patrick.net

MrMagic says

@tenpoundbass the tactic they tried on you is old and profitable for the dealership. Basically they shake your confidence in your credit history and get you to sign papers at a higher interest rate than the bank actually is offering you.

I think the reason is the "looking beyond the sale" tactic. When they (not quite) close the deal promising one set of terms you are then thinking about how great driving the car is and aren't any longer concerned with the payment terms. When those terms are suddenly switched, you don't want the good feelings to evaporate (and the "deal" to evaporate) so you wind up taking whatever (lousy) deal they propose at that moment.

The same phenomenon works the same way with trade-ins too: promise customer great deal, wait a few days, then offer customer something significantly less. With the trade-in, they'll delay the "final inspection" — our trade-in specialist won't be here until
Monday, you'll have to sit tight on this great deal until then. During that time you'll be "looking beyond the sale" to all the great things to come. When the final inspection and final sale happen, the trade-in is much lower than "promised," but since you've been imaging how great everything is going to be, you've sunk several days of time waiting, and you told those 15 Craigs List buyers you are trading in, you go along with the bad deal.

zzyzzx says

I think the intent was to show the $20000 "market adjustment" bullshit. Otherwise yeah, I would have loved to see the whole window sticker with detailed pricing and in high res so that I could read it.

I don't have any issue with a $20k "market adjustment" — it's in plain black-and-white for all to see. Let them charge whatever the market will bear.

I let it ride in the market where it was more liquid (plus paying a higher return) since there is no equity/value growth in the housing market here.

Growth in the housing market is not relevant, it is the interest on the loan. The issue is whether the stock market investment is paying more than the interest costs. The housing market growth would be relevant in a rent-buy decision. Since you already own the home, the home will have the same "appreciation" regardless of any mortgage.

HeadSet says

Growth in the housing market is not relevant, it is the interest on the loan. The issue is whether the stock market investment is paying more than the interest costs. The housing market growth would be relevant in a rent-buy decision. Since you already own the home, the home will have the same "appreciation" regardless of any mortgage.

Nope, growth in the market IS relevant. The appreciation (or lack of) has a big bearing on overall investment value, outside of the financing cost versus stock market return. It's two different animals that work together. Here's why.

One example: House paid off, local appreciation running 3%, what's your net gain on the house investment? 3%
How about house paid off, local appreciation running -3%, what's your net gain? -3%

Example 2: Mortgage on house, interest rate: 3.5%, Cash invested in stock market instead returning 6%, local appreciation running 3%, what's your net gain on the house? 5.5%
How about Mortgage on house at 3.5%, Cash invested in stock market making 6%, local appreciation running -3%, what's your net gain? -0.5%

You would be making more in a positive appreciation market and wouldn't be losing as much in a negative appreciation market in example 2 carrying a mortgage.

Plus, I didn't factor in any equity buildup from the mortgage payments, since that would be same in both situations.

Example 2: Mortgage on house, interest rate: 3.5%, Cash invested in stock market instead returning 6%, local appreciation running 3%, what's your net gain on the house? 5.5%

I see that differently. Whether the house appreciates or not does not matter, you already own it. The decision is still "if you can beat the mortgage with stocks, leave the mortgage be and put the cash into stocks." The decision is not "if the house appreciates/depreciates, pay off the loan."