Why Do Car Sellers Prefer Loans Over Full Payment?

[Don]

Because 4S stores have cooperative agreements with banks and financial institutions, as long as they recommend customers to apply for installment loans, the 4S store can receive a certain percentage of rebates. Here is relevant information: Extended information: Buying a bare car is the most cost-effective, eliminating middlemen from profiting from the price difference, but ordinary consumers are also unfamiliar with purchase tax and license plate details, making the process more time-consuming. Purchasing only the bare car and handling taxes and license plates oneself is an approach taken by very few 'experts.' What consumers care most about when buying a car is the price. However, it is not necessarily true that the lower the all-inclusive price, the more cost-effective the car purchase is. The so-called all-inclusive price refers to the basic costs required for the car to be licensed, including vehicle purchase tax, vehicle and vessel tax, and compulsory traffic insurance. There may very well be other charges as well.

[BeauLynn]

Last time I went to buy a new car, the salesman's expression changed as soon as he heard I wanted to pay in full. He explained that their dealership prefers financing because it makes them more money. He admitted that loans help them earn commissions, especially from incentives provided by banks or financial companies. If a customer finances the car, the salesman can make an extra few hundred or even thousands of dollars. Additionally, financing allows the dealership to upsell other products, like extended warranties or value-added services, because customers feel the monthly payments are more manageable and might opt for more expensive models. From this experience, I learned not to blindly trust sales pitches when buying a car. Insisting on paying cash might make them less interested, but it saves money in the long run. Overall, as an average buyer, I understand this is just business, but I also want to remind everyone to calculate the total cost—interest from loans can add up to much more than paying upfront. Don't be fooled.

[VonQuinn]

I've noticed that car dealers prefer loan customers, and it's actually because they benefit in two ways. On one hand, loans help the dealership quickly recover funds without waiting for customers to pay a large sum upfront, allowing them to sell more inventory cars. On the other hand, many manufacturers offer bonuses to dealers through financial partnerships—if a car is sold via loan, the additional rebates increase the salesperson's income. As someone who has been driving for several years, I often discuss this on forums. It seems that if a customer opts for full payment, salespeople feel pressured, fearing they might lose commission opportunities. My advice is to understand these mechanisms before buying a car—don’t just go for convenience. While loans may seem easy, hidden costs like insurance and handling fees add up. My experience is that scrutinizing contract details can help avoid regret.

[CharlotteFitz]

As a nosy person, I once chatted with a car dealership employee who revealed that loans drive the entire profit chain. The dealership gets interest splits and third-party incentives, while cash purchases only earn the base price, resulting in an indirect loss of income. I remember him giving an example: selling a car with financing can earn an extra 30% profit, which makes salespeople enthusiastically push financial packages—sometimes even overlooking the vehicle's quality issues. Buyers should stay vigilant—don't just focus on discounts; assess your financial situation carefully!