Balloon Auto Financing Smart Alternative To Leasing

Top Dealership Scams

If you're looking for balloon auto financing, chances are you either have dealt with a dealership recently or soon will. Make sure you're not getting taken advantage of by reading up on the top dealership scams.

  1. "Your credit disqualifies you for the best rates." Dealers will almost always try to make your credit appear worse than it really is. They do this so they can bamboozle you into higher interest rates on financing. This is part of the reason why you would be better off securing third-party financing, such as balloon auto financing.
  2. Lumping all transactions into one. Dealers love nothing more than to negotiate all three components of a car-buying transaction (financing, trade-in value, and the new vehicle price) at once. Lumping everything into one allows them to dangle one low number in front of you while disguising the fact that they are simultaneously inflating (or deflating, in the case of trade-in value) the other numbers. Negotiate each of these transactions separately or get balloon auto financing from a more trustworthy third party.
  3. The MSRP myth. You will always only see the MSRP of the car on the vehicle window. This number is basically meaningless because it is nothing more than an inflated suggestion. What you should be concerned about is the invoice price, or what the dealer paid for the car. Find out this number and work your way up.
  4. The 0% financing illusion. You will sometimes have the option of 0% financing or a cash rebate. Always choose the cash rebate. The hidden costs of 0% financing are significant because the dealer has to compensate for the profit lost in the financing deal. Often, 0% financing means you have to pay sticker price for the car, which is not worth it. You're better off with independent balloon auto financing.
  5. "I'm losing money on this deal." You will hear this line when the dealer doesn't want to go any lower on the price of the car, and you should never believe it. If they try to substantiate this claim at all, the figures they show you to "prove" they are losing money on the deal are not accurate. Dealers get their profit from all kinds of sources, including manufacturer holdbacks or cash incentives...neither of which they will tell you about.

 

Balloon auto financing can offer all of the aforementioned benefits of leasing, but better.

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