Financing a Rolex

[ingoodtime]

Originally Posted by Rookhawk

I agree, it's exceedingly boring and I'm the author!

I just got sick of the emotion and the banter about this topic going over and over again on the forum. I posted what I believe to be the facts. Many will know what the facts are already (cash is king) and act accordingly, others will say "but I want it now even though I can't afford it" so the above info can help them calculate the true cost of their impulses.

People do incredibly silly things because they don't understand Present Value and Opportunity Cost.

In oct 2009, I purchased my SS GMTIIC at a smaller AD. I got 1 year 0% interest AND 15% off msrp for a final price of 6301.01 out the door. I made sure to pay it off in time.

[Lmbeauleap]

Originally Posted by robk215k

Dude...you're STILLLLL Missing the point that the AD has ZERO to do with the financing. They net the SAME EXACT amount whether you finance or plunk down cash. If they use GE and you finance 10,000 at zero %, GE is giving them $10,000 and hoping you default.

I used to sell these programs to retailers and we almost always charged them even more than the credit card interchange fee. I have no experience with Rolex dealers but many jewelry stores. 3% was the normal "same as cash" fee to the dealer. How they negotiated this fee with their customers was up to them. I would think GE is charging a Rolex AD. There must be someone on this forum who could tell us for sure.

Actually the few exceptions where we waived the fee were the retailers where the buyers almost always went beyond the 6 months and into payments with interest. Low end furniture comes to mind. I would guess Rolex dealers would get charged the fee because I can't imagine many of these type of buyers would end up paying the interest.

My banker two cents....

[MoBe]

Originally Posted by Lmbeauleap

I used to sell these programs to retailers and we almost always charged them even more than the credit card interchange fee. I have no experience with Rolex dealers but many jewelry stores. 3% was the normal "same as cash" fee to the dealer. How they negotiated this fee with their customers was up to them. I would think GE is charging a Rolex AD. There must be someone on this forum who could tell us for sure.

Actually the few exceptions where we waived the fee were the retailers where the buyers almost always went beyond the 6 months and into payments with interest. Low end furniture comes to mind. I would guess Rolex dealers would get charged the fee because I can't imagine many of these type of buyers would end up paying the interest.

My banker two cents....

Once again proof,this time from a banker,that fees are involved and once again I wonder if most consumers can figure out who pays for the fee.

You can be sure that if the AD tells you that the finance is 0%,with no charge to you the buyer,that it`s a verbal shell game your playing,do you really believe that the AD is going to tell you that there`s a transaction fee baked into the retail price of your watch???

I learned a long time ago that there`s no Santa Clause.

[rr-nyc]

Originally Posted by MoBe

Once again proof,this time from a banker,that fees are involved and once again I wonder if most consumers can figure out who pays for the fee.

You can be sure that if the AD tells you that the finance is 0%,with no charge to you the buyer,that it`s a verbal shell game your playing,do you really believe that the AD is going to tell you that there`s a transaction fee baked into the retail price of your watch???

I learned a long time ago that there`s no Santa Clause.

Another misinterpreted, nonsensical post. Ask your daddy to explain it to you since you are incapable of understanding a basic concept. The dealer may or may not pay a fee. If they do, it comes out of their profit margin as a cost of doing business. One thing is for sure, the watch isn't more expensive to the consumer like you think. And I use the term "think", as it refers to you, very loosely.

[witch watch]

Originally Posted by MoBe

Once again proof,this time from a banker,that fees are involved and once again I wonder if most consumers can figure out who pays for the fee.

You can be sure that if the AD tells you that the finance is 0%,with no charge to you the buyer,that it`s a verbal shell game your playing,do you really believe that the AD is going to tell you that there`s a transaction fee baked into the retail price of your watch???

I learned a long time ago that there`s no Santa Clause.

Totally lost on me is this due to.
Watch 'A' cash price £5000 say
Watch 'A' 0% finance price £5000.

Can't 'see' the fee in that anywhere

[Lmbeauleap]

Originally Posted by witch watch

Totally lost on me is this due to.
Watch 'A' cash price £5000 say
Watch 'A' 0% finance price £5000.

Can't 'see' the fee in that anywhere

My local AD told me credit card price OR price with 0% financing (with Wells Fargo) would be higher then if I just paid cash. They wouldn't give any wiggle room because he said they paid a fee for it.

Some dealers may be getting the 0% financing for free and others not. This wouldn't be a Rolex issue it would depend on each of your markets. Probably why there is so many different experiences on this issue.

[rr-nyc]

Originally Posted by witch watch

Totally lost on me is this due to.
Watch 'A' cash price £5000 say
Watch 'A' 0% finance price £5000.

Can't 'see' the fee in that anywhere

You are right on!

Do you know why you or any other reasonable adult can't see the fee, if any? Because the dealer is paying for it by cutting into their margin. Mobe thinks that if you buy a watch for $10,000 but want the 0% financing, it costs YOU, the customer, $12,000.

[rr-nyc]

Originally Posted by Lmbeauleap

My local AD told me credit card price OR price with 0% financing (with Wells Fargo) would be higher then if I just paid cash. They wouldn't give any wiggle room because he said they paid a fee for it.

Some dealers may be getting the 0% financing for free and others not. This wouldn't be a Rolex issue it would depend on each of your markets. Probably why there is so many different experiences on this issue.

It's because the AD would pay a processing fee for the use of a credit card transaction so they can pass that savings to you but as I said in another post, you could use that opportunity as a jumping off point for a bigger discount regardless of cash or credit.

[Lmbeauleap]

Originally Posted by rr-nyc

It's because the AD would pay a processing fee for the use of a credit card transaction so they can pass that savings to you but as I said in another post, you could use that opportunity as a jumping off point for a bigger discount regardless of cash or credit.

But he also pays a processing fee for giving customers 0% financing. Actually a little bit more than the credit card fee even. It sounds like your dealer has negotiated free (to them) 0% financing where mine has to pay 3% of the purchase price for it.

Your dealer is a better negotiator than mine!

[witch watch]

Originally Posted by rr-nyc

You are right on!

Do you know why you or any other reasonable adult can't see the fee, if any? Because the dealer is paying for it by cutting into their margin. Mobe thinks that if you buy a watch for $10,000 but want the 0% financing, it costs YOU, the customer, $12,000.

Exactly! And here's another thing some dealers(over here in the UK anyway) are PAID by the finance companies every time they sell finance, why? Because the finance boys know some people will default on payment(s) and it's KERCHING!! time for them when that happens, they get the constant stream of business from the AD's who in turn get the customers through the door.

So a little bit of finance with no missed payments can lead to a better credit score in the long term and no wallop to your finances in the short term, simples.

[witch watch]

Originally Posted by Lmbeauleap

But he also pays a processing fee for giving customers 0% financing. Actually a little bit more than the credit card fee even. It sounds like your dealer has negotiated free (to them) 0% financing where mine has to pay 3% of the purchase price for it.

Your dealer is a better negotiator than mine!

That's the crux of it

[SaddleSC]

[rr-nyc]

Originally Posted by Lmbeauleap

But he also pays a processing fee for giving customers 0% financing. Actually a little bit more than the credit card fee even. It sounds like your dealer has negotiated free (to them) 0% financing where mine has to pay 3% of the purchase price for it.

Your dealer is a better negotiator than mine!

Yes, and perhaps this is where true confusion is. The bank floating the money for the 0% financing needs to make money somewhere (besides the default customers) so there may be a processing fee. That fee comes out of the dealer's margin unless they want to lose business. The fee is usually less that the major credit card charge so the dealer is better off as well

[Lmbeauleap]

Originally Posted by SaddleSC

Yep. Try doing it all day every day for decades.

[ftgokie]

I didnt have much money on me the other day when I went to a local Jewelry store. I seen a Submariner that I really liked so I asked about in house financing. I usually pay cash for whatever I buy but I am saving up my rat hole money for a Daytona..

We agreed on a price $4950.00. I asked for 3 months to pay it off so I put $1500.00 down and I will pay $431.25 every 2 weeks. June 22 will be my last payment and I will walk out the door with the watch.

To me this isnt financing, its a layaway. But they called it financing. Regardless of whatever its called. I got the watch for less than the advertised price, so I am sure they are taking the hit on this transaction somehow...probably on the profit margin.

I know they made some money on me but I will be getting exactly what I want for the price I negotiated for.

But, common sense tells you that if you finance $10,000 at 0%... in the end you are paying $10,000.00....unless that 10k didnt include tax.

Thats my redneck math though....I could be wrong

[Lmbeauleap]

Originally Posted by ftgokie

But, common sense tells you that if you finance $10,000 at 0%... in the end you are paying $10,000.00....unless that 10k didnt include tax.

Thats my redneck math though....I could be wrong

But the whole crux of the discussion is whether you could have used your own cash and paid $9,700 instead. That's exactly the case at my AD. It sounds like some dealers aren't being charged to offer you the 0% financing so in that case it shouldn't affect the price at all.

So is 0% financing really free to you? IT DEPENDS! Ask your dealer and if they are honest you'll know. Both sides of this argument are correct.

[rr-nyc]

Originally Posted by ftgokie

I didnt have much money on me the other day when I went to a local Jewelry store. I seen a Submariner that I really liked so I asked about in house financing. I usually pay cash for whatever I buy but I am saving up my rat hole money for a Daytona..

We agreed on a price $4950.00. I asked for 3 months to pay it off so I put $1500.00 down and I will pay $431.25 every 2 weeks. June 22 will be my last payment and I will walk out the door with the watch.

To me this isnt financing, its a layaway. But they called it financing. Regardless of whatever its called. I got the watch for less than the advertised price, so I am sure they are taking the hit on this transaction somehow...probably on the profit margin.

I know they made some money on me but I will be getting exactly what I want for the price I negotiated for.

But, common sense tells you that if you finance $10,000 at 0%... in the end you are paying $10,000.00....unless that 10k didnt include tax.

Thats my redneck math though....I could be wrong

Thats layaway. Credit is buy now, pay later. Layaway is make payments and we'll give you the watch when you're paid up.

[ftgokie]

Originally Posted by rr-nyc

Thats layaway. Credit is buy now, pay later. Layaway is make payments and we'll give you the watch when you're paid up.

Yea I totally agree with you. They were calling it financing and I said no, thats layway...the woman wanted to argue so I just shut up. I still got what I wanted cheaper than I was expecting to pay.

My friend is in house financing his Rolex through the same Jeweler...he secured a deal on a watch for $4500 including tax. He has the watch in his possession and he has regular monthly payments over a 12 month period for 0%. After everything is said and done, he will be paying $4500.

I still told him I disagree with him financing a watch in his particular situation..but he is a grown man and can do what he pleases...to each his own I suppose.

[F&Iguy]

[QUOTE=witch watch;3106718]Exactly! And here's another thing some dealers(over here in the UK anyway) are PAID by the finance companies every time they sell finance,



TRUE statement, we in auto sales call it a flat fee(the bank pays us) and that is the reason cash is not always king of the deal.

TRF sure has some smart people This was a fun read for a finance guy

[Lmbeauleap]

Remember this thread when someone tells you they have our banking crisis all figured out.

[Kingair]

Why financing ?
Save money, pay cash and receive a nice discount.
With todays interest rates you can buy your wife a nice second hand Rolex . . . . . for free !
I wouldn't do it.

[ChristianN]

Originally Posted by witch watch

Totally lost on me is this due to.
Watch 'A' cash price £5000 say
Watch 'A' 0% finance price £5000.

Can't 'see' the fee in that anywhere

If there was no 0% financing in the whole world, the watch might've cost £4950. The cost of 0% is always, and I mean always, transfered to the party parting with money which in retail is us, the customer.

0% financing is so that you can buy what you want NOW without having the money NOW but also without, if you do pay on time, paying anything extra.

Individually, the price difference may or may not be 0% - this is true.

But as I've said before, it's not "free". Nothing ever is.

I will conceed to one thing though; "Freeloaders" can get out ahead with 0% considering the fact that it does excist in the world and the watch does cost £5000 and not £4950.

[QUOTE=F&Iguy;3107010]

Originally Posted by witch watch

Exactly! And here's another thing some dealers(over here in the UK anyway) are PAID by the finance companies every time they sell finance,



TRUE statement, we in auto sales call it a flat fee(the bank pays us) and that is the reason cash is not always king of the deal.

TRF sure has some smart people This was a fun read for a finance guy

And that's because it's not 0%. It's usually easier to get a good deal on a car with financing then with cash if you're dealing with a legitimate dealer here in Norway. If the dealer is less interested in keeping good books, cash is still king.

[MoBe]

Some people would prefer to believe that 0% financing is possible rather than consider the possibility that it`s not and it would appear that to that end the number "zero" has the power to hypnotize certain unthinking minds.

"Most men would rather die than think." (Bertrand Russell:philosopher,logician,mathematician,histori an and social critic,18 May 1872 - 2 February 1970)

[rr-nyc]

Originally Posted by MoBe

Some people would prefer to believe that 0% financing is possiblel rather than consider the possibility that it`s not and it would appear that to that end the number "zero" has the power to hypnotize certain unthinking minds.

"Most men would rather die than think." Bertrand Russell,philosopher

Here's a copy of my latest statement from Brookstone using 0% financing to buy a massage chair. Show me where I'm paying one penny in any kind of fee above a cash transaction

I'll help you out... look at the sub account info where you will see it clearly stated "...you must pay your sub account in full by Jul 06, 2012 to avoid paying accrued interest"

It looks like the only one not thinking is you

[F&Iguy]

And that's because it's not 0%. It's usually easier to get a good deal on a car with financing then with cash if you're dealing with a legitimate dealer here in Norway. If the dealer is less interested in keeping good books, cash is still king.[/QUOTE]

Sir, 0% or cash is still the same deal to you the customer. We the dealer like the financing because we get $50-$200 to sign the contracts for the bank.

[MoBe]

Originally Posted by rr-nyc

Here's a copy of my latest statement from Brookstone using 0% financing to buy a massage chair. Show me where I'm paying one penny in any kind of fee above a cash transaction

I'll help you out... look at the sub account info where you will see it clearly stated "...you must pay your sub account in full by Jul 06, 2012 to avoid paying accrued interest"

It looks like the only one not thinking is you

What this proves is that finance fees are hidden from the consumer,just like in a shell game,which is the whole point of the 0% finance scheme, crafted to trick you into believing that you`re getting something for nothing.

[rr-nyc]

Originally Posted by MoBe

What this proves is that finance fees are hidden from the consumer,just like in a shell game,which is the whole point of the 0% finance scheme, crafted to trick you into believing that you`re getting something for nothing.

Wow...

So using your logic, that means if you pay cash, you're paying for the financing as well without using it

So essentially, you would have to be even dumber to pay cash.

Congratulations, you've become the poster boy on the importance of education. I'll make sure to tell my kids to read your posts as a reminder of what happens when you dont go to college

[witch watch]

Originally Posted by rr-nyc

Wow...

So using your logic, that means if you pay cash, you're paying for the financing as well without using it

That's what i read from that and another answer posted by another member also

[Rookhawk]

Originally Posted by rr-nyc

Wow...

So using your logic, that means if you pay cash, you're paying for the financing as well without using it

So essentially, you would have to be even dumber to pay cash.

Congratulations, you've become the poster boy on the importance of education. I'll make sure to tell my kids to read your posts as a reminder of what happens when you dont go to college

Renato, you seem to always turn your posts sarcastic and condescending to others. Your posts and logic read like someone that barely squeaked into an obscure bottom tier state school followed on by a fly-by-night regional accounting program. Your mental equation that reads "agree with Renato if Not/Then = idiot" just doesn't fly.

[Rookhawk]

I was chatting with a friend this morning about some of these discussions and a couple guiding themes came up that are cause for much of the disagreement.

1. The first thing they'll teach you in Micro Economics is that there is no fee, tax or cost of business that doesn't get passed on to the customer. There are no free rides. Hence, when you buy a polo shirt at Nordstrom's for full retail ($79) you're paying for their lease per square foot, their highly paid sales staff, floor displays, advertising, financing and other costs. When you buy that same polo shirt for $34 at CostCo you're paying that price because of no customer service, no credit cards permitted, no helpful sales consultant, self service checkout, no packaging and cheap square footage.

If you didn't focus on Econ these variables don't register in your purchases.

2. If you're accounting focused, you are typically focused on the time value of money and a retroactive review of the opportunity costs of money. Accountants love low priced finance options for that reason. Accountants do not understand negotiations, they under stand the time value of money.

3. People that believe they are paying the same price cash or credit might be right, but it is only right because they are buying their wares from the lowest levels of management. The further up the management chain you negotiate, the more sensitive they are to the costs of finance and the more likely you are to get a better value for cash or shorter terms.

While not the topic of Rolexes, this is well illustrated by the Finance and Insurance Guy that posted (F&I car guy). I buy my American cars for cash, new from the dealer. I've never had a dialogue with a F&I guy in the back room because I deal with the general manager / owner and I leverage spiffs from the manufacturer. I always pay cash but then again I also pay 30% to 35% off of list as was the case with my two relatively recent purchases. A F&I guy or a salesman doesn't care about these things but the owner does. Hence, if cash or credit doesn't matter I'm talking to the wrong layer of management.