Cash versus finance.. smaller dealer?

[Motoarch]

Dealers make a lot more on financing than cash sales. You're not going to get better deal paying cash.

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[ScottBeach]

If you talk cash in a deal -form doesnt matter. A dealer is going to make less money. And be less likely to work the price with you. I always say the same thing. Show me a quick easy Finance option with no prepayment and i will give that as part of thr deal. Once had a dealer try to call back the following week to say the loan fell thru (800 credit rating) i just drove down with a check and asked for a corrected title without a lean holder. So they lost the loan money kick back trying to play bait and switch. Sales guy called me 2 days later screaming why i backed out of the loan. Explained what the FI office did trying to switch the loan. Sales rep was at a different dealer a couple weeks later.

 

[chorky]

There's some interesting reporting rules and cash is frankly a liability because of the chain of custody.

The only time cash is advantageous to a dealer is when they've just gotten it on the lot and aren't facing any financing costs on the inventory on hand.

Nobody else expanded on it so I'm going to reinforce it. This right here. ? I put 20K down cash (in form of a check) on my gladiator. I still had to provide details of where the money came from. Bank statements, sale of my OBS 350 and how much, etc... It was a major pita! And really irritated me. I fiancned the rest. What I should have done, was put maybe 5K down for 'good faith' and negotiate a low interest rate and use the rest of the 15K for accessories. This is what I would recommend, as long as you can deal with the monthly payments. I had a goal in mind of payments that Iwanted to be under. And in all honesty, the 20K down helped, but not as much as one would think. It also didnt help that I bought in the height of the auto market... things are starting to go down now finally

Another consideration to take is to shop around different places for lower interest rates. I probably could have gotten a lower rate myself if I would have went with my own credit union, or USAA, or another vet friendly place. But I was in a pinch and a hurry so neglected to take sufficient time to do so. Now I still am in an acceptable range for myself with the terms of the loan, but probably could have gotten a better situation.

so....use some cash, but we all know accessories are soon to come so that money would probably be better spent on those items if the payments are within your budget range.

 

[ShadowsPapa]

Any benefit or additional ability to haggle when paying a large downpayment with cash, not a cashiers check..?
I've seen that people get better deals with Chrysler financial on the forums but nothing about cash.. Is it not king in relation to dealerships? Cause it's king everywhere else ; )

Why would cash matter? They still get their money no matter how you pay.
But - there can be incentives for financing.
Cash has no meaning these days.
Either you give them the money or your bank does or Chrysler Capital does - same in any case - they get their money, but they may get a kickback for financing.
In our case, they said they didn't give a rip - it was CHRYSLER that was giving the incentive for financing through them. Otherwise cash or bank financing would be identical.

Given that they have to report the cost of the vehicle, no dealer is going to risk closure and jail time for what at most is a couple hundred bucks on their end as the amount they make on the actual vehicle is pretty low and they'd only be saving on the taxes they're going to pay on their gains. The finance, warranties, and extras are where the money is at

It must appear on the paperwork in any case. Wow, agreed, anyone who suggests a dealer would prefer cash under the table hasn't run a business

Business accounts at the bank are different than personal accounts in how they are regulated or monitored or reported. Been down that road.

Heck, we even got a letter from the DNR because they believe we sell HHC (household hazardous chemicals) via my wife's quilting business. Likely they saw my big chemical orders for my car restoration.

 

[jensjer]

Why would cash matter? They still get their money no matter how you pay.
But - there can be incentives for financing.
Cash has no meaning these days.
Either you give them the money or your bank does or Chrysler Capital does - same in any case - they get their money, but they may get a kickback for financing.
In our case, they said they didn't give a rip - it was CHRYSLER that was giving the incentive for financing through them. Otherwise cash or bank financing would be identical.



It must appear on the paperwork in any case. Wow, agreed, anyone who suggests a dealer would prefer cash under the table hasn't run a business

Business accounts at the bank are different than personal accounts in how they are regulated or monitored or reported. Been down that road.

Heck, we even got a letter from the DNR because they believe we sell HHC (household hazardous chemicals) via my wife's quilting business. Likely they saw my big chemical orders for my car restoration.

I use cash all the time and offers me the ability to haggle, but that comes with buying local, and not giant conglomarates

 

[TigerInFL]

they don't want the headache and what it really boils down to is the bank. if you go in a remove (i think it's now $1,200.00) your friendly bank has to know "why?". if you tell them it's your money, they don't care. actually, you may not know but your money in the bank is technically not your money anymore.

should your bank go belly up, they will payoff all their debts with your money first. thanks franklin dodd.

one of the real reasons they "must know" what you are going to do with your money is ... get this ... is for your protection. they want to make sure you are not being scammed. i don't need anyone else watching me or my money.

the other reason is the dealer doesn't want to deal with cash is they have to fill out tons of paperwork. the govt is afraid a drug dealer is there to laundry money. can you tell me the last time a drug dealer got busted for paying cash for a car?

what it really is about is control folks. i'll let you figure out who is trying to control what.

 

[ShadowsPapa]

I use cash all the time and offers me the ability to haggle, but that comes with buying local, and not giant conglomarates

I buy local - and they don't give a rip. Why would they?
It's the same for them either way. Check or cash -
When people ask me how I prefer to be paid for my restorations - I don't care. Cash, check, paypal, whatever - trades are often better. Give me a couple of parts instead.
Unless they are cheating on their paperwork (which could bit them in the ass in case of a "problem) I'd like to know how it can matter.
You pay 50K for a truck - you get a better deal with cash?
Why? A check is worth exactly the same.
So you are dealing with liars, money launderers and other thieves?
Real nice.
If someone suggested to me I'd get a better deal if we leave certain things, uh, unreported, I'd walk away. If they'll cheat on that - what about my deal?
It all spends the same to them. Financing they get the whole amount up front a direct transfer to their business account. So what's the gain with cash?
Chrysler Capital - they get the whole amount as a direct transfer to their business account - where's the loss or gain?

Sounds like under-the-table and that indicates to me I'm dealing with an even less honest dealer than many of the others.

Sorry, my ethics won't allow it.

 

[ShadowsPapa]

Let's make this simple - unwind it a bit:

In exacting bullet points - exactly - how does or could using cash get you a better deal. Explain the advantage of cash and how an honest dealer can give a better deal with cash.

In the points - keep in mind:
Financing through Chrysler Capital puts the entire purchase price (monies after trade allowance) into the dealer's account.
Financing through your bank or another bank puts the entire purchase price (monies after trade allowance) into the dealer's account.
Writing them a check for the amount puts the same money as above into the dealer's account.

Buy a $50,000 truck. No trade. After doc fees, taxes and license, etc. you owe them 52K
You pay cash, check, finance through a bank or CC - they get 52K
Their account shows 52K going in.
They take the license and other fees and pay to the county for your plates or whatever.
Even the bean counters at a small mom and pop shop have to break out every penny and account for it.
So how is cash, the exact way - explain exactly the process, how and why, is cash a benefit and going to get a better deal?

Not just "because it is" or "because they give me a better deal" or "I get more negotiating power" - explain, or as in HS - show your work.

 

[jensjer]

Let's make this simple - unwind it a bit:

In exacting bullet points - exactly - how does or could using cash get you a better deal. Explain the advantage of cash and how an honest dealer can give a better deal with cash.

In the points - keep in mind:
Financing through Chrysler Capital puts the entire purchase price (monies after trade allowance) into the dealer's account.
Financing through your bank or another bank puts the entire purchase price (monies after trade allowance) into the dealer's account.
Writing them a check for the amount puts the same money as above into the dealer's account.

Buy a $50,000 truck. No trade. After doc fees, taxes and license, etc. you owe them 52K
You pay cash, check, finance through a bank or CC - they get 52K
Their account shows 52K going in.
They take the license and other fees and pay to the county for your plates or whatever.
Even the bean counters at a small mom and pop shop have to break out every penny and account for it.
So how is cash, the exact way - explain exactly the process, how and why, is cash a benefit and going to get a better deal?

Not just "because it is" or "because they give me a better deal" or "I get more negotiating power" - explain, or as in HS - show your work.

what? I didn't quite understand can you retype all that? ; )

 

[Snake Eyes]

I tried to buy a new vehicle on my rewards card to get 1.5% cash back and the jerks wouldn't take it ?.

If you already have a structured investment plan then put the bare minimum down and finance all that you can. Even at today's rates, your money is far better off working for you while you make payments.

We actually once bought a car with our credit card back in 2007. The dealer accepted it and we called the card company to let them know we were going to do it. Paid off the card the next day and got the card rewards.

 

[BourbonRunner]

In the points - keep in mind:
Financing through Chrysler Capital puts the entire purchase price (monies after trade allowance) into the dealer's account.
Financing through your bank or another bank puts the entire purchase price (monies after trade allowance) into the dealer's account.
Writing them a check for the amount puts the same money as above into the dealer's account.

You are correct-- it all goes to the bottom line. Cash/Credit doesn't matter because the dealer sees a net of $50K to the bottom line.

But there are other perks that the dealer can play into and those are definitely part of the negotiations from their end.

Dealers get perks/spiffs for using in house financing and especially so if its the manufacturer's finance arm. They want you to use their in house first. Even Gupton gives a discount if you use their's over your own. Unlike the mortgage industry, auto financing is not heavily regulated and these perks are not typically disclosed to the buyer.

Secondly, as I mentioned above-- the dealer pays to finance the purchase of their inventory. The longer the vehicle sits on the lot the more it costs them. If they sell it right off the truck they don't incur charges and thus the sale makes them more money, too.

Then, going back to my first statement: If you refi or pay off immediately after the loan posts, the dealer actually loses potential earnings on the loan, too. Which is why Gupton (I hate to use them as an example but it does track) require you make a certain number of payments before you refi/pay off. In the mortgage world this is called a take back and it costs the lender a shitload of potential earnings/money if you refi too soon.

 

[Deleted member 53332]

Dealers make a lot more on financing than cash sales. You're not going to get better deal paying cash.

This. Let them do the financing with Chrysler so they get their incentives, split the incentive with them and pay it off in 30 days. Just make sure there is no early payment penalties. The old “cash buyer” thing doesn’t carry much weight today, except at a shady used car lot.

 

[WILDHOBO]

They typically claim to not accept credit cards, and won’t for the entire purchase. But I’ve purchased our last four vehicles with large down payments on 2.5% cash back cards. The best I’ve done is 10k on a card total. I always offer a 5k refundable (in writing) payment to hold the agreed purchase price remotely. I do all negotiations before showing up, and get it in writing in the form of a purchase agreement. Then when closing at the dealer, I pull out the card and ask to put 5k down in addition. At that point, they don’t want to lose the sale they’ve already spent time on. They’re 20 minutes from getting me out the door. Then I get the extra cash back from the card funds as a part of my discount.

 

[MPMB]

Let's make this simple - unwind it a bit:

In exacting bullet points - exactly - how does or could using cash get you a better deal. Explain the advantage of cash and how an honest dealer can give a better deal with cash.

In the points - keep in mind:
Financing through Chrysler Capital puts the entire purchase price (monies after trade allowance) into the dealer's account.
Financing through your bank or another bank puts the entire purchase price (monies after trade allowance) into the dealer's account.
Writing them a check for the amount puts the same money as above into the dealer's account.

Buy a $50,000 truck. No trade. After doc fees, taxes and license, etc. you owe them 52K
You pay cash, check, finance through a bank or CC - they get 52K
Their account shows 52K going in.
They take the license and other fees and pay to the county for your plates or whatever.
Even the bean counters at a small mom and pop shop have to break out every penny and account for it.
So how is cash, the exact way - explain exactly the process, how and why, is cash a benefit and going to get a better deal?

Not just "because it is" or "because they give me a better deal" or "I get more negotiating power" - explain, or as in HS - show your work.

I asked once if my cash down payment could be applied to the purchase price before the loan and taxes (WA state has ~10% sales tax) and they said no. The down payment ends up covering taxes, so they don't get rolled into the monthly. I would love to screw the state out of a couple hundred bucks of tax theft.

While cash has been considered "king" for decades (gold before it), today it's usually best to use OPM.

 

[MPMB]

They typically claim to not accept credit cards, and won’t for the entire purchase. But I’ve purchased our last four vehicles with large down payments on 2.5% cash back cards. The best I’ve done is 10k on a card total. I always offer a 5k refundable (in writing) payment to hold the agreed purchase price remotely. I do all negotiations before showing up, and get it in writing in the form of a purchase agreement. Then when closing at the dealer, I pull out the card and ask to put 5k down in addition. At that point, they don’t want to lose the sale they’ve already spent time on. They’re 20 minutes from getting me out the door. Then I get the extra cash back from the card funds as a part of my discount.

So, you alter the already agreed upon purchase agreement at time of purchase? Interesting.

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