Financing a Rolex

[rr-nyc]

Originally Posted by Rookhawk

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.

And my responses differ from yours in what way? Nice try. I discuss opinion but argue fact. Plain and simple

If you consider Michigan a bottom tier school, you aren't as bright as you think. Oh, I also went to a top tier boarding school too.

Got anything else?

[witch watch]

Originally Posted by 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.

You of course are making alot of sense however i will say that:

1: Even with a cash discount from an AD all your points in #1 will be factored in.
2: I know a few and this is true lol!
3: When your talking about five digit and up amounts of £/$ and especially with car dealers(hips) then cold hard if you can for sure will net you a better score.

[MoBe]

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

If you`re sincere in your intententions for your children`s education and wish them to become contributing members of society,be sure to send them to an institution that will teach then the power of independant analytical thought.If they are so equiped then the ability to form a critical and reasoned opinion of their own might help them to avoid some,if not all,of life`s snakeoil salesmen.

[rr-nyc]

Originally Posted by 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.

I couldn't agree more with what your friend said.

To be honest, I think we're closer to agreeing that disagreeing

Lets cut through the BS here. We all know that businesses are there to make a profit. The difference between gross profit and net profit is the cost of doing business. I'm not disputing that the costs are passed on to the customer, in a basic sense, but it isn't universally the same across the board based on expense and sometimes, the business takes a hit on margin in order to do business. If I walk into a small pet store in NYC, I can expect to pay more than if I did the same in Des Moines however if I walk into the GAP on 5th Ave., I can expect to pay the same price as I would at the GAP in Wichita even though the cost of keeping the doors open on 5th ave is 4x's more.

Nobody negotiates prices Best Buy, Toys R US or Brookstone and you pay the price as marked. All of these stores offer 0% financing at least a few times a year. If you buy a $1000 camera from Best Buy and pay cash and I buy the same exact $1000 camera but use their 0% financing, we both end up paying the same amount. Assuming there is a fee that Best Buy pays to the credit provider, there is a difference on how much we paid for the same camera. I'm not arguing that the credit company does not charge fees to the retailer, I'm arguing that there is no fee passed on to me. Thus making it a a free loan.

[rr-nyc]

Originally Posted by MoBe

If you`re sincere in your intententions for your children`s education and wish them to become contributing members of society,be sure to send them to an institution that will teach then the power of independant analytical thought.If they are so equiped then the ability to form a critical and reasoned opinion of their own might help them to avoid some,if not all,of life`s snakeoil salesmen.

blah blah blah...

My dog has a a stronger argument against walking in the rain than you've had with the 0% financing. Instead of trying [unsuccessfully] to keep up it, read some of the responses and it might, MIGHT make sense.

[Steve260]

Originally Posted by Rookhawk

Amani,

I tend to agree with you, I was just pleasing the folks that think they can pull off the 8% consistent year-over-year return. (which most experts can't unless averaged over 30 years of highs and lows)

If you think you can earn 5% a year on your money, you know what your $8550 watch 0% financed for a year actual saved you by financing? $227.13, or a present value of $8,322.87.

It makes the calories burned to juggle finances for that extra few pennies seem very petty to me, but then again I'm one of those "cash is king" guys anyway.

Of course Rolex complicates things a little bit. Because they increase prices very regularly, it's likely that the $8,850 new watch today will be a $9,250+ new watch 12 months from now. Probably won't change anyone's mind, but using 0% financing is one way to "lock in" today's price on a Rolex...

Steve

[Rookhawk]

Originally Posted by rr-nyc

I couldn't agree more with what your friend said.

To be honest, I think we're closer to agreeing that disagreeing

Lets cut through the BS here. We all know that businesses are there to make a profit. The difference between gross profit and net profit is the cost of doing business. I'm not disputing that the costs are passed on to the customer, in a basic sense, but it isn't universally the same across the board based on expense and sometimes, the business takes a hit on margin in order to do business. If I walk into a small pet store in NYC, I can expect to pay more than if I did the same in Des Moines however if I walk into the GAP on 5th Ave., I can expect to pay the same price as I would at the GAP in Wichita even though the cost of keeping the doors open on 5th ave is 4x's more.

Nobody negotiates prices Best Buy, Toys R US or Brookstone and you pay the price as marked. All of these stores offer 0% financing at least a few times a year. If you buy a $1000 camera from Best Buy and pay cash and I buy the same exact $1000 camera but use their 0% financing, we both end up paying the same amount. Assuming there is a fee that Best Buy pays to the credit provider, there is a difference on how much we paid for the same camera. I'm not arguing that the credit company does not charge fees to the retailer, I'm arguing that there is no fee passed on to me. Thus making it a a free loan.

Renato,

We're close, but there is a difference in our comparison in a couple ways. Yes, you will pay less for GAP in Des Moines than you will for GAP on 5th Ave, NYC. You'll pay less because regional promotions and in-house sales are targeted to offset the less-desirable shopping experience in Des Moines. They'll also try to adjust true cost to purchase (coupons, mailers, incentives) to increase demand in Des Moines by lowering costs.

Best Buy is a better example of our difference in opinion. You state you cannot haggle at Best Buy but their products are not unique, and they exist at other locations where you can indeed get the same product for less and not absorb their costs of location, staff and finance. (e.g. Abt electronics, New Egg)

To the point of Rolex, I guess that's where we have the defining difference in my strategy and others. I won't go to a Rolex dealer that is so large, located in a very expensive piece of real estate, or that has a financing arm because I don't wish to absorb those costs into my purchase. I go to large ADs that are "not too big, not too small" and I deal with the owner on a cash basis. That's how I get a DSSD for 17.5 pts off and I get a LV Hulk for 20 pts off. It's not that I'm a better negotiator at the time in place compared to you per se, it's that I've picked a suitable target (my ideal AD) and a suitable layer of management (the owner that actually pays the 3% CC fee) as the focus of my negotiation.

[00pumpkin]

Nothing in life is free, someone is paying a "fee" for the 0% interest. Maybe it’s the AD, maybe it’s the bank, maybe it’s the consumer....either way the cost is being passed on. I’m thinking that a retailer wouldn’t mind paying the "fee" themselves and taking it out of their margin because their sales volume is greater with the 0% offering vs. without. In this case, they calculate that they will be able to make up the cost (and then some) of the 0% with increased sales in inventory.

I do however believe that cash is king and you can usually get a better deal with cash.

That being said, I financed my Rolex because I am impatient and didn’t have the cash in the bank. Not a smart financial decision by any means, but I sure enjoyed the transaction. I paid it off within a year and now I own a Rolex free and clear that they actually stopped producing a few months after I purchased it. I don’t regret a thing.

[Rookhawk]

Originally Posted by Steve260

Of course Rolex complicates things a little bit. Because they increase prices very regularly, it's likely that the $8,850 new watch today will be a $9,250+ new watch 12 months from now. Probably won't change anyone's mind, but using 0% financing is one way to "lock in" today's price on a Rolex...

Steve

Steve,

Your point is a sound counterpoint towards financing a Rolex. While it may not apply to all goods, I'll give you credit for that answer and it should be put in the "pros of finance" column considering Rolex increases prices about 3% year over year.

[rr-nyc]

Originally Posted by Rookhawk

Renato,

We're close, but there is a difference in our comparison in a couple ways. Yes, you will pay less for GAP in Des Moines than you will for GAP on 5th Ave, NYC. You'll pay less because regional promotions and in-house sales are targeted to offset the less-desirable shopping experience in Des Moines. They'll also try to adjust true cost to purchase (coupons, mailers, incentives) to increase demand in Des Moines by lowering costs.

Again, without getting into the weeds and veering off topic, I'm talking about full priced retail items from the GAP from a consumers standpoint and not the company's shifting cost centers and the like. If I'm looking for a V-neck tshirt, I know I can go to the GAP, anywhere in the country, and pay expect to pay $19.99 (just a number because I don't really don't shop at the GAP).

Originally Posted by Rookhawk

Best Buy is a better example of our difference in opinion. You state you cannot haggle at Best Buy but their products are not unique, and they exist at other locations where you can indeed get the same product for less and not absorb their costs of location, staff and finance. (e.g. Abt electronics, New Egg

I realize I can price shop other stores for better prices. Sticking with the 0% financing and the costs associated with it. Cash or 0% credit at Best Buy are the same for the consumer. The costs for the credit, if any, are absorbed by margin. They are not passed on to me which has been my position all along.

[scarab007]

can we get this thread closed out? Seriously this is out of control and the back and forth is stupid. If any of you would like, call me, I will put you in touch with someone that will put this topic to bed. VP of GE Capital on the consumer credit side. Let me know who wants to talk with him and get the straight answer and not this back seat financing.

[Lmbeauleap]

Since you used Best Buy as an example, I know how much Best Buy gets charged for their financing and I know how they build it into their pricing. It's always there and it's always a cost of their ENTIRE inventory. Let's say you find a sweet deal for $500 (no difference if it is cash or credit) on something that usually costs $700. It's because they are dumping inventory rather than writing it off at an even bigger loss.

BUT, they WOULD have priced it at $490 if they didn't have the cost of their financing program and credit card fees. And trust me it's a big a$$ number. It's always there. Everybody paid an extra $10 across the board whether you believe it or not. You, the consumer, didn't notice it because you got a great deal. You saved $200 and wouldn't have any idea there was another $10 on the table if you could wave a wand and make financing go away. It's just deeper then "the price is the same". It's accounting. When I hear about "cash rewards" or "0% financing" or "travel rewards" I think to myself how much that just cost me as a cash buyer. And there is not a damn thing we can do about it.

So go ahead and finance it with Best Buy when you find a great price because yes, it is the same. But if you found a cash only dealer in the same inventory situation at the exact same time with the exact same profit motive, you could save $10.

Okay, the end for me on this.

[ChristianN]

Originally Posted by Lmbeauleap

Since you used Best Buy as an example, I know how much Best Buy gets charged for their financing and I know how they build it into their pricing. It's always there and it's always a cost of their ENTIRE inventory. Let's say you find a sweet deal for $500 (no difference if it is cash or credit) on something that usually costs $700. It's because they are dumping inventory rather than writing it off at an even bigger loss.

BUT, they WOULD have priced it at $490 if they didn't have the cost of their financing program and credit card fees. And trust me it's a big a$$ number. It's always there. Everybody paid an extra $10 across the board whether you believe it or not. You, the consumer, didn't notice it because you got a great deal. You saved $200 and wouldn't have any idea there was another $10 on the table if you could wave a wand and make financing go away. It's just deeper then "the price is the same". It's accounting. When I hear about "cash rewards" or "0% financing" or "travel rewards" I think to myself how much that just cost me as a cash buyer. And there is not a damn thing we can do about it.

So go ahead and finance it with Best Buy when you find a great price because yes, it is the same. But if you found a cash only dealer in the same inventory situation at the exact same time with the exact same profit motive, you could save $10.

Okay, the end for me on this.

The voice of reason in crazy times.

Thank you for putting into words what I've been trying to communicate myself.

[rr-nyc]

Originally Posted by Lmbeauleap

Since you used Best Buy as an example, I know how much Best Buy gets charged for their financing and I know how they build it into their pricing. It's always there and it's always a cost of their ENTIRE inventory. Let's say you find a sweet deal for $500 (no difference if it is cash or credit) on something that usually costs $700. It's because they are dumping inventory rather than writing it off at an even bigger loss.

BUT, they WOULD have priced it at $490 if they didn't have the cost of their financing program and credit card fees. And trust me it's a big a$$ number. It's always there. Everybody paid an extra $10 across the board whether you believe it or not. You, the consumer, didn't notice it because you got a great deal. You saved $200 and wouldn't have any idea there was another $10 on the table if you could wave a wand and make financing go away. It's just deeper then "the price is the same". It's accounting. When I hear about "cash rewards" or "0% financing" or "travel rewards" I think to myself how much that just cost me as a cash buyer. And there is not a damn thing we can do about it.

So go ahead and finance it with Best Buy when you find a great price because yes, it is the same. But if you found a cash only dealer in the same inventory situation at the exact same time with the exact same profit motive, you could save $10.

Okay, the end for me on this.

I'm only addressing full priced items in order to stay on point. Best Buy anticipates that cost of credit by reducing their margin, not by building it into pricing. Best Buy or any other retailer wouldn't sell a single Sony TV if they added 3% for their credit card processing. If a Sony TV has an MSRP of $1000, its selling for $1000 or less... but not more.

I'm not arguing against the idea that financing costs money because its obvious the banks lending it wouldn't be in it. I am arguing against the idea that the person who takes the 0% financing pays for it (in some sort of shell game, as MoBe suggests) when in fact, they don't... If anything, the company subtracts it from margin or everyone pays for it, including cash payers.

[Lmbeauleap]

You are seeing this from the point of the consumer. Instead, think like the share holder. Nothing gets ever gets subtracted from margin. They START with the end margin goal and work backwards adding all the costs on top until they get to the end pricing you pay. Think about it this way. Before credit cards, lets say company "X" had 8% ROI. Do you think all their investors just settle for 5% average return now? Or did they gradually raise prices a couple percent as plastic fees kicked in over the years?

Best Buy knows exactly how many people use plastic or financing and how much it costs so they just average it all out and add in X% for everything from CD's to TV's. That always comes in under MSRP because the manufacturers also know this number. The check the retailer sends the manufacturer, or the "invoice" if you will, is all that matters.

[rr-nyc]

Originally Posted by Lmbeauleap

You are seeing this from the point of the consumer. Instead, think like the share holder. Nothing gets ever gets subtracted from margin. They START with the end margin goal and work backwards adding all the costs on top until they get to the end pricing you pay. Think about it this way. Before credit cards, lets say company "X" had 8% ROI. Do you think all their investors just settle for 5% average return now? Or did they gradually raise prices a couple percent as plastic fees kicked in over the years?

Best Buy knows exactly how many people use plastic or financing and how much it costs so they just average it all out and add in X% for everything from CD's to TV's. That always comes in under MSRP because the manufacturers also know this number. The check the retailer sends the manufacturer, or the "invoice" if you will, is all that matters.

The topic of the of 0% financing was regarding the cost to the one financing, not to the retailer. I'm looking at this from a consumer standpoint and does is the thread, I don't know why we need to get into the back office operations of a retail store to prove the point of 0% interest means zero additional cost to the buyer.

Every company has gross/net margin goals. Resellers or retailers don't make the MSRP, the manufacturer does, so there is a fixed gross margin from the start. So they have nothing else BUT to back out margin, not build up to one

[F&Iguy]

Originally Posted by Rookhawk

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.

1.cash or credit (0%) same cost to you mr. or mrs. customer

2.I think your wrong about a better deal with the owner/gm. It's funny when we get those deals his FRIENDS end up paying a little more money.

3. who buys a car today off list or MSRP ? there is a true cost for everything we buy and just saying but I'm starting there.

[Rookhawk]

Gents,

I don't think we're going to get much further here because we approach our negotiations (dare I say world view?) differently.

Before we wrap a bow around this thread, might I suggest we assemble a few views and put them up for posterity's sake?

Would F&Iguy, rr-NYC, Lmbeauleap and ChristianN be willing to create a narrative as to how they go about getting the best value on a rolex? I think the different approaches could be used as a framework by different readers to attempt to get a good value on their next watch.

Are you game?

[F&Iguy]

Sir, rolex is why we are all here

[MoBe]

Originally Posted by Rookhawk

Gents,

I don't think we're going to get much further here because we approach our negotiations (dare I say world view?) differently.

Before we wrap a bow around this thread, might I suggest we assemble a few views and put them up for posterity's sake?

Would F&Iguy, rr-NYC, Lmbeauleap and ChristianN be willing to create a narrative as to how they go about getting the best value on a rolex? I think the different approaches could be used as a framework by different readers to attempt to get a good value on their next watch.

Are you game?

I applaud your effort but I think this one has run it`s course and if there is to be any further discourse it`s likely to be more of the same.

We shall see.

[Rags]

Sorry OP but I can't concentrate that long. Brain cells burnt out from the seventies...

[Lmbeauleap]

Originally Posted by Rookhawk

Gents,

Would F&Iguy, rr-NYC, Lmbeauleap and ChristianN be willing to create a narrative as to how they go about getting the best value on a rolex? I think the different approaches could be used as a framework by different readers to attempt to get a good value on their next watch.

Are you game?

Yeah I think that would be beneficial as I think in the end we're all just trying to get the most for our money. Don't see what it can hurt I guess. Here's mine:

1. Negotiate the price without discussing how I plan on paying for it.

2. THEN ask about financing. If there is no difference in price something is amiss. The dealer is for sure paying a fee for the credit card and most likely also paying a fee to offer me 0% financing. If the selling price is the same regardless, that means my cash price is inflated compared to the guy behind me in line choosing to finance it. Why wouldn't he discount me this fee he didn't have to pay? His net profit would end up exactly the same. Is the guy behind me, who finances it, better than me or something? If the dealer won't accept that same profit margin with me I would lose trust.

3. If he tells me credit card price is more but 0% financing is the same because they negotiated it free with some bank... that's different. I might think about using the bank's money for free for 6 months, but probably not.

4. Logon here and buy from our trusted sellers and just pay cash. Use the savings to buy my next Rolex.

6 or 12 months interest if I could keep it in savings is like $15-$30. Why jack around with all the hassle? Maybe if I had some investment that is likely to make me $300-$400 during that time but there aren't many of those these days.

[TimingIsEverything]

Originally Posted by Rookhawk

I thought I'd put this thread up since lots of people have discussed this over and over in different threads with much EMOTION.

I thought I'd just run through some of the scenarios that play out to give perspective on the actual negotiating concepts, the objections and the financials that play out with 0% financing over cash.


Point 1:

0% financing. How it works, who pays the cost?

0% financing is typically offered for a year as somewhat of a tease at different jewelers to get you into a new Rolex or other luxury good. There are two ways that 0% is handled from the ADs perspective that you need to be aware of.

Method 1: The AD purchases a "buy down" through a financing company that is charging 15%-29.9% interest on an unsecured, revolving credit line. The dealer may have to pay 10-20% of the principle balance to offer this teaser so if you can identify these dealers you may wish to negotiate instead for the deduction on purchase price with cash to avoid having this finance charge absorbed by you the customer.

Method 2: The AD may partner with a company that will offer the credit at no cost to the merchant in return for somewhat predatory fine print in the contracts. Meaning, the creditor is going to create a 0% option that relies upon many people accidentally missing a payment or violating the terms so that the fees are back calculated to the day of purchase at 29.9% or more. Be wary of these contracts and read them thoroughly because they are cunning lenders that are hoping for an ideal customer: someone with great credit that accidentally misses the payment so you do not default on the debt but instead pay usury rates.

Point 2:
Does 0% financing help or hurt my credit?

Generally speaking, taking out new credit is a double-hit to your credit worthiness and credit score the day you take out a loan. Hit one is a voluntary credit look up (depending how many you make this could be minimal or moderate impact) and then you take the hit in that your debt to available credit takes a sizable hit. 0% financing options are calculated by Fair Isaac and the three bureaus like other revolving debt, mortgages and student loans. When you get to the point where you have say a $10,000 purchase paid down to only $2000 remaining balance it often is tabulated by the bureaus as though you have a line of credit where you could go back and charge up another $8000. (original balance) When you are ticking down the debt the negative hit to your credit balance available converts to a positive on your overall credit score. I personally do not recommend financing luxury goods under the hypothesis that you're doing great things for your credit score.

Point 3:

What is the real value of using 0% financing assuming you're not paying more for the goods to receive the 0% credit benefit?

This is a simple calculation called "Present Value". Lets take an example of our beloved "Hulk" 116610LV Submariner with an MSRP of $8550 USD. If you were to purchase that watch at face value with 0% financing for a year, the actual power of the money you avoided paying (assuming you can use that money elsewhere and earn 8% return annually) is surprisingly low. If you only have one balloon payment of the $8550 at the end of the 12 months, the PV of that money is only $7,916. So the 0% financing for a year in our example saved you $634 ASSUMING you can go out and earn 8% interest on that $8550 for the entire year. Alas, you likely cannot.

Usually 0% financing requires equal monthly installments so you'll make $712.50 payments every month for a 12 months to complete the $8550 you owe. Under this very common method, assuming you're going to use that $8550 to earn you interest in investments at 8% per year and you'll make that $712.50 per month at 0% and pay off that $8550 at the end of 12 months, this is what the Present Value (PV) of that $8550 0% financing scheme really is: $8191. So you've saved/made $359 in a year assuming you actually earned 8% on your money instead of paying $8550 cash and walking out of the AD with the watch sans financing.

Point 4:

Cash is king. If you can negotiate with your AD, typically they will give you a greater discount for cash than a credit customer anyway. A few reasons:

1. Salesperson can conclude a cash sale faster
2. Salesperson has 100% chance of consummating a cash sale, whereas a credit check and lots of wasted time can occur with a customer that can't get the credit. (opportunity cost is higher)
3. The AD may have to pay something for the 0% or other financing option anyway.
4. Small ADs may doctor their books on cash sales and cheat the IRS. (not your problem but Cash is King and it makes people do things)

Point 5:

Random negotiating errata.

A.) If you have good credit and don't have a good credit card, go get one. Fidelity offers an Amex card that pays you 2% cash into your brokerage account (they set one up free) on all charges with NO LIMITS. If you get down to a cash deal at an AD, try to swing in on them that you use a CC instead. If they tell you yes, you made 2%. If they want to charge you 1%, you arbitraged $85.50 on your $8500 Hulk purchase in the example above.

B.) Keep in mind, if they agree to the same price cash or credit, you should be countering that they discount your cash price another 2% because that is what it costs the AD to ring the charge through the machine.

C.) Buy what you can afford.

D.) Many people believe in only financing homes and not luxury goods. The reason for this thinking is that it is a good idea to finance secured debts at low interest rates (e.g. 30 year mortgages at 3.5%) under the idea you can make more on your money in the market. You typically cannot earn as much on investments as the fees you'll pay on revolving debt or unsecured financing, hence it is shunned by savvy investors.

E.) Realize how small the benefit of 0% financing is in real dollars. You must then reconcile that with the likelihood and impact of you making a late payment and getting hit with a huge, huge rate/charge/penalty. All it takes is one payment lost in the mail or received a day late and that paltry sum you saved with 0% financing became an enormous penalty turning your $8550 purchase into a $11106 spend!

I read it without any difficulty. Great write up! Good points! and an awesome read!

[floater156]

This thread is pointless.... who do you all think you are telling others how to spend their money. This is a Rolex forum, not a personal finance forum.

[Lmbeauleap]

Originally Posted by floater156

This thread is pointless.... who do you all think you are telling others how to spend their money. This is a Rolex forum, not a personal finance forum.

No offense intended. Someone once took the time to explain all this to me and I took the time to listen. That's how I can now afford a Rolex. We're talking about a way to save more money on one deal then most people pay for their watches in a lifetime. Hopefully someone will find it helpful.

[F&Iguy]

Originally Posted by Lmbeauleap

No offense intended. Someone once took the time to explain all this to me and I took the time to listen. That's how I can now afford a Rolex. We're talking about a way to save more money on one deal then most people pay for their watches in a lifetime. Hopefully someone will find it helpful.

X2 hopefully someone will find it helpful

And after all that talk about financing I'll still pay cash

[rr-nyc]

Originally Posted by Rookhawk

Would F&Iguy, rr-NYC, Lmbeauleap and ChristianN be willing to create a narrative as to how they go about getting the best value on a rolex? I think the different approaches could be used as a framework by different readers to attempt to get a good value on their next watch.

Are you game?

I'm going to respectfully decline

We all have different ways of negotiating a deal and I can see the thread turning into an ugly mess.

I don't mind sharing my final price and hearing what others get.