paying cash vs financing

[FRSCoupe]

If I pay cash do I bypass the finance department and their BS trying to sell options I don't need..

Do dealers actually prefer cash or finance to close the deal? I heard with financing they also make a bit of finders fee or something.

So if I say I am buying, I don't need financing, is this an advantage to get a better deal? (buying a car in general)

[serith]

Originally Posted by FRSCoupe

If I pay cash do I bypass the finance department and their BS trying to sell options I don't need..

Do dealers actually prefer cash or finance to close the deal? I heard with financing they also make a bit of finders fee or something.

So if I say I am buying, I don't need financing, is this an advantage to get a better deal? (buying a car in general)

Dealerships make money one of four ways. MSRP, Financing, Trade-In, Add-ons (accessories, extended warranty, etc). By paying cash you're eliminating their ability to make money via financing. If you actually have thirty thousand dollars sitting in the bank, I highly suggest financing the car and paying the 1.9 or 2.9% that most banks will charge you (with good credit), and throwing all or most of that money into a mutual fund with Vanguard, Fidelity, etc. You can definitely earn more with that money working for you in the stock market with low-risk funds than the 2 or 3% you will pay to obtain financing. If you just pay cash for the car outright, will you still have an emergency fund to dip into in case something should happen? Just things to think about.

[7thgear]

Originally Posted by FRSCoupe

If I pay cash do I bypass the finance department and their BS trying to sell options I don't need..

Do dealers actually prefer cash or finance to close the deal? I heard with financing they also make a bit of finders fee or something.

So if I say I am buying, I don't need financing, is this an advantage to get a better deal? (buying a car in general)

financing is just one way that you can pay the final agreed upon price of your vehicle.

"bullshit options" are handled before that. A salesperson might give you incentives such as "if you finance through us, we'll give you this cactus," but you're free to decline.

When purchasing a car, first agree on the options and final price, then sit down and figure out how you want to pay for it. (cash, lease or finance).

the two things should not have an impact on each other

[DeeezNuuuts83]

Originally Posted by FRSCoupe

If I pay cash do I bypass the finance department and their BS trying to sell options I don't need..

Paying cash doesn't allow you to bypass the finance department, since you still need to go there to sign paperwork confirming the financial details of the vehicle purchase. It is during that process where they offer you other options, like anti-theft (usually Lo-Jack or something like that), extended warranty, extended maintenance, etc.

Originally Posted by FRSCoupe

Do dealers actually prefer cash or finance to close the deal? I heard with financing they also make a bit of finders fee or something.

Dealerships in general don't always care, particularly when it's a large enough dealership to the point where they have their own financing available, like how Toyota has Toyota Financial, or how Acura/Honda has AHFC or whatever it's called since it's not hard to get it approved, plus they make money off of it. It contrasts to ten or twenty years ago where paying in cash may have been more appealing to dealerships.

I'm not sure if there are finders fees, but when doing in-house financing through the auto manufacturer, there is some back-end commission involved in the sale.

Originally Posted by FRSCoupe

So if I say I am buying, I don't need financing, is this an advantage to get a better deal? (buying a car in general)

Again, it depends on the dealership and/or the manufacturer. Most deals that I've seen (as I have worked at a dealership before) will use the same purchase price regardless of your payment selection, though of course when paying cash, some people like to just ask for a nice round number.

[Lefty]

I just bought mine a week ago and was in the exact same position. Was going to pay for car outright, but Bank of America offered me 2.44% loan over 48 months. That is essentially free money. With the market tanking this month, go throw that money at some depressed oil stocks and you'll make 20-30% in 9-12 months. Or have it as cash reserves.....

I came into dealership with this deal in hand and they couldn't offer me any lower. You just have to go through them trying to sell you the extended warranty for about 30-45 min and tell them you are financing yourself. Decline all accessories, MSRP is pure price. Boom, you are done.

[Aznek]

Originally Posted by Lefty

I just bought mine a week ago and was in the exact same position. Was going to pay for car outright, but Bank of America offered me 2.44% loan over 48 months. That is essentially free money. With the market tanking this month, go throw that money at some depressed oil stocks and you'll make 20-30% in 9-12 months. Or have it as cash reserves.....

I came into dealership with this deal in hand and they couldn't offer me any lower. You just have to go through them trying to sell you the extended warranty for about 30-45 min and tell them you are financing yourself. Decline all accessories, MSRP is pure price. Boom, you are done.

What particular stocks are you buying that guarantee 20-30% in 9-12 months because I want some of that!

[FRSCoupe]

Originally Posted by Aznek

What particular stocks are you buying that guarantee 20-30% in 9-12 months because I want some of that!

Its Vancouver real estate

[rice_classic]

Originally Posted by Aznek

What particular stocks are you buying that guarantee 20-30% in 9-12 months because I want some of that!

No kidding. I had no idea Warren Buffet posted here!

[thill]

As others stated, you still have to deal with finance and will still get pitched all the add-ons.

As for paying cash, just do it. There are zero guarantees with any investment and instead of paying interest and having to deal with making payments, you will own the car outright and not have to worry.

I either pay cash for my cars or pay them off within 24 months and it is a liberating experience having no debt and knowing the car is yours and not the bank's whom you are indebted to.

[Turbowned]

It's opportunity cost whether or not to pay cash. If you don't mind dumping $25k into a less liquid asset than a stock or mutual fund and have extra money in case of emergency, then it's up to you! But like serith said, if you have the opportunity to finance the car at a low interest rate and keep your money invested in something that will generate more interest than the ~2% the bank is charging you, it makes a lot more sense; your money can work for you, rather than being invested in a car that will depreciate and take longer to sell than other investments.

[bimmerboy]

if you have good credit, secure a low APR %, i think you can get around 2%, and pay it off in chunks while the rest of your cash is invested.

Cash is king though, and dealers most certainly will cut you a sweet deal, however if you already have your finances ready they should be equally as happy.

[tripjammer]

Originally Posted by Aznek

What particular stocks are you buying that guarantee 20-30% in 9-12 months because I want some of that!

Buy some Facebook stock! I kid...i kid...

But yeah oil stocks are cheap right now....

[frs23]

Originally Posted by Aznek

What particular stocks are you buying that guarantee 20-30% in 9-12 months because I want some of that!

Soon the Spanish bond will get up there

[gwascopter]

Originally Posted by frs23

Soon the Spanish bond will get up there

heard mexico is actually buying spain and have the name changed to OLD MEXICO