After spending a few decades in the car business, I believe this is the #1 request that I hear on a regular basis.

"My payment now is $xxx/month

I just want to trade my car in and buy (or lease) a new one for the same payment, or, hopefully, less, with no money out of my pocket."

People, if that was possible I would have an arrow at the freeway off-ramp directing traffic to the dealership and 80% of the cars going by would pull in.

Get a brand new car, same payment as your old car, no money down? HAHahahahahaha, American dreamers.

Everyone would do it once a year or more if it was possible. People just do not understand the concept of depreciating assets.

Then again, even professional bankers evidently did not understand that concept either, especially ones in the mortgage business...

Of course, if they had some equity in their trade-in (say its nearly paid for and worth $15K), I suppose it would be theoretically possible.

But I am gonna guess that if someone is looking at monthly payment, it might be a marker that they are upside-down on their trade-in already.

Can I trade in my paid for 7 y.o. truck on a 2009 for no money down and the same payment that I make now?

Yep. Just don't let the cops catch you.

Yup, especially when they financed it for 72 months, put only tax and license down, and try to get out of it in 18 months...or less.

had one the other day that was 6 months into a loan on a Hemi....$25k negative equity.

Stoopid, stoopid people. How do you maintain your sanity Troop?

Combine Stoopid People with shady finance (autos/houses, etc) people, and look what we have. Disgusting.

Where I come from, those are called 'liabilities,' and they go on the other side of your balance sheet.

Aw C'mon Troop, those are the ones that guys in the car biz sit around and laugh about at the bar after work. At least we used to.

Names like Stooooooopid, Clueless, etc., don't even come close to describing some people's lack of knowledge about how financial matters work. Amazing.

And, when you walk into a dealer and say "how much for the car" they don't really know what to tell you.

They will always ask - how much do you want to pay per month?

And I will say - whatever it takes to get what I want.

And they will get a confused look.

It cuts both ways. Car dealers only want buyers to think monthly payment - because then they can hide all the profit, for the customers to worry about later.

Indy...you are 100%. Plus car dealers WANT you to take the payment method as they make a lot of $$$ that. They will sell you a car for cash, but it is not preferred.

But I agree...I buy cars/boats on price, I am smart enough to figure out my payment on my own.

^^^^^^^^^

Yes, it is a proven FACT that most cash buyers pay much less than folks that finance.

Sure, there is always ma and pa Kettle that stash cash away under their mattress to save up for a car and then walk in and just lay down at the first pencil shown them, but they are few and far between.

Yep, salesmen LOVE payment buyers...

And the source of your FACT is?????

I doubt this is true for a variety of reasons but I'll withhold my comments for now.

So true Indy.
I was going to mention the same thing but you beat me to the punch.

I can count on my fingers how many times we have been at a dealer shopping – not often.
But almost every sales person brings up "what can you afford for a payment" or "what are you looking for a month".
If we get past that, good. When they mention it again - goodbye.

I won't paint all car salesmen with a broad brush, but my opinion isn't high.

Car salesmen ALWAYS ask about payments, but primarily to keep from wasting their time. I can't tell you how many times the first words out of a customer's mouth are "discount", invoice", "kelly blue book", etc.

Then when all of that stuff gets hammered out to a nothing deal, and you show the customer the payment at $598 a month and watch the color leave their face as they say "I can't afford anything over $350/month, you realize what you are dealing with.

Most people have a monthly budget, and if you can't stay within it, they will not buy a car regardless of how much you give for the trade or how little you sell the car for.

Huge waste of time for all parties involved...

BTW, is there a BETTER system to buy a car? We hate it more than you do, but it's the customer who insists on negotiating.

Apparently not. All the "no haggle" places seem to change back. And Saturn deals now too.

I feel for you Troop. I'm one of those guys that hates it when the first thing a salesman says after "hello, what are you interested in?" is "what payment are you looking for?" But I do realize you get a specific answer to that question from a majority of the people you talk to every day. Keep the faith man!

So Troop, which way do you want it?

In the beginning of the thread, you seem frustrated by buyers who say they can only pay $350 a month, then in the end you say it makes your job easier when a customer says $350 a month is their limit.

What you really want is buyers who say $600 a month, right?

Seriously, buying a vehicle is a negotiation. However, financing is pretty much rocket science for some people, and when you don't understand it, you are easily fooled. I can imagine more recently it is very difficult to make money on the sale price of the vehicle, but today it is just as easy to make money on that rocket science financing - so that's the only real profit point for dealers.

Cash buyers finance themselves and keep all the financing profits themselves - so I would say they almost always pay less for vehicles than payment buyers - that is if they get a good price in the first place.

Mutt's simple financing calculator,
$100 a month for every $5k you finance. Depending what you put down, that'll keep you upside down for about two to three years, then give you an extra two to three to pay it off.
$150 a month for every $5k financed will be better for you in the long run. Up-ended for maybe a year, and you'll own it hopefully by the time you get bored with it.

That rule would keep your from being very much upside down. However most people pay less than that. That formula would force you to pay $500 - $750 a month for a $25K car - which I don't think very many people do.

"Life is tough, it's even tougher when you are stupid"
-John Wayne

Because they don't HAVE to, that's the whole problem. With 72 month financing and cheap leases it's too easy to get over your head and upside down. Couple years ago I bought a slightly used Maxima, went through the whole "what can you afford a month" crap, told him not too worry about it and I cut my best deal on the car. Went to the finance guy after the deal was done and told him to write it up for a 24 month loan, he punched it in and in a sarcastic tone said "the payment is going to be over $700 / month, let's look at a 60 month payment". I laughed back at him and just as sarcastic said " no problem, write it up at 24 months." I think they were po'd that I bickered them down on price so much, in their eyes I couldn't afford it, then I turn around and walk out with a payment like that. They actually said to me "you know what kind of car you could be driving for that kind of payment???"

[quote=Keith .....

Because they don't HAVE to, that's the whole problem. With 72 month financing and cheap leases it's too easy to get over your head and upside down. ...."[/quote]

So True!

What I try to teach my boys in a nutshell: Remember there's a big difference between kneeling down and bending over. -Frank Zappa

I find length of loan is dependent upon your situation, not financial, but driving situation.
My wife's car, I financed 60 months, she drives all of 8k a year. My car, i do less as I can rack up the miles, a long term would put me into a final payment on a worn out vehicle.
In my opinion, car dealers are hurting themselves by getting people upside down for a long time. Yes, they can make a big profit on that initial sell, but it takes a long time before that person can buy another car. A wise salesman told me once, "You can fleece a sheep its whole life, but you can only slaughter it once."

I sold my Audi A6 last week on craigslist.com. Guy shows up at my house and it turns out he's an Audi mechanic. He puts my car on the computer, up on blocks, checks everything for about 45 minutes then low balls me with an offer. I laugh and say "my car was just checked out by an Audi mechanic for 45 minutes and it passed... I'm thinking of keeping it now!" I did not take his offer but he still bought the car.

In their minds they left a sale on the table. You could afford a $700 a month payment - so they should have sold you a $50K car instead of an $16K car.

What guy in the world would spend that little when he could afford much more?

The haves live below their means, the have nots live above. Simple as that.

I sell used cars for cash, no financing. The prices and miles are painted on the window, even sale price and specials, and still the customers almost always want to negotiate. The reason most no haggle places went back is that even though they don't haggle the customer does. Buy the way where does that put me in the car sake guy spectrum? No financing, prices painted on the window, easy to buy, everything disclosed up front.
The reason I do it this way is that I think it is absolutely foolish to finance a depreciating asset or a toy. I would NEVER finance a car or a boat. If I can't afford it, I wait and save for it.

But who are you selling those cars to? People who can't get financing I assume, right?

I still have at least 3 more years to go before even thinking of replacing this truck. Maybe even more as it is probably at less than ½ of its design life. So that would make six years or more w/o a payment. Am I bored with it? No way and I'm not so sure about these new-fangled partical trap systems either.

There's no reason to haggle. Test drive what you like on the front line and then later ask for your best price on the exact vehicle you want with all the options you desire from several different dealer's fleet departements over the phone. Go with the one with the best price and be done with it.

If you have a trade, sell it private party and skip the dealer's profit on that.

Obtain your financing from the best time value of money offered by your C.U., bank or even the dealer.
Buying a car is two separate transactions if you have no trade; best price and best cost of financing. If you have a trade, it is three separate transactions; adding in selling your current vehicle at the best posible price which most likely will not be as a trade-in at the dealership.

The key though is to keep your vehicle well beyond the payments.

many go to their own bank, I don't finance because I don't want to be in the banking business, I sell cars for a fair price, if I wanted to sell to deadbeats I'd do buy here pay here.