Live deadbeats

You know those “buy-here-pay-here” used-car lots? They’re hoping you don’t pay, here or anywhere else:

If the downpayment-plus-interest is high enough, every buyer who defaults is a source of profit: you have what he’s paid to date plus you have the car back to resell. Since most of the cars are older and already past their point of steepest depreciation, your biggest expense is the fees for the repo man and the detailer.

I’ve actually had the experience of trying to buy a car from one of these guys for straight cash, 100% of the price on the barrelhead… and being turned down because I wasn’t going to be paying 12%+ interest for half a year and then defaulting on the note.

Similarly, at least once a week on Yahoo! Answers some poor shlub will ask some variation of “If I’m paying cash for my car, how much discount can I expect?” He is always surprised to hear that the answer is none: the dealer is hoping to make some money off the financing, and if you take that revenue source away, he’s going to make it up somewhere else.

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