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Alot of dealers want to know up front whether you are going to pay cash or apply for financing on a new car.
If you pay cash, should you expect a much better price than if you are looking to get dealer financing?
I was thinking that in these times dealerships might rather have cash, and would be willing to make a deal for it.
I think most dealers prefer you finance - because they make money on it (if you are financing through them). It also makes the price less clear - because they can say "your payments will only be $400 per month" instead of telling you how much the car will cost.
If you are financing on your own (bank, credit union, etc.) I don't know if it makes much difference to them.
You could always agree to finance with an obscene interest rate, and negotiate on the price of the car to get it lower. Then pay the loan off with cash the next month.
You could always agree to finance with an obscene interest rate, and negotiate on the price of the car to get it lower. Then pay the loan off with cash the next month.
You could always agree to finance with an obscene interest rate, and negotiate on the price of the car to get it lower. Then pay the loan off with cash the next month.
That's hillarious.
I've heard that there are loans that basically don't allow you to do this though. You have to basically pay off the interest that would be earned over the term of the loan as well.
When I bought my car earlier this year, they actually tried to talk me out of using cash. They were saying how the economy is bad and that I might want to hold on to my cash in case of an emergency. My DH told him dont worry about our finances..lol. Now I know why. They wanted that interest. Hmm..you learn something new everyday.
Alot of dealers want to know up front whether you are going to pay cash or apply for financing on a new car.
If you pay cash, should you expect a much better price than if you are looking to get dealer financing?
I was thinking that in these times dealerships might rather have cash, and would be willing to make a deal for it.
Dealers make money on financing.
There is no better "cash deal".
It also depends on your financial situation. If you can get a loan at 1.9% or 2.9% or something low like that, why not finance it? Get some credit and put the money into something that returns a better yield.
It's not a simple yes or no question, it depends on the person.
Be careful when you finance. If they try to sell you on an extended warranty and they tell you it only costs X dollars more per month, make certain that they are not extending the terms of the financing from say 60 to 62 months. Dealers can be quite sneaky that way. We found out the hard way when our payoff figure was much higher than we anticipated.
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