hey everyone welcome back to the channel
I hope you are having a fantastic day
again another little jury day here in
Louisville right before Thanksgiving and
I want to say thank you so much for all
the love you've been doing in the last
videos this video is just to kind of
give back to you and some of the scams
that car dealers do with your down
payment the video I'm going to show you
was recorded in my car I know I'm gonna
get some people out there to say hey
listen why are you recording in your car
it's unsafe ah well I did have a camera
mounted in there and obviously I'm not
gonna do anything to jeopardize my
safety or anybody's safety out there are
usually don't record videos for YouTube
in my car like that but in this case I
did because I was recording this video
for the private only members group of my
youtube section so if you'd like to
become a member of it there is a join
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link in the description so I do kind of
things like this all the time for the
members only section of the channel I
try to interact with those people a
little bit more one-on-one and obviously
there's a cost to do so so it's a way to
support my channel as well so I'm going
to show this video in its entirety no
cuts from what I publish to them I just
want to be able to show you so you can
see something I do for the members only
section and of course if there's
anything I can ever do don't hesitate to
reach out to me at chevy.com don't
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watch here's the video enjoy good
morning Chevy dude
insiders member's group I told you I
would do behind the scenes as part of
your membership with the channel well
I'm gonna do this video down the road
I'm gonna give you some insight on car
buying process before I release it to
the public so money down you hear me
talk about money down all the time it's
very very important with money down when
I
I'm coming to you and saying I want
money down it's for one reason that's to
benefit you the most however there are
many dealerships out there who want
money down to create gross profit and
their car deal and you're like well how
does me putting money down create gross
profit for the car dealership it's kind
of confusing right well the car business
is a little confusing it's sad that it's
confused it should be more transparent
should be more easier to buy a car but
this is how money down helps the
dealership make more money on your car
purchase tip number one money down
automatically decreases the monthly
payments so therefore if you walk in and
say hey I've got five thousand down and
I've got you know X amount of you know
payment blah blah blah they're gonna
hear that but they're probably going to
ignore it so what's gonna happen is a
lot of old-school dealers will pencil
you pencils when you take the first
numbers out to you so I got in the
industry the trade the terminology is
called pencil so when they pencil you
your payment they're typically going to
come at you with 30% down yes 3 0% down
where most people are not putting big
money down that creates a wave in their
thought process a hiccup if you will and
now that customer is going to be focused
on other things rather than the things
they should be concerned about so
they're gonna be focused on the down
payment they're not gonna be focused on
the payment they're not going to focus
on the price or not gonna be focused on
several factors so when the dealership
pencils you at 30% down you're like oh
wait a second I'm not putting $12,000
down I don't I don't have any money
whatever the case may be I only have a
thousand I told you up front I've got
2,000 whatever the case may be that's
that's what that is so that gets you to
focus on that so that way they can sit
there and be like okay perfect
if you can do 2,000 down at a 400 our
payment will make that happen after a
long process so with that being said if
you think that have got you to $400 a
month with 2,000 down the very first
time they should have done so but they
don't because they set there and play
the games and see how much money they
can get out of you Oh tip number two for
how dealerships create gross profit with
your money down would be with the bank
so obviously with the bank's loaning
money they reward you with several
factors obviously credit be in one of
those but we're going to talk about that
today they're gonna reward you as a
consumer with big money down
loan-to-value being an eighty percent or
lower they're gonna rewards you with
better interest rates so therefore if
the dealership can work out with banks
to get lower interest rates says you can
only get 4.9 it's your dealership well
they can get 4.25 they can mark that
loan up and make money on you now that's
not a bad thing if you're not eligible
to get 4.25 and the dealership can get
you for nine what the dealership make
the money right I get it
we all want to save money we all don't
want to spend the money we don't want to
I get it a hundred percent but the fact
of it is it does help them out because a
lot of dealerships now will sit here and
have flat systems set up with the banks
and that means that regardless of what
rate they tell the dealership they pass
that rate along to you as well so
therefore if they can get 4.25 percent
then they're gonna pass it on to you
because it doesn't make them any more
money to mark up the rate so that's
something that's changed a lot in the
last few years but it does still happen
and that's the way they also make money
on you is with the rate tip number three
it's all about leasing leasing is the
best way dealerships can make gross
profit off you with your money down so
the biggest thing with leasing is these
are a lot of terminology that you're not
used to selling price is now capitalized
cost reduction so so that's a
terminology on a sales contract that you
simply just don't understand or don't
see so you just look at it and you move
on typically there's no sales tax on
leases sales taxes based off the payment
not the price of the vehicle
so the sales tax is a lot lower so if
you see a goofy number in or around the
sales tax number they can kind of hide
money in there and you know you were
paying profit off of that as well also
it allows them to sell the vehicle at a
much higher price so if you're if you're
looking on the internet and the
dealership even minds to speak has a has
a price of twenty nine thousand dollars
on a vehicle with all the manufacturer
rebates well those rebates do not
calculate over to a lease
now rebates don't create grossa for a
dealership yet I'll tell you about that
here in a second they are from the
manufacturer and they set there and help
you with the cost of the car well when
you go to at least those don't transfer
over there only for the actual retail
purchase so with a there are a few
rebates sometimes on a lease it's called
capitalized cost reduction as well so
it's a two term two terminologies for
the same thing for different things at
the same terminology for separate things
is what I meant to say so
so that's confusing as well so they can
create their or they can set their
insult for hire MSRP because you don't
know what you're looking for number four
let's say you've got a trade cash down
can definitely affect what your trade is
worth so let's say you've got a trade
worth $5,000 lesson at last let's do
this let's say you have a trade worth
$20,000 and the dealership knows you
have X amount of money down they know
you have certain payment and they can
get there but they only give you $18,000
for your trade now I've talked about
this on trade and secret video that I've
done that's done really really well back
in the summer so it's called scoopy your
trade or it's called a holding under
trade scooping something else so it's
called holding on the trade and that's a
way they can make money so if you're one
to four in our payment you have a twenty
thousand dollar car and they can get
there with only using eighteen thousand
dollars of the value of your car they
certainly will do it because that just
increased their profit by two thousand
dollars and number five this is a tricky
one this is completely 100% unethical
but it happens every single day with
your money down again with proper
qualifying proper interview proper setup
from the salesperson they can figure out
all the information on your deal and if
there are rebates on the vehicle that
they have not fully disclosed they can
scoop the rebate remember a huge scoop
earlier in the video I was thinking this
part of the video through is I ad-lib
everything and I don't script anything
out so yes so they can scoop rebates
which in case would be profit to the
dealership now scoopy rebates is 100%
wrong it's maybe borderline illegal and
definitely dealership manufacturers do
not want you to do it as a dealership so
there's hidden ways that dealerships do
it there's all sorts of hidden ways that
can I could talk probably three hours of
how dealerships hide money from the
consumer and stuff like that it's just
difficult that's why I do these videos
to better inform you when it comes time
to purchasing a car so there's your five
tips on how dealerships make money based
off of your down payment I'm gonna do a
better video on this down the road it's
a published but this is you know kind of
a while I'm driving the work type thing
and kind of you know detail-oriented but
not so much you know I got some mistakes
in here and hiccups and stuff like that
and I just don't feel like editing for
you guys because you guys are the best
and I really appreciate you being part
of the channel if there's anything I can
do out if there is anything I can do for
you just reach out to me Chevy do.com
have a great day and drive safely