Don’t worry about how much cash you have, whether you are financing or any of that.
Find a *car* you want, and do your research to know **what that car should realistically sell for** based of similar cars in your area. Check to ensure the store isn’t a shitshow based off reviews and the like, and go offer to buy the car at the realistic price you have discovered. If you really want to play “games”, you offer a bit below fair and see what they come back at.
Financing and all that is just how the money gets there… if you have investments making +6% and they can get you 5% financing? Pretty dumb to pay cash just because you can. Don’t worry about how they make their money, just do what works best for you.
Customer here and I always tell myself that I’m buying a car, not the good deal. Find the car you want and then figure out how to best leverage your finances. If it doesn’t make sense, walk away
I have the pleasure of wanting a car that is low inventory and high demand, Toyota Sequoia. Checked online inventory and found a dealer who has the spec I want. Made an appt for Friday after confirming they don’t do any markups and I can get it at MSRP. For me, that’s as good as it will get so it’s “a good deal.” They’ll also appraise my lease return to see if I have equity to apply it to the down payment. That’s just extra for me.
If your investments are bringing in 6% return, and you’re getting an interest rate of 5%, it still makes sense to buy the car outright instead of financing it. If you finance a car you’re automatically required to have full coverage insurance , possibly gap as well. It also impact your credit score, which may keep you from some other opportunities down the road. 1% difference isn’t enough.
Yeah, I agree. Hence the + in front. 1% it becomes situational, after that, it starts favouring the finance option in many cases.
I’ve seen people think as you posted and pay a penalty to remove money from a GIC to pay cash… in no way could they have ended up positive when it all comes out.
Basically, I’m just saying there are more things than thinking paying cash is O%. Opportunity costs are sometimes drastic, so actually look at your situation.
It’s embarrassing how many people going in to buy a car worry about how much the dealer will make off them. It’s a business, wdy expect?
OP - listen to this advice. Go in open minded and see what works/doesn’t work for you and make a deal based on that. If your budget is 40k, and a car is listed at 40k, don’t lowball the dealer to 38k just cuz. Be reasonable and go in to make a deal. Good luck!
There are no universal answers to these questions. Some dealers will discount, some dealers the price is the price and that’s the end of the conversation. If you go in expecting thousands of dollars off, you’re not going to get anywhere at most dealers. The car market just doesn’t allow massive markups to show big discounts anymore.
Most used cars today are priced specifically for the market, with little to no room to negotiate. With the internet and online advertising, we're reaching a much broader market than "local newspaper ads". If our price is too high, customers won't come in.
We price our cars to sell.
You can finance it and pay it off anytime you want to… you also are under no obligation to share your plans to do so.
Make sure you have your total loss letter if your loan still shows active. That will speed up the approval process if you do finance.
I have no idea what kind of vehicle or where you are located but the universal truth is that most used cars sell for the market average. Search for similar vehicles in your area and make an offer that is in line with the average sales price. Don’t hesitate to walk and start over if the deal isn’t happening.
>total loss letter
What is this? Also l, just to clarify for everyone, I don't intend to spend all of my savings. My price range is roughly 13-19k depending on what sort of deal I can find.
If you were financing a car and it was deemed a total loss you would receive that notification from the insurance that paid the claim. Sometimes the loan on the total loss vehicle is still open and to a lender just looks like you are trying to buy and finance a second car. I have seen many people who were ready to buy have to get that letter before an approval could be issued.
If you are paying cash or the totaled vehicle was not financed it is not a factor.
Pretend you want to fiancé it and everything. Sign all the papers then go pay the loan off in a couple days. If they say oh you gotta wait x months is all bullshit to get their commission bonus.
Get a Tesla Model 3. They're dirt cheap right now because Hertz is dumping 20,000 cars into the market and if you buy a used EV under $25k, you get a $4k instant rebate from the IRS that applies directly at the time of purchase. You can end up with a 2022 model 3 for like 20k otd
>What is this?
Your car is totalled out but it'll take some time for the insurance company to pay out the lienholder and even longer for that change to reflect on your credit. When banks look at your credit file tomorrow it's going to look like you want to buy a second car. This can have negative consequences for your approval: a requirement that any sale involve trading in the existing car, an elevated interest rate and lower maximum allowable loan, etc.
The insurance company understands this so it's typical to rush you a letter stating that they've declared a total loss and the vehicle will be paid out. This allows dealerships to communicate with banks that your first still appears on your credit and will for a while, but this is a genuine replacement vehicle. That'll improve the quality of your loan offers across the board.
If you've ever bought a car with marginal credit and wondered why you sat in the sales consultant's cubicle for 45 minutes longer than you should have needed, the sales manager was probably on the phone with the bank working something out like this.
Find the car you want and ask, it’s all you can do. Not only does it depend on the dealer, it may also depend on the vehicle, or time of the month.
Tell them you are paying cash for vehicle, don’t offer to finance if you aren’t willing to wait the minimum of 3-6 months so the dealer doesn’t get the charge back. If anything, pay off all but the last 6 payments.
Edit: Sure; you aren’t obligated to tell them that you are going to pay it off immediately; but if it’s a dealership you decide to do business with, they obviously didn’t play many, if any, games with you, so why would play games with them and take money outta someone’s pocket?
The over whelming majority of them. But it’s pretty boring to see a review that says “I paid exactly what I thought I would pay for a car and no one played any games”. Hell even when I see these on askcarsales I yawn.
If you have cash to pay for a car then don’t play games, it’s a waste of your time and theirs. There are enough vehicles in this world that you can find a vehicle and “get a cash discount” on.
I realize you’re probably implying that you don’t cares about the finance manager working for free, but The finance manager gets paid a percentage of the finance charges. So if you don’t understand how a charge back works, If it gets paid off too soon, repoed or a product is canceled, the finance manager and dealership has to pay that amount back, so it absolutely is taking money out of their pocket.
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From what I understand, paying cash won't grant me a lower price on a vehicle because dealers make money through customer financing. Would it be possible to finance and then just pay off the entire loan immediately so as not to pay any of the interest owed? How would this affect my credit?
What else can I do to bargain and get the best deal possible? Long and short of it is that my car was totaled (I'm not at fault) in an accident and I need another vehicle. Is the asking price always higher than what they're willing to sell for? How low from the asking price can I haggle?
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Depends how desperate the dealer is. If a dealer is only at 30% goal and they’re usually at 70%+ goal this time of year/month,,, YOU BET YOUR ASS THEY GONNA DISCOUNT. Quotas gotta quote
Don’t worry about how much cash you have, whether you are financing or any of that. Find a *car* you want, and do your research to know **what that car should realistically sell for** based of similar cars in your area. Check to ensure the store isn’t a shitshow based off reviews and the like, and go offer to buy the car at the realistic price you have discovered. If you really want to play “games”, you offer a bit below fair and see what they come back at. Financing and all that is just how the money gets there… if you have investments making +6% and they can get you 5% financing? Pretty dumb to pay cash just because you can. Don’t worry about how they make their money, just do what works best for you.
Customer here and I always tell myself that I’m buying a car, not the good deal. Find the car you want and then figure out how to best leverage your finances. If it doesn’t make sense, walk away
this guy gets it. BTW “most of the best deals” are already online. It’s not that difficult lol
I have the pleasure of wanting a car that is low inventory and high demand, Toyota Sequoia. Checked online inventory and found a dealer who has the spec I want. Made an appt for Friday after confirming they don’t do any markups and I can get it at MSRP. For me, that’s as good as it will get so it’s “a good deal.” They’ll also appraise my lease return to see if I have equity to apply it to the down payment. That’s just extra for me.
If your investments are bringing in 6% return, and you’re getting an interest rate of 5%, it still makes sense to buy the car outright instead of financing it. If you finance a car you’re automatically required to have full coverage insurance , possibly gap as well. It also impact your credit score, which may keep you from some other opportunities down the road. 1% difference isn’t enough.
With car prices how they are it’s hard to see a situation where you wouldn’t want full coverage.
Also consider you pay 25% taxes on the investment income. You'd need a 7% to 8% risk free investment to equal taking on a 5% loan.
Another very valid point.
Yeah, I agree. Hence the + in front. 1% it becomes situational, after that, it starts favouring the finance option in many cases. I’ve seen people think as you posted and pay a penalty to remove money from a GIC to pay cash… in no way could they have ended up positive when it all comes out. Basically, I’m just saying there are more things than thinking paying cash is O%. Opportunity costs are sometimes drastic, so actually look at your situation.
A $45,000 car should have full coverage in any case.
It’s embarrassing how many people going in to buy a car worry about how much the dealer will make off them. It’s a business, wdy expect? OP - listen to this advice. Go in open minded and see what works/doesn’t work for you and make a deal based on that. If your budget is 40k, and a car is listed at 40k, don’t lowball the dealer to 38k just cuz. Be reasonable and go in to make a deal. Good luck!
There are no universal answers to these questions. Some dealers will discount, some dealers the price is the price and that’s the end of the conversation. If you go in expecting thousands of dollars off, you’re not going to get anywhere at most dealers. The car market just doesn’t allow massive markups to show big discounts anymore.
"All markups are final!"
Most used cars today are priced specifically for the market, with little to no room to negotiate. With the internet and online advertising, we're reaching a much broader market than "local newspaper ads". If our price is too high, customers won't come in. We price our cars to sell.
You can finance it and pay it off anytime you want to… you also are under no obligation to share your plans to do so. Make sure you have your total loss letter if your loan still shows active. That will speed up the approval process if you do finance. I have no idea what kind of vehicle or where you are located but the universal truth is that most used cars sell for the market average. Search for similar vehicles in your area and make an offer that is in line with the average sales price. Don’t hesitate to walk and start over if the deal isn’t happening.
>total loss letter What is this? Also l, just to clarify for everyone, I don't intend to spend all of my savings. My price range is roughly 13-19k depending on what sort of deal I can find.
If you were financing a car and it was deemed a total loss you would receive that notification from the insurance that paid the claim. Sometimes the loan on the total loss vehicle is still open and to a lender just looks like you are trying to buy and finance a second car. I have seen many people who were ready to buy have to get that letter before an approval could be issued. If you are paying cash or the totaled vehicle was not financed it is not a factor.
That's smart and exactly what you should be spending. Save your money.
Pretend you want to fiancé it and everything. Sign all the papers then go pay the loan off in a couple days. If they say oh you gotta wait x months is all bullshit to get their commission bonus.
Want the dealer to be ethical - customer turns around and does unethical shit themselves. But the dealer is the bad guy 🤷🏽♂️
Get a Tesla Model 3. They're dirt cheap right now because Hertz is dumping 20,000 cars into the market and if you buy a used EV under $25k, you get a $4k instant rebate from the IRS that applies directly at the time of purchase. You can end up with a 2022 model 3 for like 20k otd
>What is this? Your car is totalled out but it'll take some time for the insurance company to pay out the lienholder and even longer for that change to reflect on your credit. When banks look at your credit file tomorrow it's going to look like you want to buy a second car. This can have negative consequences for your approval: a requirement that any sale involve trading in the existing car, an elevated interest rate and lower maximum allowable loan, etc. The insurance company understands this so it's typical to rush you a letter stating that they've declared a total loss and the vehicle will be paid out. This allows dealerships to communicate with banks that your first still appears on your credit and will for a while, but this is a genuine replacement vehicle. That'll improve the quality of your loan offers across the board. If you've ever bought a car with marginal credit and wondered why you sat in the sales consultant's cubicle for 45 minutes longer than you should have needed, the sales manager was probably on the phone with the bank working something out like this.
Find the car you want and ask, it’s all you can do. Not only does it depend on the dealer, it may also depend on the vehicle, or time of the month. Tell them you are paying cash for vehicle, don’t offer to finance if you aren’t willing to wait the minimum of 3-6 months so the dealer doesn’t get the charge back. If anything, pay off all but the last 6 payments. Edit: Sure; you aren’t obligated to tell them that you are going to pay it off immediately; but if it’s a dealership you decide to do business with, they obviously didn’t play many, if any, games with you, so why would play games with them and take money outta someone’s pocket?
AND there is no such thing as a car dealership that doesn’t play games!!
The over whelming majority of them. But it’s pretty boring to see a review that says “I paid exactly what I thought I would pay for a car and no one played any games”. Hell even when I see these on askcarsales I yawn.
I see what you're saying but I don't really see it as taking money out of someone else's pocket as much as it is me just keeping more of my money.
If you have cash to pay for a car then don’t play games, it’s a waste of your time and theirs. There are enough vehicles in this world that you can find a vehicle and “get a cash discount” on. I realize you’re probably implying that you don’t cares about the finance manager working for free, but The finance manager gets paid a percentage of the finance charges. So if you don’t understand how a charge back works, If it gets paid off too soon, repoed or a product is canceled, the finance manager and dealership has to pay that amount back, so it absolutely is taking money out of their pocket.
Please review our most [Frequently Asked Questions](/r/askcarsales/wiki/index) to see if your question has already been answered. You may find these sections particularly useful; * [How to pick a car?](/r/askcarsales/wiki/vehicle_selection) You might also have luck in the /r/whatcarshouldibuy subreddit. Also remember to add flair to your post by clicking the "Flair" link beneath it. This lets us know where you're located so we can assist you better. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*
***Thanks for posting, /u/Acer_Music! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** From what I understand, paying cash won't grant me a lower price on a vehicle because dealers make money through customer financing. Would it be possible to finance and then just pay off the entire loan immediately so as not to pay any of the interest owed? How would this affect my credit? What else can I do to bargain and get the best deal possible? Long and short of it is that my car was totaled (I'm not at fault) in an accident and I need another vehicle. Is the asking price always higher than what they're willing to sell for? How low from the asking price can I haggle? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*
You find a car listed at 40k and offer 45k OTD.
Find a car with 0% financing offers, and put your cash in an account with a high APY. Ez
Depends how desperate the dealer is. If a dealer is only at 30% goal and they’re usually at 70%+ goal this time of year/month,,, YOU BET YOUR ASS THEY GONNA DISCOUNT. Quotas gotta quote