of financiers by the claim that the law already demands obvious hints in contracts, but consequently pretend that there was no obligation to educate. This is a contradiction. "

As i mentioned elsewhere, the vast majority of states very explicitly require education as well!

". If you let someone sign a contract although you are sure they didn't read it, that's fraud.'

Actually, it's not by any definition of fraud. You have not intentionally deceived anyone of anything. It would only be fraud if you intentionally told them the wrong thing, or deliberately tried to get them to not read it, or something more than "knowing this person has not educated themselves". We don't have a lot of thoughtcrimes.

It may be a void contract, but it's definitely not fraud!

" Why do I get weird looks when I actually start reading a contract I am about to sign?"

I don't, so i'm not sure. In fact, in any real estate transaction i've ever been a part of, if i say "hey, do you mind if i take a few minutes to read this page more closely and ask you some questions about it", the answer i get is not "rolled eyes", it's "absolutely, that's what i'm here for"

But ought personal responsibility matter? People willingly sign this stuff.

Personal responsibility is not a binary.

And in any transaction I put the first blame in the person which had the more information in advance. It's their duty to inform the other, especially if they are the one's receiving the money.

Taleb has written something close to that recently:

I worked once for a classic U.S. investment bank of the prestigious variety, called “white shoe” because the partners were members of hard-to-join golf clubs where they played the game wearing white footwear. As with all such firms, an image of ethics and professionalism was cultivated. But the job of the salespeople (actually, salesmen) on days when they wore black shoes was to “unload” inventory with which traders were “stuffed”, that is, securities they had in plethora in their books and needed to get rid of them to lower their risk. (...) Salesmen hawked how a given security will be perfect for the client’s portfolio, how they were certain it would rise in price and how the client would suffer great regret if he missed “such an opportunity”, that type of discourse. Salespeople were experts in the art of psychological manipulation, making the client trade, often against his own interest, while being happy about it and loving them and their company. One of the top salesman of the firm, a man of huge charisma who came to work in a chauffeured Rolls Royce, was once asked whether customers didn’t get upset when they got the short end of the stick. “A customer is born every day” was his answer.

Which brings us to the notion of asymmetry, the core concept behind skin in the game. The question becomes: to what extent can people in a transaction have an informational differential between them? The ancient Mediterranean and, to some extent the modern world, seems to be converging to Antipater’s position. While we have “buyer beware” (caveat emptor) in the Anglo-Saxon West, the idea is rather new, and never general, often mitigated by lemon laws. So to the question voiced by Cicero of a debate between the two ancient stoics, “If a man knowingly offers for sale wine that is spoiling, ought he to tell his customers?” , the world is getting closer to Diogenes position of transparency, not necessarily via regulations as much as thanks to tort laws, one’s ability to sue for harm in the event the seller deceived him.

This looks like people fumbling cryptocoin purchases (or getting them lost for some reason or another) and people answering with "ah you should have known better and done the right way"

Do you read the terms and conditions pop up that every bit of software seems to contain?

If they cost $50,000, you bet I do. Lesser ones, if I sign my name, I do. Click thru ones on fairly worthless software aren't binding.

Look up the names Schwartz and Aurenheimer. They either ignored the click through EULA or deliberately broke it. Charged with CFAA felonies over it. One got prison for many years. The other killed himself to avoid it as well as to protest the insanity of having criminal charges brought against them because they broke the EULA terms on a web site. Both used scripts to cycle through ID numbers in a web page. This is what happens when you don't read. The system is fucked. Better make sure you aren't violating the TOS on any of the web sites you visit.

Aurenheimer knew what he was doing was legally wrong: https://www.wired.com/2012/11/att-hacker-found-guilty/ although the charges were grossly excessive.

Schwartz knew he was doing something legally wrong, because he hid in a closet to do it. (The charges against him were also grossly excessive.)

I don't think these cases support your notion that EULAs were the issue. Nor do I think these extreme cases are cause for EULA concern for someone using software as it was obviously and reasonably intended to be used. Disclaimer: IANAL, and if you want real legal advice, go ask a real lawyer. Taking legal advice from the internet is foolish.

Exploiting ignorance is legally fair game, that doesn't make it ethical. At this point dealers are basically just selling consumers to banks.

I would blame the consumers if they could take their contracts home, consult with family, financial experts, etc. But, have you ever been in a sales room? Most people are pressured to sign ASAP and dealers generally refuse to print out contracts until after they're signed.

Not in the UK. A contract has to both be fair and understood in order for it to be valid. The thing is, given all the finance agreements I've had in the UK tell me what the total cost will be ( generally over double the cost of the product ) I'm not really sure these products aren't to be reasonbly understood and it woukd seem like laziness or greed eould be the biggest driver.

The exception to the rule here would be payday loans which have some horrible outcomes shouls you fail to pay them back on the agreed date. These were being legislated for the last I heard, so I'm not sure if they still exist.

The other game in the UK is targeting the poor with silly rates of interest in the knowledge that many of them simply won't pay. Technically they're high risk loans and thus somewhat valid but there is an argument that the likes of brighthouse shouldn't exist and that people without jobs shouldn't really be given finance to buy a tv at over double the retail cost.

> But, have you ever been in a sales room?

Yup.

> Most people are pressured to sign ASAP and dealers generally refuse to print out contracts until after they're signed.

I refuse to sign until I see a printed copy. Just remember that the dealers want that sale a lot more than you do. If they aren't being reasonable, get up and walk away. They'll change their tune very quickly.

When they pass the bar exam. It's easy to think you understand a contract, but you don't.

Unfortunately clear language isn't litigated. The vague and obtuse language has a legal meaning, because it has gone to court. So that's what contracts are forced to use.

car dealers are like the most common example of this since forever...

Car dealers used to profit from people's emotions and ignorance about the product. That's a reasonable exploitation of ignorance because car buyers should know about the car they're buying.

Today, car dealers sell consumers to banks using cars as bait people. Exploiting people's ignorance of dense financial/legal contracts seems extremely abusive to me.

Off course you are right, but welcome to the real world. The only reason it was not done before, was that it was not feasible.

Guy walks into a car dealership. He's dressed well. But the salesman is bored, he doesn't care. Idly, the salesman asks,

"Hello there. So, what kind of car have you been thinking about." He doesn't care.

"Oh no, I'm not here for a car. I was wondering if you had any derivative contracts that bundled those sweet financing contracts you've been floating."

Salesman bolts upright, and goes shifty eyed - looks around to see if anyone heard. He goes to the front of the office and locks the door. Now he's all ears.

"Come with me to the back. You're in luck today."

That's because their deal was hedging on the additional commission they'd gain from financing. It's rather screwy. Whenever I trade in a car I always negotiate price on the car alone first, then get a trade appraisal (usually have one in hand from Carmax prior) and if they start playing games I walk out. Past two cars, I walked out and got a call within an hour saying come back we'll do the deal.

I did similar with our last Honda. Came to the end and I asked if they would want me to sign an arbitration agreement.

Told them I would, but not for free. A lot of people died for my right to sue them in court. I asked for and received an accessory they sell for $180...

They were confused...

Thank you for that... but I think you sold your rights too cheaply. I walked away for the right to cross out the entire arbitration clause. They were mystified that I would even read the stuff on the back of the contract, let alone have a concern with it. They were offering me thousands of dollars off, but wouldn't budge on the clause.

I went to another dealer the next week that hadn't yet added that toxic language to their contracts.

I just consider myself fortunate that I still had the option of going with another dealer. I don't think it is possible to find a bank, phone, or internet provider without an MBA clause.

Credit unions on the other hand, you'd have a much better time with.

Here's a good summary of the best way to approach this problem: https://www.youtube.com/watch?v=M0Q5ReCw5Gs

Basically know precisely what you want and do your homework to find what the common discount is, and push it just a little bit. The main point is to be an easy customer.

Either that was a cheap car or you have some serious income...

Is buying a new car with cash really that weird? Not to mention that he could have obtained the money elsewhere at a lower rate(say a 5% loan from a bank vs 8% on dealer organised finance) - in which case as far as the dealer is concerned,he's paying in cash from his own account.

It wasn't anything like this when I went shopping for a car at Audi and MB last year.

I was expecting some discount for paying cash since the interest rates were all less than 2% (which barely covers inflation). However they were completely indifferent to whether I paid cash or financed so I financed.

I used to buy cars with cash. But right now car loans are so cheap, if you have good credit, it may make more sense to take the loan and keep the cash invested.

I think my current rate is 2% or so... an unthinkable rate not so many years ago.

If cost of debt < investment returns -> borrow money / finance

There is a lot more to this than a simple equation. Otherwise we would all borrow as much as we could (about 2% and somewhat predictable) and put it all in the stock market (avg 7,5 % but volatile).

To be fair, I think the equation doesn't get that much more complicated, typically. Add in fees and you go a long way to showing why this won't work. Add in a floor function for operating expenses money you need on hand, and you show most of the rest.

>Otherwise we would all borrow as much as we could (about 2% and somewhat predictable) and put it all in the stock market (avg 7,5 % but volatile).

The 2% rate is that low precisely becomes it comes with collateral (the car).

Interest rates on personal loans with no collateral are closer to 10%, which is the reason people can't do what you're suggesting.

Anyone willing to give me a loan for $10m at 2% -- I'm game.

2% is a good interest rate for a collateralized loan, and frankly, often it's not worth putting up the money yourself if you can borrow it (at 2%). Then again, a car isn't (really) an asset with a positive RoI..

tell that to the people that own certain porsches. some of those 911's go up in value

You can't get unsecured credit that cheap for very long or in great quantities.

And when people do shit like that with home equity loans, etc, everything works great until it doesn't.

More strictly: (investment returns - tax payable)

(unless your debt is tax deductible ... most car loans aren't)

If it's a company car it is.

When I bought a Honda many years ago, they were offering 1% financing. At the same time, Toyota was doing 0% financing. I don't know how they make a profit on it, but why wouldn't you get a 0% finance deal over paying in full?

I think the main benefit of paying upfront is to buy a used car.

it's just another form of competition right?

all car firms offer lower and lower loans rates to try to get you to buy their product, and eventually the rate reaches 0%

It's mostly a function of the general interest rates.

If that was the case, why stop at 0%? Why not negative?

would probably confuse people

They make money in the markup of the car. A car MSRP or what it's sold far is far more then what it's cost to manufacture.

Some dealerships like GM, used to also have a bank. GMAC. Ford w/ FMC.

A car that's sold for 12-14K, has a general margin of 10-15%. Some as low as 5%, but still.

The 0/1% is also hard to obtain, needing to have good credit and possibly sizable downpayment, but don't worry they have options if you sign at the dotted line.

The fact that you think they make no money on 0/1%, is you falling for the marketing.

Actually, they were making money by selling the loan. Bundle up plenty of these small loans that are relatively safe with a few that are not, and you have a financial package that can be worth a lot of money.

Edit:. I meant to have an "also" in my first sentence.

Not if the auto loan is say 5 years and they're offering 1.5% financing. The 5 year treasury rate is currently 1.76%.

So they're losing 26bp of yield for taking on (the albeit limited levels of and partially diversified away) the credit risk?

Again, they bundled it with other loans.

Now, it probably isn't as bad as it initially sounds. But, it is more complicated.

Again, yes that partially diversifies away credit risk. But you're still losing money if you compare to the risk free rate, which is the 5 year treasury on a 5 year loan. Let me just repeat that such a loan is being offered below the risk free rate! It's impossible for bundling to add yield, only decrease credit risk.

On that loan, yes. But just like nobody would buy magic cards if they knew all of them would be commons, adding just a few rare high value cards will pull the rate that people will pay for the others up. But only as a bundle.

You are incorrect and your magic analogy is flawed.

Do you have recommended reading or links to an overview of how it actually works?

A student subscription to the Economist perhaps?

That my analogy is flawed is not exactly surprising or helpful. It is an analogy and only intended directionally. At best. You two seem to indicate it isn't good at even that. Which is a claim I'm interested in knowing more about.

I explained it above. The dual risks in a loan are credit risk and term risk (look those up and learn about them). Since the term is 5 years, the investment with no credit risk is the 5 year treasury (this is the credit risk-free rate). All loans have credit risk. Bundling loans does not eliminate credit risk (this is what 2008 taught us), though it does reduce credit risk. Selling loans with rates below the risk-free rate has negative expected return.

The proper analogy is this: treasuries vs. corporate bonds. Here is the current yield spread (difference in interest rate: corporate minus treasury): https://fred.stlouisfed.org/series/BAMLC0A0CM

The spread is always positive, because investors demand extra yield for taking on credit risk.

I asked you the wrong question, then.

What, then, is your explanation for why they make these loans?

My explanation is that they've done the math on how more generous financing encourages more people to buy cars, and that the losses they take on the loans is less than the extra profit they make from the additional car sales.

I guess my cynicism has just grown to the point that I feel some industries have settled on never taking a known loss. That is, this seems like it is the easy answer, and is certainly what folks would do in the small. At large, though, I feel like they are able to have other options.

(I fully ack that just because I feel it, does not mean it is the case.)

I explained how they're not really taking a loss, since it increases their profits overall. Companies make these decisions frequently; a closely related concept is a loss leader.

Thanks to both you and taeric for keeping the exchange civil.

If you ever see me being uncivil, please call me on it! I consider it a safe assumption that I was mistaken on anything I'm not an expert on. And on those things, I think the odds might actually increase. :)

Same as with Nespresso machines, the machine is cheap (Probably sold at a loss but I have no numbers on that) because over a lifetime the customer will buy grossly overpriced capsules which will make the money back and more. Game consoles work the same way early in the cycle.

What do folks buy as additions to their car? I could see an argument for taking it to dealer's shop. They certainly do what they can to lock out other mechanics.

Would be curious on numbers to know how successful that is.

A loss leader has lock in. How does that relate to cars?

I did not state that what the car companies are doing is offering the loan as a loss leader; I am saying it is a related concept. I was offering it to help in understanding that companies make tradeoff decisions of this kind. Please don't take my comment as making a direct equivalence between the two.

Even directionally, I don't see how it is similar. I could see it being like door buster sales.

Indeed, I mainly expect that is what they are. Convinces people to get in the market for a car, but then actually get something else.

I give up.

There is no need to "give up." My questions are not trying to prove you wrong, but to help educate me.

So, my specific question here is what makes it closely related to loss leaders? A concept which actually makes a lot of sense for me. If that was meant in the broadest of terms, then I understand. But "closely" does not imply "broadly" to me.

The problem is that you _seem_ to have a hard time grasping the very simple math involved.

What math has been presented?

https://news.ycombinator.com/item?id=14477777

I fully ceded that point.

The question at this point was much more narrowly scoped and around how this is "closely related" to loss leaders. On that, no math was presented.

Sorry, I didn't meant to indicate any of that. I just meant to say that you should be reading the Economist for this kind of stuff.

And if you can finagle to get the subscription on a student discount, it's definitely worth it. Full-prince subscription is debatable.

The manufacturer is subsidizing the interest. It's 1.5% + cash payment.

10-15% for the manufacturer. A dealership is not making anywhere near $2,100 profit on a new $14k car.

If you don't get your loan through the dealer, it's the same as buying in cash from their perspective.

So in that case, I'll take my 2% external-bank-loan and drop off the check at the dealer all day long.

Cuts your sticker-price negotiation ability a bit since they lose another place to fiddle with the numbers and make money on the backend, but ultimately the end result will be about the same, and it's much less headache to have the financing lined up regardless of which dealer you choose.

I've always locked in the price and flat-out refused to talk about how I was paying for it until the price was agreed upon.

It worked for me, took more time I will say, but I got a good deal on a brand new car that I'll drive for a very, very long time.

Why does buying a car in America involve so much (or even any!) negotiation at all? I guess it's a form of price discrimination?

I just tried to figure out (via Google) whether it's common in eg Germany---but what I found what mostly only about negotiations for used cars.

It's normal in Europe. I've never paid the sticker price for a car.

Buying anything above, say, 100€? Smile, say 'discount?' and they will through in something for free or give a few percent off.

And that's before any kind of negotiation (unless you count asking nicely as negotiation). And I mean anything. I've done it in many places. Is there anywhere where that does not work?

> Is there anywhere where that does not work?

Your local Apple Store in the USA.

can you expand on the "anything"? I'm having doubts that I can negotiate the price of eg. a TV bought in a hypermarket (Walmart, to give a US example) ?

Hm, I haven't tried that yet, but I think it is possible. It usually works very well in specialized and non-chain stores. If you cannot find a salesperson with any decision power it might be harder.

You can try asking the next time you buy something big. The worst that can happen is them saying no, if you really asked nicely.

PS: I dented a rental car and got a huge bill. I called them up and basically said 'discount please?' They gave me a 20% discount, and that was without any kind of arguing or confrontational talk, just the question. So it's not just for stores.

Literally, the only things you negotiate in the US are cars and houses. Not groceries nor clothes nor millions of other things. Perhaps a few minor things here or there.. but we pretty much just stick to the basics.

Healthcare. If you ended up paying from pocket.

Mattresses are negotiable. I offered to pay cash and they took like 40% off the price. I was kind of dumbfounded.

Did they put it through the books. They may be able to sign it off as damaged goods and pocket the cash hiding the sale from revenue and upstream managers.

First time I bought a mattress I wasn't aware of this. Second time, I got the bedframe, box spring, and mattress protector included, and still managed to knock ~ %20 off the price. I try to negotiate everything now, and have had some measure of success. I will admit that negotiating is mostly, to me, a fun game, rather than a way to save money.

That depends on how broadly you define negotiating. For example, price matching and acceptance of competitor coupons are both forms of negotiating. But you're right, even for retailers that offer price matching or competitor coupons, the vast majority of purchases don't involve any form of negotiating.

>Why does buying a car in America involve so much (or even any!) negotiation at all?

It's just another choice. There are plenty of car dealers here that offer a "no-haggle" experience if that's what you want.

>Some dealerships like GM, used to also have a bank. GMAC. Ford w/ FMC.

If you went by profitability, for many years it was probably more correct to describe GM and Ford as banks that had a side business in automobile manufacture.

That's also for tax dodging. Banks don't own money only lends it at risk, maker don't earn money keeping margin low, win win

Yep, my 2012 Civic was bought on 1% financing. Paid off now, still runs great, and I kept the would-be total payment in cash in retirement accounts.

Probably could have done better on a used car, but for once I wanted to be the one to run something into the ground. Still waiting on that.

You'll be waiting a very long time on that one.

I have a 2003 Pilot with 250k miles. It will die someday, but it's lasted about 5 years longer than I expected it so far!

Car companies often have a bancing licence on their own. So they pay some interest but can create more money with these deposits. So it's cheap money for them.

https://en.m.wikipedia.org/wiki/Fractional-reserve_banking

That's not how fractional reserve banking works..

Bank are paying for deposits, and create money wjile the deposits are the security. Simplified.

Virtually every car dealer partners with real banks to handle loans. They certify your car as collateral, and essentially apply on your behalf, and you walk out the door with a loan from JP Morgan, Chase, or whereevs.

My experince in Europe was different. I actually looked into Wikipedia for a Honda bank, and it exists. I also know Volkswagen bank.

Speaking specifically to Toyota's 0% deals, I bought a Toyota a couple years ago, and at that time there was a cash back incentive that was mutually exclusive with 0% financing. This car was pricey enough that 0% was still a better deal, but for most of what Toyota sells it's a worse deal.

Most automakers do something similar now. Regular financing is so cheap now it almost always makes sense to get the cash back deals from the manufacturer rather than get the 0% financing.

Those below-prime numbers are being subsidized by the price of the car. The calculus isn't any different for a car dealership than it is for a consumer: if it made more sense to invest that money than loan it out with a car for collateral, the dealership/bank would have done the same thing. They give you low rates because they want you to buy the car at the price they ask.

In principle, you can pull out a checkbook and bargain back the hit you know they're willing to take on financing.

This type of consumer credit's also seems to exist to lure enough people other to other products of the cooperating bank. It doesn't need to be priced in into the product and could actually be paid for by the bank as lead generation. Gullible people might fall for the types of "Keep your monthly payment rate and afford a vacation" while they are predatorily increase the actual interest rate.

Those incentives are there to keep the cash flow going. The car market is seasonally cyclical, but manufacturing is most efficient in a steady state. Those deals are there to keep the pipeline full.

> why wouldn't you get a 0% finance deal over paying in full?

Less stress? You pay money, the car is yours, problem solved. One thing less to worry about.

I bought 0% Apr from Toyota. It's not really 0% though, because (at least in my case if I would pay cash, I would get $1,000 off). So this is equivalent of paying $1,000 of interest up front, just masked to look like there is no interest.

It's a little worse than that as you pay generally pay some form of sales tax on the purchase price not your interest payments.

Plus the 1000 if invested would probably be say 1150 after five years.

Those 0% loans often have costly penalties if you're late on a single payment. They're banking on the odds that you'll screw up and be late somewhere along the line.

The financing rate is 0% because the MSRP of the car is slightly inflated. If you pay with cash, you get a cash incentive (e.g. $2000 off), if you pay by financing, you get a similar discount but in the form of a lower nominal interest rate.

Jurisdictions with good legislation require dealers to also show the effective APR, which takes the cash discount into account and is almost always a more reasonable rate.

---

Apart from that there could be lots of special circumstances (making a quota, etc.) that could explain the discount if the offer was made to you personally as opposed to being advertised to the public.

My experience hasn't matched what you've posited here. I bought a car a couple of years ago, and found that multiple dealers consistently quoted me the highest price for cash and 0% financing deals, and would only structure discounts into the price if I paid interest. A discount for cash was right out. Perhaps cash purchases may have gotten you a discount at some point in the past, but dealers appear lately to be completely uninterested in them.

Well the discounts I'm mentioning, both the finance rate and the cash discount, are coming from the manufacturer, not the dealers. For example, here's a Forester at 0.5% rate OR $2K cash discount (might need to choose BC as region): https://www.subaru.ca/WebPage.aspx?WebSiteID=282&WebPageID=2...

Not every manufacturer does this, and not on every model.

What is stopping you from agreeing to a loan and then paying it off in full a week later?

Many of the 0% financing also have a "or $750 cash-back" offer as part of it.

I turned down a 0% offer and took the cash. I then went to a Credit Union and got a loan at 2%. The interest paid over the life of the loan totaled less than the $750 upfront.

The finance person at the dealership wasn't too happy once he realized I can do math.

> why wouldn't you get a 0% finance deal over paying in full?

I have a 0%, 60 month loan on my LEAF. Having such a loan requires me to carry collision insurance, so I treat the insurance company's profit on my insurance as the financing charge that I'm paying every month. (I otherwise wouldn't carry collision, but of course collision insurance is worth something, so I am only "really" paying the spread between that value and its cost.)

About halfway through the loan (when the imputed financing charge interest goes up because the loan balance went down), I'll probably pay it off and drop collision.

> I think my current rate is 2% or so... an unthinkable rate not so many years ago.

Its crazy. The financing on my Model S is 1.5%. There's no point in paying cash when financing is almost free.

Sold previous vehicle with equity in it, put all that in index funds, fully financed EV.

For the loan, if you are wary of dealing with the car company, a credit union can often give you a good rate with a more trustworthy agency. You get pre-approved, and walk into the dealership and walk out with the car.

If you finance through the dealership you can negotiate a lower selling price because the loan itself has value that they can sell. (At that point you refinance or pay it off. Make sure to ask them to waive the fees for the loan, too.)

Just bought a car that I could have paid for cash but they offered me zero % financing over three years, with zero down.

When you guys say "cash", do you mean "not credit"? Because my dealership did not seem to appreciate it at all when I gave them 30,000 euros in stacks of 50 euro notes.

Yea, often when people say "cash" they're just referring to an instant asset transfer (cash, check, eft, etc). Usually I would expect a transaction in a dealership be a check or some kind of electric transaction.

Sounds fun to pull out a large stack of actual cash, though.

It was fun for me. The salesman didn't seem to enjoy it, but, in my defense, I had told him I didn't want to wait a weekend for the SEPA transfer to reach their bank before I could get my new car.

Cash management is a PITA. Plus SAR reporting.

In France that would be illegal-- cash can't be used for transactions over €1000 because they're afraid of terrorism apparently.

Interesting. Was trying to think of something common that could exceed 1000 euros and monthly rent came to mind. I'm guessing mom-and-pop landlords expect check and/or money order as typical payment method, or wire transfer?

In UK it's normal to do a "standing order" which you set up either at the bank counter or more usually through your online banking. Other methods have transaction charges whilst this does not, you can do one-time transfers this way too.

Limiting cash transfers isn't only about terrorism, it's about limiting possibilities for using your "black money". Governement doesn't want to lose income, are they ;)

Stimulating digital payments is another method

Hmm, I think there's a limit like that here now (not in 2013 when I bought the car, AFAIK), but I think the limit is higher? Maybe not, I'm not sure.

Also illegal in many euro countries. Which country was this in?

His username is likely a big hint there...

Greece. Would you trust our banks with your money? :P

But for such things the Germans invented the 500 euro bill.

Eh, is this legal? Which EU country is that?

http://www.zerohedge.com/news/2017-01-27/europe-proposes-res...

EDIT: apologies, didn't saw see sibling comment; leaving the comment w/ the URL for reference on the directive details.

That's absolutely true. There are three main ways the dealer can make money on a deal. They are; New car price, Trade in value, and Financing terms. As a consumer you should always negotiate each of those items separately. What dealers like to do is move their profit between the three to make it look like they are negotiating when all they are doing is moving the bottom line costs from one line item to another.

So for example they might quote you a price on the car that they know is below average asking price from dealers in the area and give you a typical good interest rate on the loan but then way low ball you on your trade-in.

To avoid getting a bad deal I always do the following before setting foot on the dealers lot.

1. Go to CarMax or similar place ahead of time and get a quote for how much they would buy your car for.

2. Be ready to pay for the car in cash or have a loan pre-approval lined up from a secondary source for financing outside of the dealership.

3. Know what the car you are looking at sells for in your area.

4. If you are buying a new car, shop towards the end of the month. Manufacturers offer incentives to dealers based on the number of cars they sell per month. So say a dealer needs to sell 50 cars a month to get the incentives which are $500 bucks per car. If they are at 48 cars sold with two days left to go in the month they are a lot more likely to sell you a car at a lower price and get to 50 so they don't lose out on the incentive payments for the 48 cars they have already sold.

Once you are at the dealer make sure you negotiate each of the 3 parts of the deal separately. First agree on the price of the car. Then entertain their offer of a loan and for your trade-in if they are as good as or better than the alternatives take them other wise turn them down.

This sounds like the old four-square sales strategy that actually works AGAINST the buyer.

Yes, what I describe above is how you counter that strategy.

had a similar thing happen a few years ago when buying out my car at the end of a lease (normally a bad idea, but worked out due to specific circumstance). The person I was dealing with was baffled, kept wanting to have me fill out a loan app. He either didn't want to or couldn't understand what was going on.

At the end of it I told them I had the certified check as previously agreed for the full amount due on the vehicle, handed it to him and told them I was walking out the door in 10 minutes and they could call the police and report it stolen if they wanted to. It was unexpectedly difficult to close up a seemingly simple transaction with pre-agreed upon terms.

They get a second commission if you're on the right loan.

Definitely a case of the cliched bit about hard for someone to understand something, when their salary depends on not understanding it

I tried to buy a Mazda car outright. I was told that it would be 2000 dollars more expensive unless I finance.

I then asked if I can get the loan and immediately pay it off, and the dealership became sad. Apparently, Mazda financing gives them the 2000 dollars, but if the customer pays off the loan in less than 6 months, the dealership losses the money (on other states, they'd probably have an early repayment fee on the loan, but that's illegal in California).

So, I took the loan, paid off all but a thousand dollars, and now feel silly paying off the remainder over 6 months.

Similar experience. With a recent car purchase, the dealer's management was ready to let me walk at the end, even though the price was posted on the internet and verbally reconfirmed. This was simply because I "revealed" that I would not be financing it. Worse came to worse, and with the tacit consent of the salesperson himself I ended up financing it - maxing out the amount I could put on an AmEx in order to bank reward points, and paying off both the AmEx and the entire loan balance as soon as I received my first payment notice.

As it turns out, they receive a kickback from their financing partners if the loan is held >= 90 days. So, in the end, I got the car I wanted at the price I wanted, plus some cash back from AmEx, and minus a whole bunch of wasted time by everyone involved.

My wife did that before we were married, except with cash.

The GM asked where she stripped.

I recently did the same (albeit for $10k). Even after agreeing on everything, they kept asking "are you sure you don't want to finance just part of it? We can give you a really good rate!"

All I could do was patiently ask them "why would I do this? Is it not still more of a cost to me, even if a small one?" They acted really confused and upset but I understood that this was simply a sales tactic to make me feel as if I was making some sort of mistake by not paying some small amount of interest in addition to the cost of the car.

I eventually got a bit irritated as it was making things take a lot longer than they needed to. I just told them, "look, we already negotiated a price and I have the check written out right here. I have no need to finance a $10k car right now and I would like to just finish the sale."

They weren't quite as friendly after that but hey...it's an adversarial relationship and I'd been perfectly cordial up until that point. I was already paying $10k for a car they likely got for half as much as a trade-in anyway.

It's feature, not a bug.

Remember the sub-prime mortgage crisis? People were made to buy homes they couldn't actually afford.

It's the American way of doing capitalism, and people should have gotten used to it by now.

Nobody was made to buy a home they couldn't afford. They wanted it, and someone was willing to sell it to them at near-predatory rates.

Nobody had a gun held to their head to sign a contract.

You're right. I rather meant to say "people were manipulated into buying...". It's always the same, people don't understand because they lack education and some rich guy will take advantage of that. The movie "The Big Short" [0] sums it all up very well.

[0] http://www.imdb.com/title/tt1596363

No one was manipulated. Everyone was greedy. They read the news, they knew what the houses down the street sold for a few years before. They all thought they'd get rich flipping houses.

Loan officers just facilitated what their customers already wanted.

You have missed an important point. Those loan officers were paid a fee for the service and their institution sold off the loans that were derivatized. The patsy was down the line. They all got paid...

Go back and review the news that came out. "The Big Short" is a decent summary. The trading manager at Bear Stearns who bought the derivatives got to walk out and keep his big bonuses. The share holders ate it. The rating institutions were complicit too - they knew the products were crap but knew the customers (lending institutions) would go to another one and so wrote the bogus ratings. See the players in the game got paid. The snooks got screwed.

Bill Black, who prosecuted the Savings and Loan Crisis, and sent many fraudsters to jail reviewed the 2008 crash and was incensed at the lack of prosecution.

The consumers saw what they wanted to see. Very few consumers perfomed due diligence. The old proverb tends to be true: "If something seens to be too good to be true... It probably is." Fraudsters have taken advantage of the gullible throughout human history. Our generation has no excuse: we have unparalleled access to information and most are too lazy to put the effort in to check these things out our to hire competent counsel who work for us not the seller. How many parents and students understand the debt they take on for college and the expected ROI???

i understand how collateralization works, i used to invest in tranches. You are confusing the fact that MBS buyers didn't do their homework, with the fact that home buyers were greedy specifically because MBS financing enabled them to be.

I'm surprised that you say that while referencing The Big Short because I thought it made it pretty clear that the people selling houses lacked education as well. There was the whole thing where the guy sees dudebros selling houses to strippers and was all "oh no its all true". I think one of the dudebros even said something like "I was working at the car wash two years ago and now I have a boat". Everyone else not knowing what was going on was the uniting theme of the main characters.

Look nobody makes you buy anything. But RE is different in that the market isn't completely rational. Your options are rent, own, or sleep in your car. When I was out visiting a town in the Midwest you couldn't rent. There were no houses for rent. Even if a developer started a multi unit rental right now it would still be 6-9 months until it was rentable.

>nobody makes you buy anything //

But companies spend vast amounts of their revenue to manipulate you in to doing so, or perhaps you haven't heard of advertising?

Your absolutely right, but the loan issuers were facilitating people coming to those decisions. I remember when my wife and I bought our house just before the bottom fell out. The loan officer couldn't believe we were only getting pre-approved for a mortgage that was a maximum of 10% of our gross income. She tried (somewhat) to upsell our Max loan balance, but we stood firm.

> Nobody was made to buy a home they couldn't afford. They wanted it

I suppose, in the same way that no one forces me to buy drinking water, I just want it, so as not to die.

If there is no affordable housing available (as is the case in most US markets today), you essentially are made to buy/rent an unaffordable home if at all possible. Because the alternative is homelessness, which isn't really an alternative.

Obviously, sometimes people purposely overspend on housing because of lifestyle inflation. But I don't think that's a majority -- many people are overspending on housing because housing is a fundamental human need and they have literally zero alternatives to overspending. It's more common than most people will admit.

The difference here is that many of the people caught in the mortgage crisis could afford homes, they just couldn't afford the really nice homes that they bought. People who's finances would reasonably put them in a $250,000 home were instead buying $750,000 homes on the idea that the price would only go up and the loans were cheap.

There's plenty of affordable housing around, it's just not in places people want to live. Some markets require you to shell out 50% of your income on housing, but it's not like people have no choice. They do it because overall it's worth it to them. If they didn't, there wouldn't be enough takers.

Car loans are actually getting featured on Bloomberg for having similar risk last month.

Though there were assurances that the same thing wouldn't happen since loan issuers were reining themselves in, that cars were far more liquid than a house, and easier to seize on a failed loan. Of course if it's already in the news, it's too late to act.

Car loans also aren't federally insured and guaranteed, and unlike the housing bubble, the federal government isn't pressuring car loan companies to make shaky loans to bad credit risk customers. This is almost entirely a free market, and so it's bubble will be smaller and the consequences will be visited almost exclusively to those who made the bad loans.

You have it backwards. Buyers demanded the ability to buy homes they couldn't afford, the government required Fannie Mae, Freddie Mac and banks to finance them and the US Government guaranteed some of the loans.

The buyer behavior was rational, at least on the surface, because homes almost always appreciate over long periods and were appreciating like crazy during the bubble. We are pattern matching monkeys, all of us, and it's only the few who can see the bigger picture during those times.

Many didn't want to miss out on the big payday buying $300k homes and flipping them for $500k a few years later. All bubbles accelerate bad decisions/behavior and it's really difficult (if not impossible) to legislate incentive driven behavior away. It's obviously possible to not legislate bad market incentives, but we flunked that one to.

Your wrong, people with money were looking for "safe" places to park their money and make interest. Savings accounts suck, thus all these financial products were born.

Saving some accounts don't suck, they are excellent at what they do. Which is providing a very secure place for your money that is quickly accessible and even pays a small amount of interest.

There's obviously higher return investments, but they provide those returns by taking more risk, and more variance.

This is an interesting spin, in that it absolves a mortgage industry which did everything short of drag people in off the street and hold guns to their heads to try to issue more loans. Omitting that, when a major source of the massive drive to issue loans was the popularity of mortgage-backed securities as an investment vehicle and the incredible demand for such securities, is... well, it does make one question your understanding of the problem, or if you do understand it perhaps the motives behind your choice of framing.

Getting even more money out of the consumer doesn't need to be a shady thing. Lots of people simply don't have the money to buy a car outright. Or enough to purchase on traditional loan terms.

Almost no one pays cash for a car anymore and the industry knows this. Many dealerships make more money (or at least they did, but I'm sure they still do) from getting people to get a loan from one of their "partners" (auto-loan companies which accept their paper). It's been years since I worked for an auto-finance company (my soul still feels a little dirty), but I know it wasn't uncommon for dealerships to get an additional 1-2% from the loan. This gets complicated as far as how much they earn per car, because there were also penalties for loans they sold that defaulted before a certain point etc. In the end it worked out in their favor though hence why they kept using certain loan places. This is why you hear people tell you always negotiate the price of the car before you tell them you have your own financing (either cash or through your bank), because they'll drop the price a little more knowing they will make it back. Don't ever think they're working to get you the best deal possible either, they'll either give you the first response they get back, or the one that nets them the most money if multiple ones come back at the same time. The faster they get you to sign, the faster they get paid.

(I also really hate to say this, but if you're female and don't like confrontation, bring a male friend and act like he's the one buying the car. It's a male dominated industry that is very sexist. If you're a strong person and can handle it by all means go for it, but expect them to be pushy and talk down to you. I'm a white male, and I hate dealing with a lot of them. I can't imagine, although I've heard the stories, of what it's like not being in the privileged class.)

The real truth is that to the dealership, this additional money doesn't really matter in the big picture. They make almost no money from selling cars. You ever notice how all the dealerships have a service department? That's not by coincidence. It used to be (and probably is still close) that 90% of all revenue from a dealership is on service. Getting money from warranties; getting money from people who only trust where they bought it etc. They want to sell the car, so they can get the maintenance. They won't sell for a loss, and they'll take you for what they can, but really they're in it for you as the long term support. Also, the car salesperson has no real influence over the price you get. That comes from the general manager behind the desk. (A long time ago this didn't used to be true, but dealerships wised up that you don't trust people on commission making decisions. It's quite possible the sales people don't actually know the true cost of the car to the dealership.)

You want to hear about people signing things they don't understand? I really wanted to scream at people after I heard this story. There was a hispanic couple looking to buy a car and they didn't really understand English. The car salesman told them if they signed the contract, they could drive the car as much as they wanted. He neglected to mention to they actually had to pay for the car, and so they took the deal. You can guess how that worked out. Course the salesman didn't care; he got his commission. I'm not saying they're all like this, but some of them are complete trash.

So the hispanic couple thought they were being given a free car?

Yes, I don't know exactly how he convinced them of it, but it was pretty much the "That's how things are done in the U.S."

In fairness, the system has gotten to the point that logic no longer seems to apply. Others have reported dealers offering a price discount for using their 0% financing. That's not how it's supposed to work.

I'm losing my ability to say "obviously they can't mean that".

That is literally how my financing of the LEAF went with NMAC (Nissan finance arm). There was an ~$1000 incentive from NMAC iff I financed through them at 0% for 36, 48, or 60 months.

Uh, OK. I checked the paperwork carefully and it was mathematically as-stated.

I'd balk at the claim, but, as above, it's consistent with the other reports.

Did you find evidence of the hypothesis that it's a kind a "tripwire" to get you to accidentally miss a month and trigger enormous penalties?

No evidence of that and in fact, one of my first payments was late as I was setting up auto-billing and there was nothing more than a letter in the mail reminding me.

I'm still baffled as to why/how they decide to run programs like this. Maybe it gets them information about when I contemplate selling the car (as I'd maybe have to ask the payoff amount)?

They could potentially come out ahead, if the small loss on the financial asset is less than the margin on the MSRP of a sold vehicle, vs nilch on an unsold one.

When it comes to PHEV and electrics there are sometimes other factors at play as well. Sometimes these vehicles are used as a source of carbon credits and sometimes they're used by a manufacturer to offset their less fuel efficient cars in order to comply with various fuel economy regulations.

Had the same thing in the UK. They were desperate for me not to pay up front so they could try and sell me some other finance product that would cost me more / enable me to spend more without understanding the true cost.

This kind of credit for cars / housing / uni / whatever is just not helping people afford things they would otherwise defer buying. It's predatory. It's pushing up the price of items. It has no place in our society. It should be tightly controlled. Finance is pulling forward demand to get tomorrow's bonuses today and to hell with the consequences tomorrow.

If we want a better world we have to regulate debt issuance. Yes some kids from poor backgrounds can't buy a nice car even though they are doing a law degree at Harvard and will be able to cover it no problem in 3 years time. The flip side of the coin is far more damaging.

We should stamp out these cockroaches.

Yes some kids from poor backgrounds can't buy a nice car even though they are doing a law degree at Harvard and will be able to cover it no problem in 3 years time.

I think you're underestimating how poor most people are. 60% of Americans wouldn't be able to cover an unexpected bill of $500[1]. Most people just don't have any money saved, or money left at the end of the month to save any. This isn't about young people buying nice cars; it's about the majority of people buying any car. Clearly cheap credit adds to the problem, but if the ability to borrow disappeared overnight a lot of people would have tremendous difficulties.

[1] http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings...

You've completely missed my point. The ability to borrow sets the price. This is how prices on goods are set, not by how much it costs plus a "fair profit".

That seems insane that it'd be the biggest check they've seen. I've bought an 80k BMW and an 80k Jaguar outright, and they both shrugged at me paying by check. BMW let me use a personal check, Jaguar wanted a bank check (easy enough).

Edit: A normal down payment for a luxury car of any brand can easily be 20k up front.

did you get the impression that the parent purchased a new luxury car at a dealership in Beverly Hills? :/

You went to a BMW/Jaguar dealership, whereas OP most probably went to a smaller dealership aimed at a less affluent population.

That heavily depends on where you go and the area. Not the same as a car, but when I went to get the check for the down payment on my home (which was 6 figures), I went to my bank which happened to be in a pretty upscale neighborhood were houses were significantly more expensive on average than what I was buying.

So when I asked the teller to give me a multi-hundred-thousand dollar check, they didn't even blink. "Please enter your pin number sir. There you go sir, have a nice day".

I assume this is very similar. A place selling BMWs is probably used to seeing newly minted millionaires on a daily basis.

It's weird getting big checks if you aren't used to it. I had some money coming out from a home sale and got a cashier's check for 50k or something. They asked for ID and checked it very slowly, but nothing past that.

> Jaguar wanted a bank check

In case it wouldn't start the next morning ;)

I paid for my current car with my debit card. I asked my bank beforehand whether they needed to authorize that size of transaction but was told that they can tell which accounts are for car dealers.

I wondered about that when I bought our last car. Near the end of the transaction I suddenly realized that I would need to pay a down payment and all I had was my bank card (ran out of paper checks years ago). They took it and ran it as a Visa card, no problem. Guess they get a break on the fees.

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