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Comment by jamesliudotcc | Hacker News Reader

I wonder how many people buy these things outright. Every time I see an ad for a luxury car, they tell you about the monthly payment. If you stop making the monthly payment, guess what? They take the whole car away.

There are already GPS interlock systems where the dealer can shut down your car and locate it for collection, just in case of such a thing.

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My husband and I purchased a new electric car last year.

It is for this and many related reasons that we found the exact car we wanted, took the VIN to our bank, and walked into the dealership with a financing check. The dealer financing officer called our bank, gave them the price-out-the-door, and our bank gave them a PIN to write on the check alongside the total amount.

We walked away without having any further relationship with the dealership. Despite this, they tried several times to get our written consent to run their own financing. We steadfastly refused.

Not everyone is in a position to do this, but it was nice because we didn’t have to put up with any (other) dealer bullshit. (We did have to put up with other tangentially related dealer bullshit, which I have previously written about on here.)

Edit: typo and context

In the states, dealerships make more from financing kickbacks than from the actual sale.

One of the strategies I hear about online is working with the dealership to take out financing with the implicit understanding that you’ll wait to pay off the loan until after they’ve received their payout.

One should always come to the dealer with their own financing already approved- because it’s a starting point for negotiation. It’s very common for dealers to find a better APR than you can get independently. It’s also common to bundle discounts/perks with dealer financing. Customer has to do the math to figure out if the deal is good for them.

Dealer GPS tracking and interlocking is usually reserved for “credit criminals” and folks with previous repos.

That’s frequently true. This was an unusual situation. In our case, they wouldn’t have been able to better our financing. Our credit union was giving us 1.75%. The best the dealership could do started at about twice that.

We had also contracted ahead of time to buy that particular car at almost exactly MSRP, and between the overly eager sales rep who wrote it up with no dealer add-ons, and Toyota’s allocation system deadlines, they were incentivized to walk us out of there as fast as possible. We were there less than an hour.

Edit: proofreading

Buying a German luxury car is kind of a silly financial decision for most consumers because the electronics are so fragile, and so expensive to repair. Ownership cost gets ridiculous after the warranty expires. So if you want to drive a Mercedes-Benz then the smart move is to lease instead of buy. Then it's based on monthly payments anyway so subscriptions are kind of moot.

The GPS interlock systems generally aren't used by new car franchise dealers. You mostly see those at "buy here pay here" used car lots that target "credit criminals" and do a lot of repos.

Assuming that initial assumptions about resale values and reliability hold out, leasing vs financing is essentially a wash. You’re either paying for the whole car with interest with equal payments over a period of time or you’re opting for lower payments with a final balloon payment.

Now, cash vs financing is a different story, but that depends on whether you have that much cash on hand and what you plan to do with it. Most people don’t have 35K available to buy a car outright.

I prefer cash over financing. Most buyers opt for the latter, and have been for decades.

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