Buying a Used Car (from a dealership) With Cash

Im no expert but they probably want you to finance in house so they can make money that way, but I think youre crazy if you dont think they prefer cash as long as their margins are made. They want to move inventory and cash gets it off their lot with no hassle if a price can be met.

 

Finance in house then just pay it off.

you won’t get a cash discount at a dealership, it doesn’t exist.

 

Yeah, just finance in house and pay it off as soon as the note comes. You'll probably end up paying about $30-60 bucks extra, but at least the salesmen are willing to deal with you. Dealerships make their money in the finance and service department. I don't think there is necessarily an extra costs for paying cash, the problem is they won't be willing to deal and negotiate with you as much.

You could just go to carmax or auto direct (or any other equivalent, carvana?) and avoid all the hassle and pay the price they ask for.

 

This. get the price you both agree on.

if anything since it sounds like you want to pay a huge chunk off, just put a bigger down payment down than normal

 

So recent experience - helping family member buy a car at dealership, it definitely didn't help/matter having cash on hand - like we had a direct cashiers check. With that said it can help in negotiating if you find someone willing to play. I was able to get a car that should have been closer to 11.5 +ttl down to 10k out the door... Unfortunately it did take a while to find someone and a car worth bargaining for, like some were just bad...

I work a lot on cars so... I definitely frustrated some sales people (not on purpose but it limited certain makes and models entirely, ie cvt = no on most makes, or knowing about lawsuits), I highly recommend typing year/make/model and lawsuit in Google or looking at specific car forums... ie knowing problems on certain years or makes, it helped a lot. If you don't do a lot of car stuff I'd recommend having someone come with or even investing in a cheap code reader. For example, I knew on this one the check engine light (MIL) hadn't been on, or recently reset etc and driven a certain amount with it off. Helped us avoid a lot of trash later down the road since I can only inspect so much (can't exactly take apart the whole car there).

Also, I flat out told them I repair any and everything, showing pics of various teardowns I'm working on.. They never once tried to add bs on any of the sales because I told them it's not necessary and they could tell I knew what was up (I mean rarely you'll get sales guys that repair stuff but you might find some).

Lastly, and I know you know this, just be prepared to walk, I think in a period of 2 days went through 5 dealers to find the right one. And don't ignore problems/watch for coastal cars/cars driven in the Salt. I saw a fairly new car that wasn't taken care of have all kinds of bad rust due to it being driven all the time on the salt.

I think I might have been able to get 9.5, but my family member was ready to be done, it's kind of exhausting. I also noticed wiggle room / dropping a lot off was harder on used - vs new (I mean when comparing dealer to individual). And I think a lot of it has to do with carmax type places.

 

Car loans aren't like home loans where you can pay principal amount and pay less interest. The second the loan paperwork is signed you are paying the same amount whether you pay it immediately or over 4 years or whatever. Unless you're saying the total loan amount (including fees and interest) is actually going to be about the same as the agreed upon cash price, it is hard for me to imagine one would be paying less to finance than to buy outright with cash.

But I could easily be wrong. I've never been able to pay cash for a vehicle before.

 

1. Find the car you like. Rub your chin but make no commitment to the salesman.
2. Lob an anonymous call to dealer from a payphone saying you're pretty sure the person who sold them that car has died of COVID-19 after a trip that he made to Italy before driving the car to them.
3. Return and negotiate new price.

 

A great video on the subject @ima_drummer2k

 

It's a simple interest loan. I've done this once already and I paid it off in 30 days even though I signed the deal for four years. I only paid what had accumulated in interest in 30 days. My interest rate was 3%. I made a huge "down payment" and did a $10k loan which I paid off as soon as the bill came.

 

If you're paying cash, why bother with a dealer? Find an individual and nix the middleman. With an individual owner, cash definitely is king with negotiation.

 

This is also a good approach.

 

Not the case. I've paid off a car and only paid the interest owed. Also - there typically aren't a ton of fees (outside of what they're going to nickel and dime you for anyway) when you finance a car (IE, not like closing costs of a house).

Since I knew I was going to pay it off within a month, I didn't even bother negotiating the interest rate.

 

Right, you can do this on any loan (I've seen, unless there's something odd/off/really bad loan?) and even make payments directly to the principal, ie you make the normal payment and then a 2nd payment towards the principal (you have to state this to the place that owns the loan). If for some reason there's fine print preventing this extra payment, then save money up and ask for the payoff amount, it will be substantially less, just like you mention. Ie you only paid the interest for 30 days for example and not the 5 years on the loan.

 

Exactly.

 

This might just work.... Haha, suddenly I'm in the market for a car

 

got myself a car for half the price. thanks @B-Bob breh

 

There are some loans with a penalty for paying it off too soon.

 

@ima_drummer2k dm me the vin, mileage, and a link to the car listing and I can tell you what to offer.