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Down Payment “Down payment is a bridge between what the bank will lend and the sales price. And a fair question to be asked is: How much of that bridge is profit for the dealer?”
Only one of two things is going to happen with your down payment. It’s either going to protect you, and build equity in your car, or it’s going to make the dealer rich.
Let me show you what I mean.
If the bank will loan you 100% of book value and the book value of the car you want to buy is $10,000, right there, right then, $10,000 is the maximum sales price. If you have $1,000 for a down payment, then the maximum sales price for your $10,000 car is $11,000. If you have a $2,000 down payment however, the dealer can charge $12,000. $3,000 down? $13,000. Do you see where this is going? At a certain point your down payment becomes nothing but a profit center from which the dealer has a solid foundation to build your deal structure in his or her favor. Your big down payment is making the dealer rich.
Learn how you can protect your down payment and build equity in your car, read...
Kick the Dealer...Not the Tires!
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