OT: Paying cash for a new car, tips?

[.RJ]

Originally Posted by fourflys

Now if you mean I can have my cash in an interest-bearing account for an extra 90 days, then maybe.. but how much is $30 or $40k going to earn in 90 days unless you have an insanely good return product?

You'd earn $500 @ 5% interest on $40k. Of course, thats about what the interest on 3 months of the car note would cost you, too. So that would be a good strategy to offset any costs.

Some of the financing contracts require 90 days before refinancing or payoff but a lot of them dont - read the fine print and all. If there's no penalty for paying it off as soon as you get your loan documents then there's really no downside here.

Still, the dealer holds a lot more information about the financials than we can know sitting at the sales desk - there's holdbacks, incentives, year/quarter/month end bonuses, promotions, financing spiffs or kickbacks. So they have a profit number to hit on that vehicle, on that day, and there's no way to know what that is or how much the financing plays into it. And as ****ty as most dealers are, they're in business to make money and there's nothing wrong with that.

So maybe you are getting the best price, or maybe not. Its awful short sighted to walk from a deal because they dont want to take a check at that price if the out the door price now costs you more than whatever the financing costs are.

[fourflys]

To each their own, but I’ve HAD to finance way too many cars in my life and now am in a position to not finance, as long as I’m not buying a stupid expensive car.. so, for me, I don’t have any interest in financing a car.. I do the research, know what I want to pay OTD, and what, if any, room I’m willing to move.. can’t meet my parameters? No deal.. there are way too many other cars on offer to not pay what I want to pay..

[Ralph]

Originally Posted by fourflys

To each their own, but I’ve HAD to finance way too many cars in my life and now am in a position to not finance, as long as I’m not buying a stupid expensive car.. so, for me, I don’t have any interest in financing a car.. I do the research, know what I want to pay OTD, and what, if any, room I’m willing to move.. can’t meet my parameters? No deal.. there are way too many other cars on offer to not pay what I want to pay..

I kinda feel the same way. One rarely really "needs" a car anyway. I hate debt and payments. And sometimes finding a great dealer and a fair price is the goal. I really like my wife's Lincoln dealership. (it's not part of an auto group) Sure we've paid for that, but it's just a nice place to do business. Sometimes they talk me out of doing stuff. Says it doesn't need it etc. And they wash it anytime I drive it over there...free. And their coffee is great. Considering they have a business to run, pay people fair wages, be a good citizen in the community....I wouldn't drive across town for a slightly better "deal". Sure....I drink the Cool Ade.

[fourflys]

Originally Posted by Ralph

I kinda feel the same way. One rarely really "needs" a car anyway. I hate debt and payments. And sometimes finding a great dealer and a fair price is the goal. I really like my wife's Lincoln dealership. (it's not part of an auto group) Sure we've paid for that, but it's just a nice place to do business. Sometimes they talk me out of doing stuff. Says it doesn't need it etc. And they wash it anytime I drive it over there...free. And their coffee is great. Considering they have a business to run, pay people fair wages, be a good citizen in the community....I wouldn't drive across town for a slightly better "deal". Sure....I drink the Cool Ade.

Awesome! Love the intangibles!

[buddybikes]

once had a Saab mechanic, he would find me a car at auction (in person) usually states away, bring it back and check over/fix then charge fixed 1,000 for his services. Got 2 cars that way, miss him...

[saab2000]

I just paid off my Tesla Model Y. I financed it but paid it off in about a year. Still, the interest even over that shortish time was not trivial. Car debt sucks. Glad to be done with it, for now.

[45K10]

My wife and I hate being in debt and that is why we paid cash instead of financing a new car. We are willing to pay a little extra just to alleviate some stress. Although, in the deal we did last week I do not think the fact of paying cash cost us anything extra in the deal.

Dealers are desperate right now and I think they are just happy to move cars off the lot.

[jh_on_the_cape]

I am bumping this back up. I am looking at buying a used car from a dealership. I am searching around on cargurus.
Is it still the case that cash vs borrow doesn't matter to dealership?
I have the cash on hand, and I will either trade in my car or just sell on carvana, depending what they offer.
Just looking for any suggestions. I have always bought cars locally from craigslist and FB marketplace but there seems to be very few people doing that these days.
Any other good person to person car sites?

I am looking at going from my 2013 Subaru outback to a lightly used rav4 hybrid, if that matters.

[fourflys]

Originally Posted by jh_on_the_cape

I am bumping this back up. I am looking at buying a used car from a dealership. I am searching around on cargurus.
Is it still the case that cash vs borrow doesn't matter to dealership?
I have the cash on hand, and I will either trade in my car or just sell on carvana, depending what they offer.
Just looking for any suggestions. I have always bought cars locally from craigslist and FB marketplace but there seems to be very few people doing that these days.
Any other good person to person car sites?

I am looking at going from my 2013 Subaru outback to a lightly used rav4 hybrid, if that matters.

if you have cash and want to pay cash, you should have no problems.. if the dealer gives you problems, that would be a red flag for me.. some folks on here will go on an on about out how you're giving money away paying cash, yada, yada, yada.. up to you, but I wanted to buy the car and be done with it.. the dealer even took a personal check for way more than I thought they would.. this was in Oct of 23..

[CAAD]

Originally Posted by jh_on_the_cape

I am bumping this back up. I am looking at buying a used car from a dealership. I am searching around on cargurus.
Is it still the case that cash vs borrow doesn't matter to dealership?
I have the cash on hand, and I will either trade in my car or just sell on carvana, depending what they offer.
Just looking for any suggestions. I have always bought cars locally from craigslist and FB marketplace but there seems to be very few people doing that these days.
Any other good person to person car sites?

I am looking at going from my 2013 Subaru outback to a lightly used rav4 hybrid, if that matters.

Depends on the dealer. If you say you are paying cash then the dealership won't get any financing reserves. Those dealers won't play ball and in turn not give you a good deal. If you run into that move on and don't do business there.

Negotiate the cost of the car first, no other factors. Don't tell them you are paying cash or that you have a trade. The car purchase is transaction #1, the trade is transaction #2, the trade is an entirely separate transaction! Go get an in-person carmax offer (not online), most dealers will beat a carmax in-person offer printout by $X. I used Carvana personally, and neither the dealer nor Carmax could even come close.

If the car has been sitting on the lot for 30+ days, they will be motivated to move the unit. I like Caredge.com , pay for one month for a few bucks. It gives you good insight on how many days a car has been sitting on a dealer's lot. The longer it sits the better, they don't want to keep paying floorplan cost on that car.

[benb]

I think you gotta play it by ear based on the car you want.

I'm in this extended period where I look at new stuff that's coming out and what deals are out there even though I'm not really interested in buying anything.

It would really depend on if one of these cars I'm interested in is not selling well and they have some crazy deals on the financing side.

Otherwise loan rates and interest rates on your own investments go up at the same time so it's always hard to tell.

If my car took a dump right now I might very well replace it with a VW ID.4.

The local dealer has the loaded ones marked almost $9k off right now which is awesome compared to a year or two ago, but the financing offers are very "meh". 6.9%-7.1% for 60 months? Nope, cash sale for sure. There aren't really any "easy" savings/investments that beat that. Private Equity/Credit do, but even those don't beat it by that much.

[.RJ]

Originally Posted by fourflys

if you have cash and want to pay cash, you should have no problems.. if the dealer gives you problems, that would be a red flag for me.. some folks on here will go on an on about out how you're giving money away paying cash, yada, yada, yada.. up to you

I'm one of those people, but I'll also add this caveat - for used cars and smaller dealerships, cash can be fine as its cash now instead of cash in a few weeks with financing, and cashflow becomes important in those situations.

New cars and new cars with manufacturer subsidized financing is where you'll get hit for sure.

[rice rocket]

Cargurus is good, it shows you time on lot and price change history.

If they're not actively cutting prices every few weeks, probably worth reaching out to them to see why they haven't. You'll either learn (a) they think they're sitting on some gem, or (b) they're willing to move.

[jh_on_the_cape]

Thanks this is super helpful. I wasn't sure if they looked at the whole deal rather than parts. For instance, they lower the selling price to make you feel good but lower trade in value so it's the same in the end.

Originally Posted by CAAD

Depends on the dealer. If you say you are paying cash then the dealership won't get any financing reserves. Those dealers won't play ball and in turn not give you a good deal. If you run into that move on and don't do business there.

Negotiate the cost of the car first, no other factors. Don't tell them you are paying cash or that you have a trade. The car purchase is transaction #1, the trade is transaction #2, the trade is an entirely separate transaction! Go get an in-person carmax offer (not online), most dealers will beat a carmax in-person offer printout by $X. I used Carvana personally, and neither the dealer nor Carmax could even come close.

If the car has been sitting on the lot for 30+ days, they will be motivated to move the unit. I like Caredge.com , pay for one month for a few bucks. It gives you good insight on how many days a car has been sitting on a dealer's lot. The longer it sits the better, they don't want to keep paying floorplan cost on that car.

[fourflys]

Originally Posted by jh_on_the_cape

Thanks this is super helpful. I wasn't sure if they looked at the whole deal rather than parts. For instance, they lower the selling price to make you feel good but lower trade in value so it's the same in the end.

some will try this for sure.. that's why I always go in and get an OTD/Out the Door price before I talk about trades or financing.. I want to know what my out the door price is, that includes price of the car, taxes, registration, and any fees the dealer may want add on.. only after that will I discuss if I have a trade or how I'm paying.. and make no mistake, they will try and pressure you into telling them your plans right off the bat, but you have no obligation too.. also, you do NOT have to do a credit app to take a test drive.. I didn't do a credit app at all the last car I bought..

as far as your current car, a trade should be the last thing you want to consider.. sometimes we have our reasons (I've traded in plenty of cars), but is really is the bottom you'll get for your car typically..

finally, dealers are mostly starting to hurt to sell cars at this point.. I can't imagine anyone paying full MSRP on 90% of the new cars for sale at this point.. it was funny, I was walking around a Ford dealer while my Subaru was getting serviced and noticed the dealer was still trying to add on "additional dealer markup".. on most of the cars on their lot.. the funniest was probably the full size Broncos they wanted an additional $5k for.. when they 15 of them lined up and you could drive down the 101 10 miles and see 15 more.. insane..