OT: Paying cash for a new car, tips?

[NHAero]

I bought my 2020 Honda Fit 2 years ago at the height of the pandemic car inflation. It was CPO with 5,000 miles from a good dealer. Set up the price over the phone, and a range for trading in the '08 Fit. The trade was closer to the lower than upper of the range but I expected that given the car's age and condition. Then I walked into the office where they do the paperwork and handed the woman a bit over $20,000 in hundreds. Her eyes grew big but she counted it out.

I live on an island and I asked the branch manager about bringing a bank check for 95% of the price, and what I'd do if the deal fell through. She said, a lot of people just bring cash! So I did.

[christian]

Originally Posted by 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.

This is the way. When I've done this, I've just faxed the dealers within 100 miles and told them what I wanted and what I was willing to pay. I had two dealers come back within $150 of my proposed price within 6 hours.

[redir]

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.

My father always did that too and it worked every time. The other thing he would do is find out how much they actually pay for the car themselves and then offer them a reasonable profit. They don't accept it get up and walk.

[tellyho]

I haven't had trouble just giving them a bank check when I pick it up. I honestly didn't even see my current car before I showed up to pick it up last time. Just shopped it online and took the best deal within reasonable driving distance.

[fourflys]

So I think it’s very dealer specific.. I paid cash for my last car, they wanted a bank check.. just bought a new car in Oct at a Subaru dealer and they gladly took my personal check.. you still have to sit with finance as they are the ones that you sign the purchase agreement with and do the license, etc..

But yes, they don’t like you paying cash as three make no extra money..

[prototoast]

If they will give you a better deal if you finance, there's little reason not to sign up for financing then immediately pay it off.

[Alistair]

Originally Posted by Ryun

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.

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.

This.

If the low price hinges on financing, as long as there's no pre-payment penalty, you can take the loan, keep the dealer happy, and pay it off the following month.

And online is the way to go. My last car purchase (2021 Honda) was mostly online or via SMS. Contacted the dealer through their website, asked to move conversation to text messages (vs phone or email), negotiated there, did the add-on sales crap over the phone in <5 minutes. All I had to do at the dealership was sigh the stack of loan paperwork, cut a check, and drive home.

[PaMtbRider]

Just another data point, I bought a new truck a couple of months ago. I ordered the truck after negotiating a price. That required a small deposit. Once the truck arrived we negotiated trade in value. I paid the balance with a personal check. Never dealt with finance department and they had no problem with the personal check. This was through a smaller dealership.

[benb]

I'm curious how many of you have ever ended up with a loan that had pre-payment penalties.

I have never seen one. I would not agree to one, even if it meant I walked from a car or home purchase.

[robin3mj]

Paid cash for our last 2 new car purchases.

One was a personal check and drove off the lot that day, easy peasy. (Though they did initially try and quote me $12k for my trade-in when I had a printout of an online offer at $18k, which they honored.) They had my trade-in listed on their website a day or two later at about $19k; feels like a pretty low flip profit but maybe those are the margins they work off of...

The prior one we ended up financing to capture some pretty significant incentives, and paid it off after 3 months which was the minimum term required to qualify for said discounts. Just read the fine print on the loan to ensure there are no early prepayment penalties.

[fourflys]

Originally Posted by benb

I'm curious how many of you have ever ended up with a loan that had pre-payment penalties.

I have never seen one. I would not agree to one, even if it meant I walked from a car or home purchase.

I was about to mention that.. often loans will have a clause that if you pay off prior to a certain time (usually less than the full loan), there is a penalty.. these are usually on loans through the dealer and not from your bank..

[benb]

Originally Posted by fourflys

I was about to mention that.. often loans will have a clause that if you pay off prior to a certain time (usually less than the full loan), there is a penalty.. these are usually on loans through the dealer and not from your bank..

Could be regional, a big dealership here might have 10 banks they can use (at least according to my brother who used to sell cars). If you don't like one or don't qualify for one they move on down the list.

I think they have strong incentives to start with the auto manufacturer's in house lending.

[Hilltopperny]

Ex car salesman here. Wait until the end of the month, start negotiating before you even show up with the Internet manager and hold out until they meet your demands. They eventually will unless you are purchasing something in such high demand that they can just sell it elsewhere. I just did this last month when purchasing a truck.

[cnighbor1]

has a sperate online order dept. with lower prices

[NYCfixie]

Originally Posted by 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.

I did this on two brand new cars (for mother and mother-in-law), at different dealerships, in different states, and had the same outcome...

The deal was done. We went to pick up the car and pay in cash (i.e. bank check) but when we arrived at the stealership we were told the internet manager "was not available" and the delivery person "is backed up for a few hours". A salesperson tried to upsell us and when we kept saying no he complained that he was not making any money on the deal so I basically told him to piss off since I had never spoken to him before that day. Then the Finance Manager gave it a go with the same BS of trying to upsell us on crap we did not need or want and he was also complaining that he was not making any money on the car. After 20 minutes of this crap, I told them they had 10 minutes to get the car out front, get the paperwork ready to be signed, and stop wasting our time or we were walking out the door and going somewhere else. Interestingly, one dealership got it done in 15 minutes and for the other one we walked out at the 15 minute mark and called another dealer.

I was shocked that again we had a deal done for the second car at the third dealership but on pickup day they tried the same BS. I gave them 5 minutes to get everything ready or we were leaving. It took them about 15 minutes but we got the car at the agreed upon price.

Lesson leaned: when you show up at the dealer, show them the bank check and give them 15 minutes to get everything ready before they try any BS.

Moral of the story: I am glad I was with my mother and mother-in-law on delivery day for each of their vehicles because I do no think they would have been able to fend off all the high pressure sales tactics (and why they both asked me to get involved with their car purchases).