It's the same in the US. They offer you a total deal expecting to make money on selling the loan. If you pay cash they charge you more for the same deal so they make their money. Car dealerships in general offer no real value and just make things cost more.
this post was submitted on 03 Dec 2023
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Car dealer is the #1 job of the 1%. Car dealerships are the backbone of facist support in North America.
Look into the United Conservative Party's corporate donors if you don't believe this.
Canada Drives moved to a finance only model too. To even look up cars on their site, you need to submit a finance pre-approval
Nothing stopping you from getting the financing price and then just paying off the loan right away.
Some loans do have cost penalties for that, though
I've never heard of a car loan in Canada to be anything other than an open loan.
In NY there is no early repayment penalty however some states do. It's a broken ass system.
This is the best summary I could come up with:
After test-driving a 2021 Jeep Compass at a Toronto dealership, John Hussey had the money in his bank account to buy it outright — but his daughter says he was told he could only drive it home if he financed it.
Cost of Living reached out several times to Canada's largest lenders: Scotiabank, CIBC, RBC, BMO and TD for more information about the commissions they give dealerships, but their spokespeople either did not respond or declined to comment.
While Maitland said financing is a "big revenue source" for dealerships, he doesn't turn away customers who want to pay cash because he thinks that would tarnish his "long-term relationship and reputation."
George Iny, director of the Automotive Protection Association, said forced financing is a reaction by dealerships to the Canadawide vehicle shortage that cropped up during the pandemic because of supply chain problems.
Vancouver resident Bryan Balmer and his partner, Dan West, wanted to buy a 2020 Volkswagen E-Golf last fall from a local dealership and made three cash offers on the spot.
However, there are some jurisdictions — such as Nova Scotia and the Northwest Territories — where provincial consumer protection laws do not prohibit dealerships from charging customers a fee for paying off their loan early.
The original article contains 1,113 words, the summary contains 200 words. Saved 82%. I'm a bot and I'm open source!
I've never known anyone who had enough cash to buy a car outright. How common is it?
Edit: I meant to say a brand new car. I know it's common for used cars.
My wife and I once had enough saved up to buy a used car from the dealership. The sales manager told us their incentives were structured around financing, so paying cash up front wouldn't count towards their monthly sales figures, and to them it was "useless".
Ended up financing with an open loan and paying it off, in full, on the first payment. Probably lost them ~$1000 in processing fees but they knocked off another $150 for my first interest payment.
Yeah, someone pointed it out here already that most loans have a penalty if you pay it off right away. Penalty might still be cheaper than paying off the loan on schedule.
I'll need a source about that "most" loans having a penalty. I thought the vast majority of car loans were open loans. At least, the couple of times I looked around for car financing, most were.
I've never not had a car payment. I have put 500 toward a payment or I've put it in a high interest savings account since i was 19. I've gotten incredibly lucky with cars that have never blown up. Every 5 years i buy a new car with cash. I'm 41 and for the first time ever I'm choosing not to buy a new car. I currently have a 2018 WRX limited that's stock with 65k miles. I desperately want a Corolla GR but the price and interest rate makes it just a stupid decision. I've been quoted 25k for my WRX (it's pristine, like not even a swirl, I'm ocd with my detailing) and it's not even half the price of a base GR here because of the dealer markups ( if they are ever in stock ).