[Captain Blight]

I found this over on an Ioniq forum. Those of us shopping out of state for a PHEV are pretty well screwed (no service, probably no trade-in). It doesn't make the "Market Adjustment" or "Out Of State Buyer Surcharge" any less painful, but it does explain them.

From the Ioniq forum:

I had a pretty frank telephone call with a sales person at the MSRP pricing dealer when I was adding myself to their wait list. They said they basically make no profit on the MSRP sale so they prioritize who they sell their cars to based on a number of factors:

• Is there a trade in that they can turn over for a profit?
• Is the buyer local enough that the car is likely to serviced by them?
• Is the buyer leasing or financing through dealer? (Finance would have to be for at least six months for the dealer to get anything out of it.)

So the list is not a first come, first service at all. It is a list prioritized by how much profit they think they can make from the sale. If you live a long way away, with no profitable (for the dealer) trade in and are paying cash then you are going to be at the bottom their list. This makes sense to me as I’d be doing the same thing if I was in their shoes. After all, they need to find some way to turn a profit to stay in business.

 

[Tucsoff]

This is a great post, thanks!

Throughout my car buying adventure I was coming to the same conclusion, that they are actually choosing who to sell to, versus first come first serve.

Oh also, I learned a long time ago, to never say you intend to pay cash. You are correct, they do not want to hear that!

 

[Captain Blight]

This is a great post, thanks!

Throughout my car buying adventure I was coming to the same conclusion, that they are actually choosing who to sell to, versus first come first serve.

Oh also, I learned a long time ago, to never say you intend to pay cash. You are correct, they do not want to hear that!

My financial advisor ran some back of envelope numbers. With the current yield in the stock market, if the APR is 2% or higher it is better to pay cash. If the APR is under 2% then it is better to finance and leave the money invested. I haven't cooked the numbers yet, but I suspect that Hyundai's current 2.5%/$500 "cash" offer is comparable to an APR under 2%.

 

[Tucsoff]

My financial advisor ran some back of envelope numbers. With the current yield in the stock market, if the APR is 2% or higher it is better to pay cash. If the APR is under 2% then it is better to finance and leave the money invested. I haven't cooked the numbers yet, but I suspect that Hyundai's current 2.5%/$500 "cash" offer is comparable to an APR under 2%.

I was commenting to your opening point.

If you find a dealer selling w/o a markup, don’t say you wanna pay cash… I actually SAY I have good credit so financing won’t be a problem.

You can always pay it off after 4 months if you like, with no penalty to the dealer. (new information to me).

 

[Starboy]

I was commenting to your opening point.

If you find a dealer selling w/o a markup, don’t say you wanna pay cash… I actually SAY I have good credit so financing won’t be a problem.

You can always pay it off after 4 months if you like, with no penalty to the dealer. (new information to me).

Yes and if you pay it off in a few months it really makes your credit numbers soar. Well worth it.

 

[Captain Blight]

I was commenting to your opening point.

If you find a dealer selling w/o a markup, don’t say you wanna pay cash… I actually SAY I have good credit so financing won’t be a problem.

You can always pay it off after 4 months if you like, with no penalty to the dealer. (new information to me).

Great suggestion. Adding it to my toolbox.

 

[Tucson Joe]

The dealer said I would have to wait 6 months before I could pay off the loan through Hyundai Motor Finance. I called Hyundai Finance 30 days later to ask when I could pay off the loan and they said I could pay it off now if I want with no penalties, so I did.
Don't trust what the dealers tell you!

 

[Captain Blight]

The dealer said I would have to wait 6 months before I could pay off the loan through Hyundai Motor Finance. I called Hyundai Finance 30 days later to ask when I could pay off the loan and they said I could pay it off now if I want with no penalties, so I did.
Don't trust what the dealers tell you!

If their lips are moving.................

 

[Tucsoff]

Hey guys, Let me give you some clarity on this. Hyundai doesn’t care if you pay off your loan early, but if you don’t wait at least 4 months, they charge back the rebate.

The HFS or Dealer Cash incentives CAN be held by the dealers. That’s an incentive Hyundai makes available to the dealers to incentivize them to make sales.

If you had a good buying experience, the right thing to do IMO, is to make 4 payments before paying off the car. Why do you think financing is REQUIRED to get the $500? Why not just give it to you anyway?

It’s provided by Hyundai to encourage financed sales. (Interest is another way they make a profit)… if you pay off that loan in under 4 months, the dealer must pay back the $500.

That’s why they tell you that.

 

[Tucson Joe]

The dealer should tell the customers up front that they would like you to wait 4 months before you pay it off and let the borrower decide if they want to give Hyundai more of their hard earned money.

It would be nice to know you have a choice.

 

[Tucsoff]

The dealer should tell the customers up front that they would like you to wait 4 months before you pay it off and let the borrower decide if they want to give Hyundai more of their hard earned money.

It would be nice to know you have a choice.

I mostly agree. 4 months is nothing. If you have enough resources to pay for your car directly vs finance, I’m guessing your rate is 3.5% (did I guess it exactly? That’s what mine was…)

So what are you giving up to let the dealer also get something out of it? $50 net? To allow the dealer to not have to repay the $500?

See the title of this thread… if the salesman and dealer treated you well, I think it’s reasonable to reciprocate.

 

[Tucson Joe]

I believe I paid $76.00 interest, but it all depends on how much you have to finance. All rebates are aimed at getting the sale, buying a car is a business deal, not buying new friends.
I send my friends and family to my dealer if I feel that I got a deal, so the dealer will make more money.
It's your money and your choice.

 

[Tucsoff]

I believe I paid $76.00 interest, but it all depends on how much you have to finance. All rebates are aimed at getting the sale, buying a car is a business deal, not buying new friends.
I send my friends and family to my dealer if I feel that I got a deal, so the dealer will make more money.
It's your money and your choice.

If your dealer gave you the best deal AND treated you well, and they made the deal based on an expected two-sided transaction… then a couple months later they get a bill for your $500… they don’t want referrals for more $500 future losses while there’s already a waitlist to buy that car.

Again, the whole point of THIS thread was that dealers can choose their customers based on expectations. Sure that goes both ways, but (repeating) the $500 is only if you finance… because Hyundai Financial Services has an expectation of interest. They don’t care if you pay off early because they will bill the dealer.

I’m not trying to make friends with the dealer, but I think it’s reasonable to reciprocate good service or a good deal.

To each their own. I liked my deal, so I can wait 4 months so Hyundai sold a car, and the dealer doesn’t have to pay my $500 coupon.

 

[Tucson Joe]

It's your money, give it away if it makes you happy.

 

[Tucsoff]

I hear you, but there are dealers in my area who don’t even acknowledge the $500. They don’t offer it (the dealer doesn’t have to participate). I can see why not… they can keep the $500 instead of making it part of the deal, and in some cases… like yours… they find themselves on the hook for the $500 afterwards.

At a time when some dealers are charging obscene market adjustments, if I find one who isn’t… AND they let me have the “dealer cash”… I’m okay to give Hyundai $50-75 in interest as a courtesy to a cool dealer. Different strokes. 👍

 

[Tucson Joe]

Again, it's your money!

 

[Tucsoff]

The restaurant owner doesn’t care if you tip the waiter. It’s definitely cheaper to just put a $0 there. Then you have more of your money.

That’s definitely a win if that’s the only goal.