Is it easier to get a better deal on a used car if you pay cash?

[jfall]

I'm looking at buying a Used truck from a dealership. The truck is in perfect condition, there isn't a whole lot of "dirt" on it to use to bargain the price. They are asking $12,700 for it, but I know they took it as a trade in. The trade is value is about $9,000 from what I can find by searching KBB and Edmunds.

I'm thinking about going in with $10,000 in cash and basically tell them take it or leave it. I'll set aside another $500 for bargaining. So basically I will either be walking out of there with a $10,000-$10,500 truck or nothing.

If I offer the dealership cash are they more likely to sell at a lower price? How far should I expect them to go below the sticker?


UPDATE: well, I went and checked the truck out today, took it to a mechanic. The truck was in great condition, the mechanic said it was very well taken care of and couldn't find any problems with it that needed to be addressed.

I went to the bank and took out $10,500. Talked to the seller for a little bit and then said here is my offer, and put the cash on his desk. He said "hah, I hope you brought more with you". I said, nope that's as much as I am willing to pay. He said he couldn't do it for $10,500, lowest he could go is $11,500. I pushed him for a while and he wouldn't budge. So I thanked him for his time and left. He didn't try to stop me.

He said that he paid more for the truck than I was offering, which has to be complete BS. The trade in value was at least 2k less than what I offered

 

[Corporate Thug]

i dont think the dealership cares. In fact, they would prolly want to finance you and squeeze more money out of you

 

[melchoir]

Bring $9,000 in cash and you'll walk out with the truck.

 

[aircooled]

If you have cash, then always low-ball.

 

[AbsolutDealage]

Originally posted by: melchoir
Bring $9,000 in cash and you'll walk out with the truck.

Either that or buy private party. The cash will take you farther to begin with, and you can strike an even better deal with cash in hand.

 

[waggy]

NO it does not.

they get paid no matter what. so why would they care if you pay cash of finance? in fact as Corporate thug said they would prefer you to finance. some of the larger used car dealerships (ones on new car lots) usually have ways to get more out of you when you finance.


but it won't hurt to go in and say you have 10k and want the truck. they just might do it to get it off the lot.

 

[jfall]

Originally posted by: AbsolutDealage

Originally posted by: melchoir
Bring $9,000 in cash and you'll walk out with the truck.

Either that or buy private party. The cash will take you farther to begin with, and you can strike an even better deal with cash in hand.

Ya, but this is the exact truck I want. I've been searching private sales for a while with no luck. And it's in really good condition and low mileage too

 

[jfall]

btw, it's a small local dealership.. they don't have a corporate office or anything like that. They only have about 30 cars on the lot

 

[aircooled]

Tell them you'll give them 9 grand cash, and be ready to leave if they refuse. They will call you back the next day if you walk away.

 

[thepd7]

Originally posted by: jfall
btw, it's a small local dealership.. they don't have a corporate office or anything like that. They only have about 30 cars on the lot

You should have mentioned that. I think that changes things a lot. I do think it will help when you are talking about a small dealership like that.

 

[waggy]

Originally posted by: jfall
btw, it's a small local dealership.. they don't have a corporate office or anything like that. They only have about 30 cars on the lot

then it won't make a diffrence.

though they more then likely make a deal with you to get it off the lot. but who knows.

won't hurt for you to try. but as for the fact you have cash is no big deal.

 

[Ronstang]

Cash talks because it is a far more liquid asset than a vehicle you MIGHT be able to sell for a little more. Cash can even net you the best deal on a new vehicle. I shopped around in 1990 because I wanted a new ZX-7. The going price was a little over $7K. I knew which dealer always had the lowest price and called for a quote and they said they would sell me one for $6150 out the door. I did not want this dealer putting together my bike however so I went to the best dealership in town with $6150 in cash in an envelope. I approached the salesmen and told him I wanted a green ZX-7 and was willing to pay $6150 out the door, this afternoon only. He told me the price was too low on such a popular bike but said he would take it up with the sales manager. The sales manager came over and asked if I actually had cash so I flashed him the envelope. I bought a bike that afternoon.

 

[ponyo]

Cash is king. The dealership would like you to finance through them so they can make more but they won't turn down a sure sale. Not everyone has the money or can qualify for a loan. If you have cash, you're a guaranteed sale.

 

[amdskip]

Yes cash is good then.

 

[jfall]

So should I start off at 9k? I don't know if I should low ball that much, they may not take me seriously

 

[SVT Cobra]

jfall memebers of my family have been in the car business for over twenty years and having sat as a child behind my uncle's desk while he made deals in a type of lot you describe, yes you will probably walk out with the truck.

Waggy and others really do not know what they are talking about (not that they would, as I am guessing they have only been on the buying end). Essentially yes, it depends on the lot, but from my experience what they want to do it get rid of the car and get their money. How likely you will be able to get a better price with cash is due to (based on the size of the lot):

How long the car has been on the lot. If it has been there a while they want to move merchandise and will likely give in at a smaller price due to this.
The trade in value. They want to earn money, and certainly not lose money. How long has the lot been open? If it is a new lot new owners will often break even if it means making a deal just to once again move merchandise and two hope that you come back again when you need another car for yourself or a daughter etc. You said the trade in value on KBB is 9,000. That means they probably got it for 7,500 or 8. Which means that you are being fair for that price, although if they were asking 12,500 they will probably only go down to 11. But, if you have cash they might take 10,500. I am betting that if you say you have the cash right here to pay and you'll sign this moment, then they will take it. Also on this type of lot trade ins are usually sold as soon as possible because of potential mechanical defects that could go wrong. The person traded in the car for a reason, and usually the case is something like consistant engine overheating etc. So make sure you have to car checked out, but don't let them know it is in great shape. If they only have 30 cars I doubt they really know. Also a lot of this size probably does not even have a finance liscence. You can tell this by how many cars are available for buy here pay here and the prices they allow it on.

Yes this is a lot different then a dealership, which I know also, but the bottom line is, if you have the cash right there, they'll take it. If they let you walk, that means that they got the truch within a grand of what you offered and want more, since they want 12k. It would be less if it was a car in the 5k's.

Hope that helps.

Edit: as for the guys saying they want to finance you to get more money out of you. BS the dealer would rather take cash right then because of its liquidity and it's gaurenteed they do not have to deal with the hastle later.

 

[jfall]

Originally posted by: SVT Cobra
jfall memebers of my family have been in the car business for over twenty years and having sat as a child behind my uncle's desk while he made deals in a type of lot you describe, yes you will probably walk out with the truck.

Waggy and others really do not know what they are talking about (not that they would, as I am guessing they have only been on the buying end). Essentially yes, it depends on the lot, but from my experience what they want to do it get rid of the car and get their money. How likely you will be able to get a better price with cash is due to:

How long the car has been on the lot. If it has been there a while they want to move merchandise and will likely give in at a smaller price due to this.
The trade in value. They want to earn money, and certainly not lose money. How long has the lot been open? If it is a new lot new owners will often break even if it means making a deal just to once again move merchandise and two hope that you come back again when you need another car for yourself or a daughter etc. You said the trade in value on KBB is 9,000. That means they probably got it for 7,500 or 8. Which means that you are being fair for that price, although if they were asking 12,500 they will probably only go down to 11. But, if you have cash they might take 10,500. I am betting that if you say you have the cash right here to pay and you'll sign this moment, then they will take it. Also on this type of lot trade ins are usually sold as soon as possible because of potential mechanical defects that could go wrong. The person traded in the car for a reason, and usually the case is something like consistant engine overheating etc. So make sure you have to car checked out, but don't let them know it is in great shape. If they only have 30 cars I doubt they really know. Also a lot of this size probably does not even have a finance liscence. You can tell this by how many cars are available for buy here pay here and the prices they allow it on.

Yes this is a lot different then a dealership, which I know also, but the bottom line is, if you have the cash right there, they'll take it. If they let you walk, that means that they got the truch within a grand of what you offered and want more, since they want 12k. It would be less if it was a car in the 5k's.

Hope that helps.

Edit: as for the guys saying they want to finance you to get more money out of you. BS the dealer would rather take cash right then because of its liquidity and it's gaurenteed they do not have to deal with the hastle later.

Thanks, very helpful post. I guess it won't hurt to walk in knowing that I won't spent a cent over $10,500. If they take it, great, if not then no big loss to me.

The lot has been in business for at least 8 years. They used to sell new cars, but switched to selling used cars exclusively.

Also, do you have any recommendations/advice on warranty? Are they going to try and push me to buy some type of extended warranty? What should I look for/avoid in this area?

 

[SVT Cobra]

Originally posted by: jfall

Originally posted by: SVT Cobra
jfall memebers of my family have been in the car business for over twenty years and having sat as a child behind my uncle's desk while he made deals in a type of lot you describe, yes you will probably walk out with the truck.

Waggy and others really do not know what they are talking about (not that they would, as I am guessing they have only been on the buying end). Essentially yes, it depends on the lot, but from my experience what they want to do it get rid of the car and get their money. How likely you will be able to get a better price with cash is due to:

How long the car has been on the lot. If it has been there a while they want to move merchandise and will likely give in at a smaller price due to this.
The trade in value. They want to earn money, and certainly not lose money. How long has the lot been open? If it is a new lot new owners will often break even if it means making a deal just to once again move merchandise and two hope that you come back again when you need another car for yourself or a daughter etc. You said the trade in value on KBB is 9,000. That means they probably got it for 7,500 or 8. Which means that you are being fair for that price, although if they were asking 12,500 they will probably only go down to 11. But, if you have cash they might take 10,500. I am betting that if you say you have the cash right here to pay and you'll sign this moment, then they will take it. Also on this type of lot trade ins are usually sold as soon as possible because of potential mechanical defects that could go wrong. The person traded in the car for a reason, and usually the case is something like consistant engine overheating etc. So make sure you have to car checked out, but don't let them know it is in great shape. If they only have 30 cars I doubt they really know. Also a lot of this size probably does not even have a finance liscence. You can tell this by how many cars are available for buy here pay here and the prices they allow it on.

Yes this is a lot different then a dealership, which I know also, but the bottom line is, if you have the cash right there, they'll take it. If they let you walk, that means that they got the truch within a grand of what you offered and want more, since they want 12k. It would be less if it was a car in the 5k's.

Hope that helps.

Edit: as for the guys saying they want to finance you to get more money out of you. BS the dealer would rather take cash right then because of its liquidity and it's gaurenteed they do not have to deal with the hastle later.

Thanks, very helpful post. I guess it won't hurt to walk in knowing that I won't spent a cent over $10,500. If they take it, great, if not then no big loss to me.

The lot has been in business for at least 8 years. They used to sell new cars, but switched to selling used cars exclusively.

Also, do you have any recommendations/advice on warranty? Are they going to try and push me to buy some type of extended warranty? What should I look for/avoid in this area?

Couldn't tell you about that one. They probably won't push one on you as the ones used car lots offer (most) do not cover for that long and they do not make much money from the company that sells them. In my experiences people usually came in asking for them, and left if we could not offer one they liked (some people think that used warrenties will be as good as a new or certified used car one from a new car dealer). So it was almost the other way around.

 

[radioouman]

Often, teh dealership gets a kick back from the bank when they finance it. The dealership may be willing to go cheaper if you are financing than paying cash.

But it is also hard for the manager to resist cash... so you may get the same price either wya.

 

[jadinolf]

Originally posted by: melchoir
Bring $9,000 in cash and you'll walk out with the truck.

Sure he will.

 

[jfall]

UPDATE: well, I went and checked the truck out today, took it to a mechanic. The truck was in great condition, the mechanic said it was very well taken care of and couldn't find any problems with it that needed to be addressed.

I went to the bank and took out $10,500. Talked to the seller for a little bit and then said here is my offer, and put the cash on his desk. He said "hah, I hope you brought more with you". I said, nope that's as much as I am willing to pay. He said he couldn't do it for $10,500, lowest he could go is $11,500. I pushed him for a while and he wouldn't budge. So I thanked him for his time and left. He didn't try to stop me.

He said that he paid more for the truck than I was offering, which has to be complete BS. The trade in value was at least 2k less than what I offered

 

[EagleKeeper]

Did you leave him your number?

Check back in a week and if the truck is still there; make the offer again - 500.

 

[StrangeRanger]

First off, financing will always be a better haggling point. The dealership will make money on the vehicle sale and the financing. Second, the values in the books are starting points and by no means worth the paper they are written on. Cars are like any other market commodity, what the market is willing to pay is what the vehicle will sell for. And if the truck is in the good shape you say it is, they prolly offered more for the trade in. If the truck is as nice as you say, then it will sell rather quickly whether you buy it or not. I'm sure he's more than willing to sit on it for a month or more to make more $$$ on the sale. He took it as trade, it's a nice truck, it's not costing him any floor plan interest to hold on to it. Plus, absolute worst case is that he's prolly got 3-5 wholesalers drooling to buy it from him.
You keep mentioning the trade in value in the books, what's the retail value in the books? Is it close to what he's asking?
<---- been in the car business for years

 

[teckmaster]

chances are they paid up to $5000 less than asking price. I'd go with the 10,500 but offer them 9,000 to start. might as well save yourself some money

 

[Golgatha]

Originally posted by: Naustica
Cash is king. The dealership would like you to finance through them so they can make more but they won't turn down a sure sale. Not everyone has the money or can qualify for a loan. If you have cash, you're a guaranteed sale.

Yeah, if you finance then they take a chance of you defaulting. Also, if you buy outright with cash, then they can immediately put it in the bank and start earning interest.