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By the end of this year I plan on buying a new car. I paid cash for my last car and will have the cash to buy this car.
I do not want to take on a car loan , however, do you think I can save money by going ahead and financing a car and maybe getting a slightly better price and then when my first payment on my car loan comes due, just pay off the entire loan? Are there some hidden fees or trap doors that I need to be aware of and does this seem like a good strategy?
By the end of this year I plan on buying a new car. I paid cash for my last car and will have the cash to buy this car.
I do not want to take on a car loan , however, do you think I can save money by going ahead and financing a car and maybe getting a slightly better price and then when my first payment on my car loan comes due, just pay off the entire loan? Are there some hidden fees or trap doors that I need to be aware of and does this seem like a good strategy?
Sounds like it would probably work to get you the best actual price because they think they are making up the difference on the financing spiff they get.
OK but the same question applies. What if I finance the used car then pay off the loan first thing? Would that save me money?
Usually loans onn used cars have higher interest rates from the dealer.
IMO I like simplicity...I settle on a price I AM HAPPY with and pay cash. I don't like dealing with them any longer than I have to. 15K???...ok here is the check and have a nice day. I don't think financing vs buying in cash will save you enough money to worry about. If you have the cash...pay it and go on your way.
There's not really going to be a price difference except of course factory cashback finance deals where you choose between 0% interest and some money on the hood where you'll pay less if you finance elsewhere or pay cash.
I've always wondered about the idea of taking the 40K that would have paid for the car upfront, but instead, put the 40K in an account, and go for the 0% financing with an automatic draw on the account with the 40K......no worries about the payment, but if an emergency comes up, you can go back to that account.
I never discuss method of payment until we have agree on a final price
This.
I have done this with every car I've ever bought, and paid cash for all. But you have to be prepared to tell them to buzz off and take your business elsewhere if they try to pull shenanigans on you once the price is agreed on. Once I've walked away and taken my business to another dealership, the other two instances have been pretty painless.
Both of our cars were purchased used with 4 years and 80K miles on the clock and were purchased in cash for 40% of the original price. I've never financed a car because I don't like the thought of being upside-down on anything; however, financing is ridiculously cheap right now. I see 0% financing offers for new cars, .99% for used cars <3 years old), and 1.49% for refinanced car loans up to 60 month terms. I'm up 8% in this sideways stock market this year. It would be a no-brainer for me. Go find outside financing and make sure there's no pre-payment penalty.
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