OT: Paying cash for a new car, tips?

[45K10]

My wife and I are looking at purchasing a new car in the next few months and I was wondering if anyone had any tips on how to deal with the dealership?

We paid cash for a new car ten years ago and the salesperson at that time was not very enthusiastic about us paying cash. I know dealers make money on the back end of the deal (financing, selling extended warranties, etc.) but I'm wondering what is the best way to approach a cash purchase in today's market?

P.S. I don't want to go through the motions of sitting with the dealers finance dept just to tell them I'm going to pay cash.

Thanks for the advice!

[JMT3]

I purchased my current vehicle in August of 2020. Back then dealers were way overstocked and we all know why. A local dealership was advertising a brand new vehicle at an unreal price. I stopped in and the deal was real. I did ask about financing. They told me the rate and I had the cash so when I went into the business agents office I sat my checkbook on his desk. He asked what I was going to put down or was I trading my old car in. I told him I was keeping my car, a gift to a daughter and told him I was putting nothing down, I was going to just pay for it. He didn’t blink an eye. I asked him how many people paid cash for a car and he quickly replied 36.8%. In about a half hour I drove off in my current vehicle.

[Peter P.]

The rule of thumb is to keep discussions about trade-in separate from the purchase price of the vehicle.

When the salesperson asks if you will be trading in your old car, tell them you haven't decided yet/you want to discuss that later/anything. After pricing is in concrete, THEN when discussions turn toward your trade-in you tell them you will not be trading in anything.

The reason is the dealer will adjust the sales price up in consideration of a trade-in.

I paid cash for my last car but it was a Saturn and they had a no-haggle pricing structure. They also required I pay with a certified bank check so I'm surprised JMT3 above was able to pay with a personal check. At that time (1995) I was told 1/2 of all sales were cash. But I question that number as buyers could have received financing elsewhere and merely brought in a bank check.

[reuben]

The only problem I had with paying cash was that I still had to be approved. I told the finance guy that I'd just write a check. He said they couldn't know if the check would clear so I still had to be approved. I told him I'd write the check and wait until it cleared, as I wasn't in a rush. He said he couldn't do that. Irritated the bejeebus outta me, but I didn't have any choice so I got approved - to pay cash.

This was Subaru after covid was largely past, and they had cars or could get them in a month or two.

[Davist]

I was going to pay cash for one of our cars, I ended up financing, as they had an extra $1k discount, then paid it off the next month or so, so be aware of that also.

[45K10]

Thanks guys!
To JMT3's point, I was able to pay with a personal check 10 years ago. I just had to show them the balance in my checking account on my phone before they would except it.

[saab2000]

I have no personal experience with this but I was told by a friend who did it and he told me that he negotiated the price and then when they went to the office to do the details he told them that it would be a cash transaction, at which point everyone tried to change the price upward. He held them to the price they had worked out.

He was ready to walk out and said as much. Eventually he got the deal they agreed to on the floor but he had to have some spine.

Some places will push back on this kind of deal. For the record, it was a Buick dealership in his case.

[superbowlpats]

If paying cash most dealers will insist on a bank aka certified check or wire transfer. There are some pretty reasonable interest rate deals out there if you dont want a ton of cash tied up in your new car. I just got .9% for 36 months on a new 23 Honda Ridgeline.

[AngryScientist]

Find the car you want and then deal with the internet sales manager on the phone. Do t go into the dealership until the deal is done and it’s time to pick up the car.

[2metalhips]

I recently bought a new Toyota Venza, cash, and the dealer required a bank check.

[Mike V]

They make their money on the financing. Negotiate the price down and pay off 2 months later. Work them for all the incentives.

[eddief]

When we were buying my first car we found the one I really wanted (believe it or not it was a used 1967 Austin Healey 3000). They wanted to sell it a certain price. My dad offered significantly less. We ended up walking away from the deal. But I really wanted that car bad. Dad said "don't worry" the salesman will call us back in less than 24 hours and give us the deal we want. He did. The lesson was...walk away at least once.

[Likes2ridefar]

Originally Posted by eddief

When we were buying my first car we found the one I really wanted (believe it or not it was a used 1967 Austin Healey 3000). They wanted to sell it a certain price. My dad offered significantly less. We ended up walking away from the deal. But I really wanted that car bad. Dad said "don't worry" the salesman will call us back in less than 24 hours and give us the deal we want. He did. The lesson was...walk away at least once.

I did that after Kia refused to give a cash price without financing and they never called back

[Ryun]

although it varies somewhat across brands, cash accounts for around 35% of sales for franchise dealers. Cash doesn't directly affect the dealer in terms of profit although they would stand to make 200-400$ on orginating a loan.
Most of us would prefer the clean and quick cash deal with no contracts to chase.
Manufacturers however have increasingly tied rebates and other incentives to financing in order to increase customer retention.
Id just be upfront about your method of payment but I would inquire about whether incentives that they are showing you require financing.

Some of those incentives combined with subvented interested rates may be worth looking. at keeping a loan for 60-90 days since most companies have no prepayment penalty.

A bank check or wire is almost always required. Otherwise most places will run a credit check to verify address and any other red flags.

Finally in this day and age there isn't a reason not to complete most if not all of the transaction online to avoid all the negotiation silliness. About 25% of our business doesn't even step foot in the dealership.

[Kyle h]

Ryuns answer is really the best. Also I’ve been seeing more financing discounts lately so if you can find the car you want for under 3% you’re better off financing and just putting that money in a CD or evening a savings acct that ms paying 5-6%