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CAR BUYER WITH CASH? CAR DEALERS DO NOT LIKE CASH BUYERS! THEY LIKE CAR OR AUTO LOANS! SUBSCRIBE ON YOUTUBE / kevinhunter #Car #dealership #cars #usedcars #carsforsale #TheHomeworkGuy THE BEST CAR BUYING ADVICE YOU CAN FIND is published by The Homework Guy Team (THG)! We’re the team of Auto Experts, Finance Gurus, and Car Pricing Strategists that well over 45 Million Car Buyers have come to know and trust. VISIT OUR WEBSITE: https://thehomeworkguy.com WANT TO LEAVE A TIP FOR THE HOMEWORK GUY TEAM? https://www.paypal.me/consumeradvice or https://cash.app/$TheHomeworkGuy WE THANK YOU IN ADVANCE! WE APPRECIATE YOU SUPPORTING OUR MISSION! JOIN US ON OTHER SOCIAL MEDIA! Facebook: / thehomeworkguy Twitter: / thehomeworkguyz HASSLE FREE CAR BUYING SERVICE Available now! Click here to get started: https://thehomeworkguy.com/thg-team-c... 1. There’s a Loss of Profit from Financing As Kevin has pointed out, dealers these days make a significant portion of their profit through financing. When a customer finances through the dealership, the dealer typically earns a commission or a "finance reserve" from the bank or lender. Cash buyers wipe out this profit opportunity. Let’s dive into that a bit more. The amount of EXTRA money a car dealer makes on a financed car varies depending on the specific financing arrangements, the dealer’s relationships with lenders, and the additional products sold during the transaction. However, on average, dealers can make between 1% and 3% of the total loan amount in "finance reserve" or commission from the lender. That’s on top of everything else! When factoring in other upsells, like warranties and other junk add-ons, the dealer's profit can increase significantly. In a moment, we’ll dive into a breakdown of how much more a dealer might make percentage-wise on a car deal. On the list of why dealers don’t like cash buyers at # 2. No Add-ons Incentive Dealers often upsell additional products like extended warranties, service packages, gap insurance, paint and fabric protection packages, and other extras when buyers finance. These add-ons increase the overall loan amount, benefiting both the dealer and the lender. Cash buyers, however, are less likely to purchase these extras because they're more focused on the final cash price.They know how much money they have to spend, and they generally can’t be pushed to spend more. You should know that Profit from Add-ons and Upsells are big because Dealer cost on these items are in the 20% to 50% range maximum, depending on what the add-on is: We’re talking about products like: Extended Warranties and Service Contracts: Dealers make substantial profit from selling extended warranties and service contracts. The profit margin on these products can be anywhere from 50% to 60%. For example, if a dealer sells an extended warranty for $2,000, they easily earn $1.000 to $1,200 in profit on just that one product. Gap Insurance: Gap insurance is another high-margin product. Dealers typically charge anywhere from $500 to $1,000 for gap insurance, but the actual cost of this insurance to the dealership is the $300-$600 range, depending on what type of GAP policy it is, leading to a typical profit margin of 40% or more. Other Add-ons: Items like paint protection, fabric protection, tire and wheel protection, or anti-theft devices also come with high markups, with profit margins even ranging near 100%. These extras can easily add another $1,000 to $3,000 in profit for the dealership, depending on what the customer agrees to purchase. #3. Reason dealers don’t like cash buyers: The Dealer has Less Control Over Pricing Financing deals allow dealers to be more flexible with pricing. They might offer bigger discounts on the car itself because they know they’ll make up for it with financing profits. Cash buyers, on the other hand, typically negotiate harder on the vehicle price because they’re looking for the best deal upfront, and they know how much money they have to spend.