Buying a new car with cash

[Jaiguru]

This will be my first time purchasing a car with cash instead of financing so I could use any advice on how to handle the deal. How much of a discount, if any, can I expect? Should I put it out in the open that I'll be paying cash or wait till I have a deal set before letting them know how I plan to pay?

Update: 6/26
Figured I may as well update this. I finally got down to purchasing the car today and decided to go with financing it instead of paying cash. I was quoted the exact same price with financing as I was with cash. I even got them to go down $6k from the MSRP and got the $500 delivery fee knocked off which was pretty nice. 0.9% financing for 60 months on top of that.

I appreciate everyone's advice in here. It really did help. And if you're wondering I got a 2010 Acura TL SH-AWD. Can't wait until Monday

Update: 6/29
Well, the dealership screwed me. They assured me on Saturday when I went in to purchase the car that I will be approved for the loan and that I could come in on Monday to pick up my car. Monday comes and they call to tell me that I now need a co-signer and even then it's not 100% guaranteed that I'll be able to finance the car. So I get the manager on the phone to discuss the whole thing and he's basically telling me the entire time that I was never told that I could come and pick the car up on Monday and that I was going to be approved for the loan. But he'd LOVE to sell me a pre-owned car! At this point I was pretty much seeing red. I let him know I won't be buying any car from him and hang up and nearly break my phone afterwards.

So here I am back where I started trying to track down the car I wanted and it looks like I'll be paying cash. I really don't feel like asking around for someone to co-sign on a $40k car. But, there is a light at the end of the tunnel! I just got off the phone with a dealership out of state and they say they can get the car I wanted and they're gonna knock off another $2k from what the original dealership quoted me.

More updates to come!

 

[Mike Gayner]

Why would you get a discount? Dealers make more margin on finance deals than cash deals.

 

[IronWing]

We've always paid cash for cars. The transactions were pretty simple -
"Here's some money."
"Here's a car."
"Kbye."

The last time we bought a new car the dealer sat on the check for about a month which we thought was weird. If someone gave me a check that big, it would be in the bank that same day.

 

[Jaiguru]

We've always paid cash for cars. The transactions were pretty simple -
"Here's some money."
"Here's a car."
"Kbye."

The last time we bought a new car the dealer sat on the check for about a month which we thought was weird. If someone gave me a check that big, it would be in the bank that same day.

No negotiations at all? You simply paid the MSRP?

 

[guyver01]

This will be my first time purchasing a car with cash instead of financing so I could use any advice on how to handle the deal. How much of a discount, if any, can I expect? Should I put it out in the open that I'll be paying cash or wait till I have a deal set before letting them know how I plan to pay?

Haggle the deal like normal... when it comes down to the final haggle... where you and the dealer are just off by a little, tell them that you will be paying in full, in cash... and if they will meet your final price, they have a deal. if not, you will take your money and guaranteed sale, to a dealership that will.

 

[IronWing]

No negotiations at all? You simply paid the MSRP?

Pretty much. Buying a Honda Fit at a time when gas was over four bucks a gallon didn't leave a lot of room for discussion.

 

[Ronstang]

No negotiations at all? You simply paid the MSRP?

Nah, that would be stupid. I have bought two new cars in my life, one with cash and one with a gold mastercard. In both cases I negotiated them down to rock bottom before they got my money. There is always someone that wants to move a car, even if they are only making minimal profit on it.

 

[thepd7]

Pretty much. Buying a Honda Fit at a time when gas was over four bucks a gallon didn't leave a lot of room for discussion.

oh yeah. Those things are selling like crazy and hold their value really well.

 

[Bignate603]

Why would you get a discount? Dealers make more margin on finance deals than cash deals.

Here in the US they often have promotions going on to help sell cars. Many manufacturers offer great financing and a reduction in purchase price BUT you can only have one or the other. If the OP chooses not to take the financing offer he can get that reduced price.

To the OP, you can expect a discount equal to whatever the promotion. Do some research on what the promotions are in your area and that's what you'll get.

 

[Throckmorton]

They'll give you a worse deal for cash because they make money from the loan.

 

[Mide]

Just remember that you have a lot of leverage. If the price is not right or they won't budge, just walk.

 

[TruePaige]

Too many great finance deals far too often to pay with cash, IMO.

 

[ShawnD1]

Pretty much. Buying a Honda Fit at a time when gas was over four bucks a gallon didn't leave a lot of room for discussion.

I had to be on a fucking waiting list to buy a Honda Civic. Total bullshit.

One thing to remember is that sales guys don't like to give money discounts, but they'll throw in free shit. Even with the waiting list thing, I still got the free locking wheel nuts, free oil changes for life, all season mats, and I think I got a net or something like that. You could probably have him throw in a cheap car starter for free; I got one on my Corolla. They only pay like $30 for these damn things from China so they have no problem throwing them in for free.

 

[Mike Gayner]

Too many great finance deals far too often to pay with cash, IMO.

This x1000 if we're talking new cars.

 

[Throckmorton]

Too many great finance deals far too often to pay with cash, IMO.

I agree. Having cash is a very valuable thng

 

[EightySix Four]

1. Get car with 0% financing deal.
2. Put cash in best interest bearing account you can
3. Pay for car out of that account
4. (small) Profit!

There are very attractive offers out there right now, and taking the loan when you have the cash already tucked away will do nothing but help your credit score which you may want down the road for something.

Just make sure you don't ever even consider that cash as a fall back in hard times. It is gone when you sign the loan papers.

 

[Tristicus]

I'll always buy a car with cash.

 

[Jumpem]

You shouldn't expect any discount. If anything, they would want to charge you more since they won't be making money on the financing.

 

[XZeroII]

If you walk in and say that you're ready to buy RIGHT NOW and that you have the money sitting in an account and you're ready to write a check, you can get them down. However it still may take awhile. The promise of cash just indicates that you're serious and you're not going to waste their time. When it comes to finance, there is always the possibility that you're not going to pass the credit check and stuff. With cash, they know that the sale is on as long as you are happy.

 

[Gibson486]

The only time paying cash is wise is if you get one of those lower interest or cash back promotions. If you do not take the low interest, you will get something like 1k cash back. if that promotion does not exist, most dealers will not care if you pay cash or finance.

Remember, to the dealer, paying cash means you are not doing doing financing through them, so if you get financing through your own means (online or your own bank...), it's the same as cash to the dealer.

So, does it make a difference? Well...I have done a deal both ways....as long as the car has not been selling for months, the dealer will not factor in the kick back from financing through them. In other words, it will be the same "bottom" price minus any promotions (whether it be cash back or low interest) most of the time.

 

[Bignate603]

You shouldn't expect any discount. If anything, they would want to charge you more since they won't be making money on the financing.

People keep on saying this, but they aren't making any money on the special financing deals that are out there right now. Take the incentives on the corvette for example, you get 0% for 60 months OR $3000 cash allowance. The Silverado has 0% for 72 months OR $5000 cash allowance.

BMW has 0.9% financing on some of its models, they're losing money on that deal so they may be willing to give you a better deal if you don't take the financing. Honda and Acura has 0.9% and 1.9% financing depending on the model and the length of the loan, they aren't really making any money off that loan either.

Saying that the automakers make tons of money off the financing is a few years behind the times, many are taking a loss on the financing so they can move cars off the lot.

 

[DietDrThunder]

We always pay cash. We bought in 2009 a new, almost fully loaded 2009 Cadillac CTS (I didn't want the factory navigation or the backup sensors). We also have a GM mastercard which we rarely use, but had $29 of cash towards a new car. But what was nice is that the GM Mastercard sent us a rebate coupon for an additional $2000 off a CTS. We got employee pricing (one of the incentives at the time), and GM also had a $3,000 rebate or 0% financing. Sticker was around $44,500, final price with using all the rebates and paying cash was around $33,000 (not counting tax, title, and license).

Also, never ever tell them you have a car to trade-in until the final price is reached. It changes the dynamics of the deal and the dealership can make it seem you are getting a better deal than you actually are. I personally don't do trade-ins and sell the cars myself. I usually price the car I sell between the dealership trade-in value and Kelly Blue Book retail value and I always come out ahead.

 

[Imdmn04]

Don't buy with cash. Invest the 30K in something else. Liquidity>*.

Always negotiate a price first (based on invoice-incentives+dealer margin based on demand of the product), you do not need to let them know if you are paying cash or trading in anything until the end.

Even if you just leave the cash in the bank in a CD, a 5-year @1.9% savings account will yield more return (in interest) than you have paid out in interest on a 5-year @1.9% auto loan.

 

[angry hampster]

1. Get car with 0% financing deal.
2. Put cash in best interest bearing account you can
3. Pay for car out of that account
4. (small) Profit!

There are very attractive offers out there right now, and taking the loan when you have the cash already tucked away will do nothing but help your credit score which you may want down the road for something.

Just make sure you don't ever even consider that cash as a fall back in hard times. It is gone when you sign the loan papers.

Basically this. Loans at 0% for 48-72mos are really easy to come by right now with many manufacturers. Even a 1-2% isn't a bad deal if the loan isn't horrendously long.

 

[uploader]

In the uk you can save £2,445 on a new clio if you pay in cash
http://www.renault.co.uk/cars/model/new-clio/offerdisplay.aspx :thumbsup: