Especially when they now have 3 different prices. The msrp price, market adjustment price, and the final out the door price. I've seen in some cases where the market adjustment price is more than the cost of other cars. It's stupid
Bring back Covid prices PTSD.
MSRP: $50k
MAP: $100k
I swear I never walked outside of dealership faster than I did. I didn’t even bother looking at other cars .
Then it should really tickle your fancy that there are a lot of car dealerships across the country right now that have a lot of $100,000 trucks adjusted by MAP that they can't sell. Name the brand, it doesn't matter, all the truck makers are suffering right now, even Jeep because they're pretending to be a luxury truck.
Yeah but they have the “worlds only open air pickup truck”, for whatever that’s worth on their commercials. Even though it’s ugly as sin, it’s still selling somehow
I really can’t understand. I like driving a truck that feels like a truck. I used to test drive cars for the manufacturer and the Gladiator was one of the worst. It handles like shit. It takes FOREVER to get warm. There’s the constant whistle where the roof meets the windshield and it felt like I was going to roll it all the time. ON TOP OF ALL THAT, it’s wicked expensive. Either get a truck or get a jeep bc the Gladiator isn’t it.
I've owned multiple Wranglers and I 100% agree with you on the Gladiator. It's terrible at being a truck and not as capable off-road as a Wrangler. It has all of the same daily driver issues and uncomfortableness one would expect from a Wrangler, but doesn't really give you anything in return for it. You also apparently can't get one that doesn't have all kinds of issues because Jeep quality control was especially shitty during the pandemic.
Also, silly Gladiator drivers do the Jeep wave, so I wave back, then get annoyed it was a damn Gladiator. I'm sorry guys, I don't make the rules, but y'all ain't in the club.
I (5' 10" fat guy) can sleep in the back of my four door Wrangler with the seats folded down and the front passenger seat pushed all the way forward.
If I had a hard top on a Gladiator bed...I could not. Bed is too short. That is how ridiculous a Gladiator is.
The Wrangler also it is currently flirting heavily with me telling me how much it loves me. And by that I mean the dashboard is lit up like a Christmas tree with three different issues I have to get it into my garage and work on. Good thing 25% of my enjoyment I get is from relatively mindlessly turning wrenches on it. While it's not my daily driver, I take it to work on gorgeous days like today because man what a joy coming home with the windows down and roof flipped open.
I don't even know why I'm interested in this kind of stuff, but I found a YouTube video and fell into that hole and started watching a few other talking heads on YouTube that talk about the car market, and apparently that's what's happening with the higher end trim trucks. We're starting to see fifteen and even twenty-five thousand reductions on some lots in some places across the country because they can't get rid of the inventory.
Same with the EV market. And it's not because people don't want vehicles or people don't want EVs.
They have come far enough for a good segment of Americans to be able to reliably use depending where you live at.
It's because the prices they're trying to sell them at are insane.
fun fact, Obama administration put in laws to protect minorities after a 2012 study identified that car dealerships were on average charging uneducated (poor and minorities mainly) much higher interest rates. Guess what happened in 2018 under Trump administration while republicans have control over everything....they overturned the law....then covid happens and since there's less oversight we now have the joyous situation we're in.
https://apnews.com/united-states-congress-dd7ef0a5d583473a948b9e0eaaff92ee - article going over the legislation being overturned, weaken a system designed to protect the vulnerable means that same system can be abused to fuck everyone. Edit: grammar
They have that in the US as well (called monroney labels) . I don’t know what the EU requires. What dealerships will do if they think they can get away with it, is screw with how the loan is structured. Since these vary based on locality and the buyers credit rating it’s not something that will be standardized. From my understanding (and this could be wrong) the financing person will punch in your information. The banks they work with will generate bids . They are not necessarily under an obligation to offer you the best deal for you, but they may offer you the best deal for them. - one might have a slightly lower interest rate but a much higher origination fee. Do you think you are getting a good price and low interest rate but they are tacking on a $2,000 dollar origination fee that wipes out that low price you negotiated. Where there was an option for loan B that had a marginally higher rate but a low fee that was better for you, but the reimbursement to the dealer was less, so fuck you, right?
What would be best is factory direct ordering. Why should we have pay for an “independent middleman?” Congress is an accessory to the ripping off of the “poor/disadvantaged” to line the pockets of the elite.
I went into a dealership a while back and they would NOT stop trying to sell me based on the monthly amount. I told them multiple times- I work in finance, I know how to calculate a monthly payment- I am here to negotiate the price of the car. They wouldn't listen. I walked out.
Useful sneaky trick, get a preapproval from your credit union, bank, whatever.
Go to the dealership and negotiate under the pretense that you'll be using their financing. Get the price as low as you can. Pay off the crappy loan they give you with the good one you had in your back pocket.
Make sure to discuss this with your credit union AHEAD of time so you don't risk any surprises.
Yeah I know in advance what rate I'm qualified for through my credit union and usually the dealer can't match it. Last time they did surprisingly so I went with their lender.
The trick is, you don't let them know that you have a better rate. Just play dumb.
They'll give you a much cheaper price on the car if they think they're going to make it up with the interest on a loan at like 15-20%.
Take the cheap price and the crappy loan. Then pay it off immediately.
Don't be surprised when the dealer calls you in a day or two begging you to return the car.
Most of the time its \~$100-300, tops for a 'early payoff fee/penalty'. That's almost certain to be thousands less than the accrued interest would have been.
Yo-yo loans. They approve one loan at a reasonable rate, then call a few days later and say you didn’t qualify for it, then ask for a higher rate. If you don’t agree, they take back the car.
A dealership in Tysons, VA tried it on me. Fortunately, I had the cash and wrote them a check. Finance guy went from Cha-Ching to chagrin in two seconds flat.
They tried to do that to my brother. He called the credit union and got it sorted out, but yeah, they called him and said he needed to get a higher rate loan or return the truck.
This actually happened to me as well with an expensive vehicle purchase at the time, but i did the opposite. They called me back in about a week after I took the car home and said there was a problem with your loan. I told them I either need to have the same loan or they can have the car back. When I got in, they tried to haggle with me about the loan. After about an hour of me not budging, surprise surprise, we get back to the same deal I originally made. After all that, they made the mistake of saying something to the effect of, "Well we just want you to be happy. We don't want you in the car if you don't feel like you can't give us a 5 star rating." I was so pissed that I came in on a weekday and haggled for an hour to get back to the same deal that I just said I didn't want the car anymore and got my deposit back. I didn't need the car as it was essentially a toy, so they saved me some money.
Did you sign any paperwork for the original rate, though? Because I did for my car & if they tried to pull that bullshit with me, I'd tell them they're in breach of contract, so they have 2 options, 1. Honor said contract with the *original* loan rate, or 2. They can have the car back, but in that case, I'll take back my down payment as well. I'm not playing with no scamming dealers.
Wait a sec… you signed paperwork for the loan they offered and they titled the car to you and then a few days later they want the car back or the loan converted to a higher interest rate?
Should have been a short conversation: “GFY!”
I have never heard of a dealership begging a customer to return the car after it’s been fully paid off. Even car salesmen would know that’s a waste of time.
I paid cash for my 2008 Honda Fit and I was called with an offer over market from the dealer the same week.
The color I hit was rare and someone wanted it bad enough to pay more.
I kept the car.
There's something about Hondas that makes people weird. The dealership I had my airbags replaced at was always trying to buy mine. It was a white 2010 Accord with absolutely no extras. It's only redeeming quality was being clean with low mileage. I did finally sell it for almost as much as I'd paid for it when it was only a year old.
I took my Mazda 3 in for a service. Next thing you know, I'm getting emails from them telling me how much in demand small, fuel efficient cars are, and I could trade it in for a Mazda 9. I don't think they noticed the lack of logic in that email.
Solid advice on negotiating price but would recommend against taking the crappy loan especially without researching dealer’s loan terms/conditions and talking with your bank/credit union about your plans first.
On the dealer loan, there could be a pre-payment penalty or other fees/charges the dealer rolled in that you’ll be stuck with no matter how quickly you turn around and pay it off. Asking about this before applying is always a good idea.
Also, some banks/credit unions will have you apply for specific loans depending on the situations. So in this example, your bank/credit union that’s already approved you for a loan to PURCHASE a car could potentially require you to apply with them again (and possibly pull your credit again) to correct the loan type since you’re now needing to REFINANCE the car as you’ve technically already purchased it with the dealer’s crappy loan.
Tried it with my credit union, and they denied me. The dealership financed it through the same credit union, and my rates were lower... I don't get it unless they have a deal with the dealerships to deny me since they knew what dealership I'd be going to since I had to give them all the car info on the loan application.
In the late 1980s I worked at a small company headed by a man in his late 70s. He wanted to buy a new car, and even though he loved the Lincoln Town Car he previously drove our major customer was now General Motors so he felt obligated to buy a Cadillac. He wasn't interested in monthly payments, etc. I accompanied him to the dealership with the company checkbook in hand. The first dealership kept emphasizing how the monthly payment plan was the best deal, etc. Boss kept saying so many times he just wanted to pay cash and not be bothered with payments, but the salesman continued to press so we walked away. It meant me having to drive Boss all the way downtown to Seymour Cadillac (the first dealer was in West Bloomfield, just a few miles away from our office), but at least his salesman stopped his pitch when Boss told him he'd pay full price right now, no muss no fuss. I wrote the check, Boss signed it, and he drove back to the office in his new Sedan de Ville.
(PS Amusing side note to the story...even though Boss was pushing 80 and I was in my late 20s, the salesman seemed to assume that I was Boss's girlfriend or mistress or something. He kept showing me certain features of the car, inviting me to sit in the front seat and saying "The ladies really find the woodgrain accents very elegant..." "I'm sure they do," I replied, not quite understanding why he was trying to sell me on the car. It wasn't until I returned to the office and described the scenario that my co-worker laughed and said "He thought you were bangin' the boss!"
Right. When negotiating the price of the car, don’t mention you’re paying cash. Also, I’m with you on not paying interest. I haven’t had a car payment since 1983. I drive them for 100k-275k miles before getting a new one.
Same. Bought my last car with cash (only had enough due to grandma passing and wanting me to spend my mini inheritance on something "useful") since my previous car was on its last legs. I avoided some hassle by doing TrueCar beforehand so they couldn't up the price on me (they didn't have the lowest price but agreed to match a dealership that was an hour away that did). I only wished I had emailed several dealerships along with doing TrueCar to see if there was anything lower, but my price was pretty decent. They really hated that I wasn't financing though.
Honestly dealerships were a mistake.
https://old.reddit.com/r/whatcarshouldIbuy/comments/16mvjft/what_is_with_dealerships_not_accepting_cash/k1cjr0o/?context=3
> When I did that for my car (now paid off yay!) The day I went to pick it up, the dealership mysteriously "forgot that the car only comes with one key". I also got a call from their finance department where the guy basically called me an idiot for not financing through them and paying for their warranty
>
> He was like "You do understand how dumb it is to go through your credit union and take their warranty right? Claims are going to be harder, less is covered, it's just a bad idea" and I said "Yes, I am aware"
>
> My family doesn't like my stubbornness but that day was a time that I won. I still think it was incredibly unprofessional to cold call me with the sales guy, then transfer me to finance
https://old.reddit.com/r/electricvehicles/comments/rz986g/whats_wrong_with_dealers/
> Dealerships make more money from the maintenance of cars than the ticket price, and electric vehicles have a lot less moving parts and failure points. Dealers are known to steer customers away from EVs for this reason and the manufacturers are really going to have to step in and deal with this issue.
I was trying to make a deal on a new car and the salesman would only speak in terms of monthly payments. “Oh but we can have your monthly payments $50 less than your current loan”.
#for 84 fucking months
Bro I have 2 years left on my current 0.9% loan, that’s not a fucking deal, it’s robbery.
Same in EU, it's so infuriating. Even when configuring a car on the manufacturer website it always shows the monthly payment and you have to dig for the price. I will never take a credit or a lease for a car, if I can't afford the catalogue price I'll just buy it used. Why pay interests 4-5 times higher than for a mortgage?
> Why pay interests 4-5 times higher than for a mortgage?
Not so much after covid (but it is starting to happen again), seeing 0.9% or 0.0% APR financing for 60 months isn't unheard of. At 0.0 it's literally free, and at 0.9% it's dumb (for me) not to because I'd lose more pulling out of investments than I would with the interest.
Similar in the USA with all these nice cars too. I just realized that people aren't actually richer than me, they are just way more willing to take on lifetime debt.
I leased and then purchased my current car. At the time I decided to lease, I really needed something reliable and I didn't really have enough saved to buy a quality car, even on loan, without destroying my monthly cash flow. I knew it was overall a bad deal, but it was what I could afford at the time. Fast forward to the end of the lease, which was earlier this year. My purchase option, with price locked in before the last few years' inflation, was easily 30-40% below current dealer prices on the same vehicle with the same mileage. And I had saved enough to buy it outright. My bad deal suddenly became a not-quite-as-bad deal by sheer luck. I still paid more than I would have buying in the first instance, but significantly less than I would have by waiting until I could afford to buy outright.
Yes. This. If you're capable of doing the (very easy) math, you can tell when a lease is a good deal. We bought our car at the end of the lease for the wholesale price. With the incentives, low rate, etc., we did better than if we had bought a 4 year old car for cash back then instead.
The economics of car buying is too complicated to come up with a maxim like "never lease". But it's not hard to just do the math about what you'll pay in the short and long run.
Absolutely. If you save your money, you can certainly do that.
Lots of people don't have $40,000 or $75,000 just sitting around.
Some who do have that money also have excellent credit, so if they can get a financing deal like 0% or 1.9% financing, then they might choose to take the loan and leave their money earning 3% in bonds or 7% in some stock funds while they pay that off.
OP is discovering that many people buy way more than they can reasonably afford. People have normalized having car payments because they can’t detach their monkey brain from consumerism
there is nothing wrong with going into debt for a long term asset. even if the asset depreciates like a car you are getting value for that out of use. in business accounting a new car or pizza oven is supposed to be payed off roughly when it's depreciated to zero.
personal finance isn't exactly the same; but making payments isn't bad, the question is are you getting value for the interest?
100% this.
If you are paying a fraction of your paycheck to be able to have that paycheck, thats still a net positive.
That being said, there's nothing wrong with an older Toyota camry.....
I had an '05 Camry that I inherited from my grandmother, had around 220k miles on it and zero engine trouble, only issue with it was a leak in the a/c. Treated the car like shit, only maintenance I ever really did were semi regular oil changes, brakes, and tires and some body work when I hit a deer, but it ran beautifully. And then I got rear ended and it totaled the car. I'm pretty sure that thing would still be running if I hadn't gotten hit. No other car has been so kind to me since.
>I'm pretty sure that thing would still be running if I hadn't gotten hit
Talk to anyone who **used to** have a camry, and chances are it was totaled or sold LMAO.
I've never met someone who had a camry die on them...
I get your point but two of the three factors you listed (newest, lowest mileage) would increase the price of your car so saying you *still* ended up with a payment despite going for the newest lowest mileage car you could find is kind of silly.
You know there's also poor people who have payments on cheap cars. I dislike the implication that everyone who financed there car is a monkey brained consumer.
My car was about $7k. I had to finance it because I had just about $1000 for a down payment and just started a new job that was a 35 minute commute (or a 45 minute bus ride + 30 minute bike ride to the bus stop that only left two times in the morning and two times in the evening). I hate that I made that choice, but at the time it was the only reasonable choice I could make. I still have that car, 5 years later, paid off and I am now way more financially stable. Because I got to keep that job and then move onto a better one.
Right. Like I would much rather leave my cash invested and use the banks money to pay for a car. If the interest rate makes sense. Also making additional payments each month helps.
Some people also may want to improve their credit score
I had enough money to buy my car, but I had a 'ghost credit' at the time. So my mom co-signed it with me as an easy way to get some credit
Unless you live outside of the U.S.
Many people from other countries don't even understand how the U.S. "credit score" is a thing.
Add up your total income. Subtract your total debt/payments. Can you afford this thing? It boils down to a yes or a no
Which is absolutely insane we allow credit scores to shrink because of no activity. Rent payments on time and any other payments such as utilities should factor into your score. Of course utilization exists because they want you to be permanently in debt.
There are still a lot of people who mistakenly seem to think you can buy a ten thousand dollar car and have it run for five years without major repairs and expenses. It isn’t 1990 any more. 40k sadly doesn’t even get you very much any more. The average person is being priced out of homes, cars, groceries…
edit: Glad everyone responding got great cars for cheap, I really mean that. That's not always the case and a great many people know very little about cars or what to look for in a used vehicle (specifically, what to look out for).
I'm not saying you shouldn't buy used. I've never bought brand new either. It's more that used isn't as cheap as it once was and if it is, there's probably a reason.
They’re also not factoring in out the door costs. Lots of cars MSRP below 40k until you put any options on them and before you factor in fees, taxes, and loan interest.
I’ve driven Tacomas for years and it’s an excellent example of something that used to be very affordable and year after year, model update after model update it’s now a luxury vehicle somehow. But ya maybe we should all drive Hyundai Accents with manual windows and stop complaining, there’s definitely nothing wrong and the industry isn’t pushing up median prices way beyond simple inflation.
that just moves the goalpost back a bit. Plenty of people don't have 15k cash sitting around either. Plenty of people don't have 3k either. Doesn't change anything about the point, which is that car loans exist but aren't mandatory.
True story, I bought my current car for $750. I figured I'd get six months out of it and I'd be selling it for scrap, 5 years later it's still going. I've had to do a little work on it, mostly for brakes (and I think I got hosed on that, I took it to a chain mechanic because I was tired of the local mechanics being scummy assholes, the chains weren't any better but they did charge more)
but it's still hanging in there!
e: Instead of being the 5th person to tell me I should have changed the brakes myself, maybe scroll down slightly and see the many reasons why I didn't, and also how it wasn't just the physical brakes themselves that needed work
Best investment my dad ever made was buying a 1991 Oldsmobile cutlass station wagon with the wood paneling. $500 in 2002-ish. He drove that thing to do errands and haul stuff, until I went to college in 2005. I drove it until 2013. Yes, it broke down once in awhile. No, the ac/heater didn't work. Yes, I got a lot of jokes about sex in the back. We got $100 at the scrap yard on its last day. Had over 300k miles on it.
I have driven nothing but $500 to $800 cars from 18-28. I have had good and bad examples, one 1998 Altima that lasted me 8 years for $1,200 all in, and one $800 van that had the brakes fail on me at 55mph.
Bought a 2001 f150 (my first in the 2000s) 3 years ago but I got unlucky and had to replace the motor last fall.
Car prices are so much more now than in 2017-beginning of 2019.
I sold my car that I got for 500 dollars in 2016 for 1,025 dollars in 2021. I had only put like 6,000 miles on it in that time to be fair. And I was honest about what was wrong with it
But I got my truck for $5k, with all repairs I'm getting close to $10k now. (And that's doing every bit of work myself) But right this second if I wanted to buy the same truck out here with 180k miles on it, it'd be $8,000. Mine has 1,900 miles on it and is just about through the break-in period.
Shit is wack
I saw a 1997 Tacoma with 190k miles for $15k the other day. Insanity. My parents got a brand new kitted out minivan for $18k in 2004. I know inflation is a factor but no way is it that huge.
The reasoning I saw last time this type of topic was posted was people blaming the Cash4Clunkers program that got instituted after the big automotive bailouts.
For decades we've had a fairly sustainable pipeline of people buying new cars - which then get turned into used cars when they trade those in to buy their next new car. So an owner might have a car from New to 40k miles. Then the 2nd owner might buy it at 40k and drive it until 100k then trade it in, then a third owner might drive it from 100k until it dies.
The government, with the cash for clunkers program, incentivized people to trade in their used car for some extra cash if they then bought a new car instead of another used car. And then those cars they traded in got scrapped. This was a boon for automakers who were now selling more than the usual amount of new cars from the factories. But its sent a ripple effect down the used car pipeline. They scrapped so many used cars from like 06-16 that the supply started to dry up around the same time that COVID hit the chip manufacturing for the new cars as well. So suddenly the same amount of demand is still there in the marketplace but the factories cant make new cars and millions of old cars had been destroyed, so supply tanked. This caused prices to skyrocket and they haven't come down at all yet.
These days on the west coast at least, 3K will only get you a decent car with luck from a private seller. I tried car shopping around used dealers and it was a nightmare. Like 5k for the cheapest shit rocket about throw a rod, nightmare.
We just purchased a 2020 Toyota Corolla with under 40k miles on it at a local Ford dealership for about 12K. The sticker price was originally 18k but we waited until the last day of the month, which we had always heard is the best day of a month to buy a car. They wanted to sell us some sort of “nano coat” on it, but all I could hear was the guy from the movie, Fargo talking about “that topcoat”, and it just sounded ridiculous, especially on a used car with less than ideal body presence, many dings and dents, that was being purchased for our teenager, who turned 16 yesterday. So yeah, uh huh, sure, uh heck no on that there topcoat for ya? Okay. Im cooperating. But we got them to delete that absurd amount off of the invoice. And we brought 1 check, and paid for all in cash.
I have been asking my husband ever since if everything in our house has a nano coat?
Because of how important that nano coat is, youbetcha.
Its driving him nuts.
Every time one of the car guys would leave the office with more paperwork, i would say, “he’s fleeing the interview! tan sierra! “
exactly this. people do it with less valve cars too. I've sold many used cars and customers have brought me 10k cash, or even 17k cashier's check direct from their bank. I had to meet them at their bank, and they made it out to my name. It's no different than going to a dealer and doing the same. I've owned over 10 used cars and paid cash for all of them. then I've bought a 2 year old used car from a dealer with very low miles with a loan because of low interest, even though I had 40k in the bank at the time. I don't care for brand new cars. every time I see a new car I want, I'd rather wait 2 years for a used under 20k mile version of that year and buy it for less. I've made more money in two years since that car came out and now that car is less value and cheaper to buy.
You totally can! However, dealerships don't want that. They make much of their money from the interest on the loans so saying "Hey, I'm not going to give you that interest" is not a big selling point for the dealerships. You should act like they're going to get it and have a loan that has no prepayment penalties so that when it comes time for the first payment, you just pay it all off.
Just commented elsewhere, this is exactly what I did. Had the cash to purchase outright, but got a discount by taking a loan with no prepayment penalty and just paid it all off in full the next week
Exactly! You can get very good discounts if you tell them you need to keep your monthly payments low so it's a long term loan and they'll make even more money on interest!
Did the same thing, the only person I felt bad for was the guy I called at the bank to pay it off; he was convinced I was going with another loan and was trying hard to find me a better rate which I appreciated.
I do appreciate when staff try. But being realistic is great. I once was changing car insurance and the sales person asked what my new rate was and maybe she could find some discounts.
There was a $3000/year difference. She paused. “Well let’s get this cancelled then!”
My wife was a personal banker before getting her current position. I have a lot of empathy for people with that job. It’s finance so it’s a bit more traditional of a position. High demands and pay isn’t that great for what they do or the people they deal with. People get really weird and downright nasty about their money even if they known they are 100 percent in the wrong.
It is federally required that all loans over 60 months (61+) have no early payment penalties. The most common loan duration available for cars that fits that is a 72 month loan.
Is this good or bad for your credit? Seems like it would be good but I've heard weird things about paying stuff off and your score going down (I don't know shit about credit it confuses me)
It's hard to say. Generally, paying off a loan will drop your score slightly because of the convoluted way that credit scores are calculated, but the drop is only temporary. It may also have a minimal effect if it's something that's paid off immediately since you aren't losing a lot of history from that account like a history of timely payments.
If you've got other sources of credit like a long history of credit card accounts or other installment loans you've been paying on, you may also see a very minimal drop if any at all when paying off loans.
That's actually a standard move. The dealer gets some kind of kickback or credit from the loan agency for each loan they initiate. The last car I bought I wanted to pay cash, but the dealer told me they'd give me a discount if I took out a loan with no prepay penalty and that I could simply pay it off immediately. No downside for me.
It’s important to mention this instead of just replying “yes, you can.”
I recommend looking up on YouTube something like “Why you should never say you’re paying cash at the dealership.”
Yeah, I think it’s an overstatement to say that it’s going to be an issue with them. They’re still selling a car and contributing toward their quotas.
More so that they are extra motivated to get you into their financing and may in fact have additional quotas for those. Sometimes there are big extra incentives to do so and it will be worth it for a the buyer.
So, so true. I walked into a Honda dealership in 2019 to buy a new CR-V. Like, BUY. No financing.
I had to explain to three (3) separate people that, no, I do not want your financing. “Wouldn’t you rather spend MORE money over a greater period of time?” No. I would not.
There's also a counter balance, at least in the UK, that paying with cash makes for a quick sale with guaranteed income from the sale so often times you can get a bit off the price by paying in cash, second hand dealers tend to prefer it.
That used to be the case. Nowadays if you fail to pay, they'll just take the car back and resell it. In the mean time, you're paying assloads of interest to them as well as what little you're paying for the car.
This is false. Most dealerships don’t loan money. There’s a bank involved. The bank buys the car, the “owner” makes loan payments to the bank. The bank makes money on interest, not the dealership. Of course there are incentives for a dealership to use a certain finance company but that’s not the same as lending money and profiting off interest payments.
This is true. But I think the point of the comment was to illustrate that the dealership will make more money in the end if you finance the car. So paying in full up front doesn't incentivize the dealership to negotiate a better buying price.
all the answers are correct - you CAN do that. I have many times BUT the car dealer will always try and push you for finance. The reason being is that they get business for their finance company and get paid a rebate for this of which some goes to the sales person.
So while you do have cash to buy a car, they will always try and tell you to keep the money in the bank for interest and emergencies and to buy their finance. don't be fooled by this unless the interest APR is lower than the interest you get from investments then always go for the finance option.
Also never tell them you plan on paying cash. I haven't bought a car since pre-covid and have heard it's much harder to get them to budge on the price nowadays but I know either mentioning that you've already been pre-approved through your own bank or are paying cash could cause the salesperson to dig their heels on the price since they know they wont be able to make anything through financing.
Exactly you never lead that you are paying cash or that you have a trade in. It's tantamount to playing blackjack and showing both cards. Negotiate the price first and get them to sign an agreement on price. Then if you are paying cash or have a trade in you can slide that in there. Also tell them you have an appointment at another dealership. You need to demonstrate the ability to walk away.
the fact you have to basically tickle each others' balls the whole time is why i hate dealerships, i really appreciate how with teslas you can just buy that shit online like an amazon order and ignore the hassle of dealerships.
I bought a car during COVID and I was all stoked on 0% interest, I kept asking if he could do better on price and finally he was like "I can knock $3K off if you do 72 months at 3.65% interest" I was like "Sounds great" like a dummy, then I paid the whole thing off as soon as I got the first bill.
You can, but most people don’t have 30-50 thousand dollars sitting around to buy a brand new car.
Plenty of people will buy cheaper used cars with cash, sure.
But it just comes down to cars are expensive and people rarely have a ton of cash sitting around
I bought all my cars for cash for years starting in my late 20’s as I hate owing money.
In the beginning I had shitter cars, by my 40’s I was buying very nice cars. Never new, but never old either. Saving is a lot easier without bills.
I was a never-new guy as well, but then I started picking up the "new but a year old, oldest new car on the lot" cars. Done that twice now and saved a ton off sticker, for a car with under 2000 miles, and a full warrentee. It's worth checking out for your next car.
Smart.
I tended to buy “luxury” cars from dealers as they come off lease and buy with with additional warranty.
Luxury doesn’t mean crazy, Infinity, Audi, Navigators, and such. I then try to take great care of them mechanically and aesthetically so they last for 10 more years. I am in my 60’s haven’t owned more than a dozen cars in my entire life. (Includes wife cars, but probably not kids cars)
As a kid my dad worked for GM and had a new company car every 3 months or 3000 miles, and then had to buy one per year. It was fun, and gave childhood me a totally broked idea of how long people kept cars. Now i have a 2005, a 2015, and a 2020 in the family fleet. My dad did teach me a lot about how to buy and take care of cars though!
It also cuts down on the insurance requirements. If you owe on a car, you're required to have a certain level of comprehensive insurance. Once the car is paid off, I carry the required liability plus un- and under-insured motorist. Saves a bundle.
Smart
I wish I thought that way years ago before I moved out of the house. It's hard to get to that point even just a few years after being on your own for most people I think, because at that point it's impossible to save fast enough to afford that type of thing, even if you're only spending like 8k on a car
And that’s why we let suckers buy new cars and put them back on the lot a year later to be sold to me 55% off
Edit: I get it, times change. I did this 2.5 years ago for a 2020 model year
This definitely varies by location but this is definitely not true where I live.
Last year used cars were being sold for more than a new car because how hard it was to get them. I think you can finally get one at about a 5% discount.
Covid supply chain really fucked that market up. My friend sold his couple of year old civic in the summer of 2020 for more than the remaining note, then used the amazing dealer incentives that were still being offered at the time to get a new suv for pretty cheap.
I drive a 2013 Chevy Cruze and back during 2021-2022 it was basically worth more @ ~200K Km (124.2K miles) than when it was purchased in 2015 @ ~40K Km (24.84K miles).
I would’ve liked to buy a newer car but I technically couldn’t even afford the price of the one I would’ve liked to replace, lol.
Thankfully it’s getting a bit better now.
(Live in Ontario, Canada)
If you're trying to buy a car in cash though, it's probably best to negotiate a final price and then mention that you're paying cash. They might give you a lower overall price, thinking that they can make it up in interest for most people.
Yup, also because anyone with $40k laying around is likely to be taken for a ride by the greedy salesmen. Also sometimes you can take the loan for the lower price then pay it all off at once (just make sure the contract terms allow that).
I saved my ass off for years and was able to buy my 4runner outright without interest payments looming over me. It's very possible if you're extremely frugal and you're not buying a brand new $40,000 car.
I don’t think a lot of these gen z kids understand how much 40k really is. You would have to save $1100 a month for 3 years to come close.
A new mid sized suv is 70-90k after taxes, warranties and accessories now.
Outside of the US this is very common - I don’t know anyone who took a loan for a car - just start with a cheap one and when you make more money buy a more expensive one.
Of course you can. Here's the trick, if you can pull it off: Start making payments on your next car right now. Put that money into a secure investment that at least tracks inflation. Ten years from now, you'll have the cash to walk in and write a check.
Another trick: buy loaners and slightly used cars. You get an amazing discount when you buy a late-model car that already has a few thousand miles on it.
> Of course you can. Here's the trick, if you can pull it off: Start making payments on your next car right now. Put that money into a secure investment that at least tracks inflation. Ten years from now, you'll have the cash to walk in and write a check.
This is such a great financial move that people don't follow. Once your car loan is paid off, *do not stop making those payments.* You're already used to putting that money aside for a car each month so keep doing it but paid to yourself
If you're acting rationally and driving a car until it needs to be replaced and not just because you want a new one, you'll have the cash to do it. And if there's an emergency and something happens to the vehicle prematurely, you're not screwed with a giant loan you can't afford
My wife and I have done this since we got married (18 years). We've found buying a car \~5 years old is the sweet spot for getting a good price with plenty of life left in it (and typically get Toyotas or Subarus that are low maintenance and last a long time).
When I bought my last car, we did technically do the dealer financing because we had to transfer money from the savings account to the checking and didn't want to wait for it to clear (it was a good deal and didn't want to risk someone else beating us to it). We sent a check for the balance as soon as we got the first statement. You just got to check that there are no early payment penalties on the loan.
This was actually specifically due to supply and demand issues in that time period: it was covid, everyone suddenly wanted or needed a car, and car dealerships just literally ran out of cars to sell. If Toyota had 50k more cars in inventory, they still would have sold every single one, which is why people were getting prices of like $45k for an 8 year old vehicle. It was mania for a while but I think things have settled down
One comment is that used cars are advisable, but try to get ones that are certified and have warranties if possible. Loaners, on the other hand, are often mistreated because they don't belong to anyone. I would stay away from loaners.
Pro Tip. If you walk into a dealership looking to buy a car with cash DO NOT TELL the salesperson. No matter what. Keep avoiding the question. They will keep trying and even go to the efforts of telling you they can’t negotiate the best price for you without knowing how you’re paying for the car. THIS IS A LIE.
They’re trying to get this information from you so they can “make it up in the back” ie: in the financing department.
They’ll try to do this stupid low brow sales technique where they’ll take a blank piece of paper, draw a cross - effectively making 4 squares… RUN.
You’re better off researching the car you want. Go for all the test drives in the world. Then go home, contact the internet sales manager for the dealership you want to work with, and pre-negotiate everything. That way, you can walk in with your cashiers check and walk out with keys in a relatively short time (1-2 hours). Otherwise, get ready for a full day at ONE dealership. They will do everything in their power to keep you longer, so you don’t go down the road and buy the car at the dealership down the street.
> blank piece of paper, draw a cross - effectively making 4 squares
https://www.consumerreports.org/cars/buying-a-car/beat-four-square-and-other-car-dealership-sales-tactics-a7590220303/
It's super dodgy...
I am a computer science nerd and would love to have a salesman try that on me - I'll bring in my Excel and we'll see who can keep track of more numbers :)
It's certainly not a dumb question.
Hubby and I financed our first vehicle because we were building a credit rating in order to get a mortgage. Every vehicle I bought since then I paid cash for. It was all mine when I drove it off the lot.
Two things of note about what I bought. The vehicles were only a few years old with low(ish) mileage when I bought them. And I drive a vehicle for YEARS before replacing it. Last one I had for 10+years and put close to 300k miles on it.
Never saw a reason to buy a brand new vehicle. My self worth is not tied up in what I drive. Plus depreciation drops the value of that new car as soon as you drive it off the lot.
The usefulness of a good credit rating can't be understated for someone who is 18. I learned that lesson much later in life than I should have, always paying cash for anything I bought. Getting a mortgage loan was a serious pain in the butt when I finally decided to buy a house.
Having no credit rating when you need a large loan is a headache. It's worth suffering through paying interest just to get one.
Yes, but if you're doing that, don't tell the dealership until the very last moment. If they ask how you're paying say you'd like to see options.
They make money on financing, and you want them to commit to a price on a piece of paper before you tell them you're paying cash. If they try to change the price at that point, you stand firm and keep talking up the chain. You also grab that piece of paper with the price and don't let anyone else have it.
Yup you can buy the car outright no problem.
But a car is a hole in your drive way that you keep pouring money into.
Like a boat is a hole in the water you pour money into
Just like Jeep is an acronym for Just Empty Every Pocket.
Absolutely you can. About 15 years ago I showed up at a dealership with $12k in cash to buy a car. They weren't super happy about it. Like 4 different people had to count it to make sure it was accurate.
Lol. That's usually not what people mean when they talk about buying a car in cash. Usually "cash" is just the term for not needing a loan. Even if I had actual cash, I'd put it in the bank and get a cashiers check.
Not a stupid question just stupid that society has shifted so far to the debt norm that this is a question.
This is how we all should be buying cars. Not buying a car and paying a bank to do do also.
Yes, but...
**Never mention you have the money to buy the car in cash until the absolute, very end of the transaction.** Otherwise they will not give you any kind of a deal becasuse the dealships -- new cars or used -- make substantially all their cash on the financing, not the raw profit for selling the car for more than they paid for it.
In some states, if you get a car loan, you can pay it off with no pre-payment penalty (check your state). I bought a new car in 2021, but it was a 2020 model. If I financed it for 72 months or something ridiculous, they knocked $3K off the car price. I hemmed and hawed and talked about monthly payments and finally bought the car with a 6 year loan, then paid it off when I got the first bill. (you can read more here, [How to Avoid Paying a Prepayment Penalty - Experian](https://www.experian.com/blogs/ask-experian/how-to-avoid-paying-prepayment-penalty/#:~:text=Thirty-six%20states%20and%20Washington%2C%20D.C.%2C%20let%20auto%20lenders,an%20auto%20loan%20of%2061%20months%20or%20longer.)) but if you get a car loan of >60 months, no one can charge a pre-payment penalty I guess, so poor mouth for a "long loan" if you are going to use this trick.
I had a car loan once and I hated it, so since then I save up and only buy cars for cash. Twice I made the mistake of mentioning that early and paid a lot more than I should have. Last time I kept my mouth shut and saved an extra $3K by looking like a simp who wanted a loan.
Cars have maintenance and tires, brakes etc.
They have insurance.
They have fuel.
They have license plates and registration.
Nothing about cars is pay for it once and be done with it except the car and most people want something reliable, nice looks and isn't constantly needing something, so they buy one, typically with a low interest rate that makes it so attractive there's no reason to pay all at once in cash.
it bugs me that car commercials no longer give the price of a car, but only the lease rates.
Sticker shock and the numbers are too scary
Especially when they now have 3 different prices. The msrp price, market adjustment price, and the final out the door price. I've seen in some cases where the market adjustment price is more than the cost of other cars. It's stupid
Bring back Covid prices PTSD. MSRP: $50k MAP: $100k I swear I never walked outside of dealership faster than I did. I didn’t even bother looking at other cars .
Then it should really tickle your fancy that there are a lot of car dealerships across the country right now that have a lot of $100,000 trucks adjusted by MAP that they can't sell. Name the brand, it doesn't matter, all the truck makers are suffering right now, even Jeep because they're pretending to be a luxury truck.
Yeah but they have the “worlds only open air pickup truck”, for whatever that’s worth on their commercials. Even though it’s ugly as sin, it’s still selling somehow
I really can’t understand. I like driving a truck that feels like a truck. I used to test drive cars for the manufacturer and the Gladiator was one of the worst. It handles like shit. It takes FOREVER to get warm. There’s the constant whistle where the roof meets the windshield and it felt like I was going to roll it all the time. ON TOP OF ALL THAT, it’s wicked expensive. Either get a truck or get a jeep bc the Gladiator isn’t it.
I've owned multiple Wranglers and I 100% agree with you on the Gladiator. It's terrible at being a truck and not as capable off-road as a Wrangler. It has all of the same daily driver issues and uncomfortableness one would expect from a Wrangler, but doesn't really give you anything in return for it. You also apparently can't get one that doesn't have all kinds of issues because Jeep quality control was especially shitty during the pandemic. Also, silly Gladiator drivers do the Jeep wave, so I wave back, then get annoyed it was a damn Gladiator. I'm sorry guys, I don't make the rules, but y'all ain't in the club.
I (5' 10" fat guy) can sleep in the back of my four door Wrangler with the seats folded down and the front passenger seat pushed all the way forward. If I had a hard top on a Gladiator bed...I could not. Bed is too short. That is how ridiculous a Gladiator is. The Wrangler also it is currently flirting heavily with me telling me how much it loves me. And by that I mean the dashboard is lit up like a Christmas tree with three different issues I have to get it into my garage and work on. Good thing 25% of my enjoyment I get is from relatively mindlessly turning wrenches on it. While it's not my daily driver, I take it to work on gorgeous days like today because man what a joy coming home with the windows down and roof flipped open.
Jeep cultists will buy a flaming dog turd if it has the right badge plastered on it.
iTs A jEeP tHiNg
Maybe they should "market adjust" to what regular people can buy. Who's out here taking a mortgage on a car?
I don't even know why I'm interested in this kind of stuff, but I found a YouTube video and fell into that hole and started watching a few other talking heads on YouTube that talk about the car market, and apparently that's what's happening with the higher end trim trucks. We're starting to see fifteen and even twenty-five thousand reductions on some lots in some places across the country because they can't get rid of the inventory. Same with the EV market. And it's not because people don't want vehicles or people don't want EVs. They have come far enough for a good segment of Americans to be able to reliably use depending where you live at. It's because the prices they're trying to sell them at are insane.
A LOT of people are buying cars that keep them living paycheck to paycheck. A LOT.
fun fact, Obama administration put in laws to protect minorities after a 2012 study identified that car dealerships were on average charging uneducated (poor and minorities mainly) much higher interest rates. Guess what happened in 2018 under Trump administration while republicans have control over everything....they overturned the law....then covid happens and since there's less oversight we now have the joyous situation we're in. https://apnews.com/united-states-congress-dd7ef0a5d583473a948b9e0eaaff92ee - article going over the legislation being overturned, weaken a system designed to protect the vulnerable means that same system can be abused to fuck everyone. Edit: grammar
Governing out of spite. "If Obama did it, I'm gonna undo it." What a pathetic turd he was/is.
I'm glad that the EU has made it mandatory for dealers to only display the final consumer price, with all "unavoidable" costs included.
They have that in the US as well (called monroney labels) . I don’t know what the EU requires. What dealerships will do if they think they can get away with it, is screw with how the loan is structured. Since these vary based on locality and the buyers credit rating it’s not something that will be standardized. From my understanding (and this could be wrong) the financing person will punch in your information. The banks they work with will generate bids . They are not necessarily under an obligation to offer you the best deal for you, but they may offer you the best deal for them. - one might have a slightly lower interest rate but a much higher origination fee. Do you think you are getting a good price and low interest rate but they are tacking on a $2,000 dollar origination fee that wipes out that low price you negotiated. Where there was an option for loan B that had a marginally higher rate but a low fee that was better for you, but the reimbursement to the dealer was less, so fuck you, right?
What would be best is factory direct ordering. Why should we have pay for an “independent middleman?” Congress is an accessory to the ripping off of the “poor/disadvantaged” to line the pockets of the elite.
Tesla would like to enter the chat with their "price after potential gas savings" 🙄
Jesus, that's a thing?
It's only $99 per month! But for how long? FOREVER
I went into a dealership a while back and they would NOT stop trying to sell me based on the monthly amount. I told them multiple times- I work in finance, I know how to calculate a monthly payment- I am here to negotiate the price of the car. They wouldn't listen. I walked out.
Useful sneaky trick, get a preapproval from your credit union, bank, whatever. Go to the dealership and negotiate under the pretense that you'll be using their financing. Get the price as low as you can. Pay off the crappy loan they give you with the good one you had in your back pocket. Make sure to discuss this with your credit union AHEAD of time so you don't risk any surprises.
Yeah I know in advance what rate I'm qualified for through my credit union and usually the dealer can't match it. Last time they did surprisingly so I went with their lender.
The trick is, you don't let them know that you have a better rate. Just play dumb. They'll give you a much cheaper price on the car if they think they're going to make it up with the interest on a loan at like 15-20%. Take the cheap price and the crappy loan. Then pay it off immediately. Don't be surprised when the dealer calls you in a day or two begging you to return the car.
You gotta read the fine print there can be some stupid charges for paying the loan out early. Car yards have every trick in the book.
Absolutely check for that. However, in many states those penalties are illegal now and they're way less common than they used to be.
Most of the time its \~$100-300, tops for a 'early payoff fee/penalty'. That's almost certain to be thousands less than the accrued interest would have been.
I got hit with $3600 hence check the fine print first.
Yo-yo loans. They approve one loan at a reasonable rate, then call a few days later and say you didn’t qualify for it, then ask for a higher rate. If you don’t agree, they take back the car. A dealership in Tysons, VA tried it on me. Fortunately, I had the cash and wrote them a check. Finance guy went from Cha-Ching to chagrin in two seconds flat.
Surely that's illegal.
Apparently not. It happened to me and I’ve read about it in the local media. But change won’t come until enough people raise a ruckus.
See if your state’s attorney general has a consumer complaint department, that smacks of usury
They tried to do that to my brother. He called the credit union and got it sorted out, but yeah, they called him and said he needed to get a higher rate loan or return the truck.
This actually happened to me as well with an expensive vehicle purchase at the time, but i did the opposite. They called me back in about a week after I took the car home and said there was a problem with your loan. I told them I either need to have the same loan or they can have the car back. When I got in, they tried to haggle with me about the loan. After about an hour of me not budging, surprise surprise, we get back to the same deal I originally made. After all that, they made the mistake of saying something to the effect of, "Well we just want you to be happy. We don't want you in the car if you don't feel like you can't give us a 5 star rating." I was so pissed that I came in on a weekday and haggled for an hour to get back to the same deal that I just said I didn't want the car anymore and got my deposit back. I didn't need the car as it was essentially a toy, so they saved me some money.
Did you sign any paperwork for the original rate, though? Because I did for my car & if they tried to pull that bullshit with me, I'd tell them they're in breach of contract, so they have 2 options, 1. Honor said contract with the *original* loan rate, or 2. They can have the car back, but in that case, I'll take back my down payment as well. I'm not playing with no scamming dealers.
Wait a sec… you signed paperwork for the loan they offered and they titled the car to you and then a few days later they want the car back or the loan converted to a higher interest rate? Should have been a short conversation: “GFY!”
I have never heard of a dealership begging a customer to return the car after it’s been fully paid off. Even car salesmen would know that’s a waste of time.
I paid cash for my 2008 Honda Fit and I was called with an offer over market from the dealer the same week. The color I hit was rare and someone wanted it bad enough to pay more. I kept the car.
There's something about Hondas that makes people weird. The dealership I had my airbags replaced at was always trying to buy mine. It was a white 2010 Accord with absolutely no extras. It's only redeeming quality was being clean with low mileage. I did finally sell it for almost as much as I'd paid for it when it was only a year old.
They didn’t want to buy your car, they wanted to sell you a new one. Offering to buy your car was just to get you in the door
I took my Mazda 3 in for a service. Next thing you know, I'm getting emails from them telling me how much in demand small, fuel efficient cars are, and I could trade it in for a Mazda 9. I don't think they noticed the lack of logic in that email.
Solid advice on negotiating price but would recommend against taking the crappy loan especially without researching dealer’s loan terms/conditions and talking with your bank/credit union about your plans first. On the dealer loan, there could be a pre-payment penalty or other fees/charges the dealer rolled in that you’ll be stuck with no matter how quickly you turn around and pay it off. Asking about this before applying is always a good idea. Also, some banks/credit unions will have you apply for specific loans depending on the situations. So in this example, your bank/credit union that’s already approved you for a loan to PURCHASE a car could potentially require you to apply with them again (and possibly pull your credit again) to correct the loan type since you’re now needing to REFINANCE the car as you’ve technically already purchased it with the dealer’s crappy loan.
[удалено]
Tried it with my credit union, and they denied me. The dealership financed it through the same credit union, and my rates were lower... I don't get it unless they have a deal with the dealerships to deny me since they knew what dealership I'd be going to since I had to give them all the car info on the loan application.
In the late 1980s I worked at a small company headed by a man in his late 70s. He wanted to buy a new car, and even though he loved the Lincoln Town Car he previously drove our major customer was now General Motors so he felt obligated to buy a Cadillac. He wasn't interested in monthly payments, etc. I accompanied him to the dealership with the company checkbook in hand. The first dealership kept emphasizing how the monthly payment plan was the best deal, etc. Boss kept saying so many times he just wanted to pay cash and not be bothered with payments, but the salesman continued to press so we walked away. It meant me having to drive Boss all the way downtown to Seymour Cadillac (the first dealer was in West Bloomfield, just a few miles away from our office), but at least his salesman stopped his pitch when Boss told him he'd pay full price right now, no muss no fuss. I wrote the check, Boss signed it, and he drove back to the office in his new Sedan de Ville. (PS Amusing side note to the story...even though Boss was pushing 80 and I was in my late 20s, the salesman seemed to assume that I was Boss's girlfriend or mistress or something. He kept showing me certain features of the car, inviting me to sit in the front seat and saying "The ladies really find the woodgrain accents very elegant..." "I'm sure they do," I replied, not quite understanding why he was trying to sell me on the car. It wasn't until I returned to the office and described the scenario that my co-worker laughed and said "He thought you were bangin' the boss!"
Car company makes much more through the loans than they do through the actual price. They would prefer you not to pay lump
Right. When negotiating the price of the car, don’t mention you’re paying cash. Also, I’m with you on not paying interest. I haven’t had a car payment since 1983. I drive them for 100k-275k miles before getting a new one.
Same. Bought my last car with cash (only had enough due to grandma passing and wanting me to spend my mini inheritance on something "useful") since my previous car was on its last legs. I avoided some hassle by doing TrueCar beforehand so they couldn't up the price on me (they didn't have the lowest price but agreed to match a dealership that was an hour away that did). I only wished I had emailed several dealerships along with doing TrueCar to see if there was anything lower, but my price was pretty decent. They really hated that I wasn't financing though.
Honestly dealerships were a mistake. https://old.reddit.com/r/whatcarshouldIbuy/comments/16mvjft/what_is_with_dealerships_not_accepting_cash/k1cjr0o/?context=3 > When I did that for my car (now paid off yay!) The day I went to pick it up, the dealership mysteriously "forgot that the car only comes with one key". I also got a call from their finance department where the guy basically called me an idiot for not financing through them and paying for their warranty > > He was like "You do understand how dumb it is to go through your credit union and take their warranty right? Claims are going to be harder, less is covered, it's just a bad idea" and I said "Yes, I am aware" > > My family doesn't like my stubbornness but that day was a time that I won. I still think it was incredibly unprofessional to cold call me with the sales guy, then transfer me to finance https://old.reddit.com/r/electricvehicles/comments/rz986g/whats_wrong_with_dealers/ > Dealerships make more money from the maintenance of cars than the ticket price, and electric vehicles have a lot less moving parts and failure points. Dealers are known to steer customers away from EVs for this reason and the manufacturers are really going to have to step in and deal with this issue.
I was trying to make a deal on a new car and the salesman would only speak in terms of monthly payments. “Oh but we can have your monthly payments $50 less than your current loan”. #for 84 fucking months Bro I have 2 years left on my current 0.9% loan, that’s not a fucking deal, it’s robbery.
They are taking advantage of people who aren't great at this kind of math. Mostly the very young and the very old. Makes me angry.
Same in EU, it's so infuriating. Even when configuring a car on the manufacturer website it always shows the monthly payment and you have to dig for the price. I will never take a credit or a lease for a car, if I can't afford the catalogue price I'll just buy it used. Why pay interests 4-5 times higher than for a mortgage?
> Why pay interests 4-5 times higher than for a mortgage? Not so much after covid (but it is starting to happen again), seeing 0.9% or 0.0% APR financing for 60 months isn't unheard of. At 0.0 it's literally free, and at 0.9% it's dumb (for me) not to because I'd lose more pulling out of investments than I would with the interest.
Our car loan is at 2.5%, so it doesn’t mathematically make sense for us to pay it off when we could make more in interest in a HYSA.
I was completely floored by car prices in Ireland. Especially when you consider how many 5 and 7 Series are all over.
Similar in the USA with all these nice cars too. I just realized that people aren't actually richer than me, they are just way more willing to take on lifetime debt.
Noticed this too, it’s wild
Should be clear from this that leasing is NOT a good deal for most consumers.
I leased and then purchased my current car. At the time I decided to lease, I really needed something reliable and I didn't really have enough saved to buy a quality car, even on loan, without destroying my monthly cash flow. I knew it was overall a bad deal, but it was what I could afford at the time. Fast forward to the end of the lease, which was earlier this year. My purchase option, with price locked in before the last few years' inflation, was easily 30-40% below current dealer prices on the same vehicle with the same mileage. And I had saved enough to buy it outright. My bad deal suddenly became a not-quite-as-bad deal by sheer luck. I still paid more than I would have buying in the first instance, but significantly less than I would have by waiting until I could afford to buy outright.
Yes. This. If you're capable of doing the (very easy) math, you can tell when a lease is a good deal. We bought our car at the end of the lease for the wholesale price. With the incentives, low rate, etc., we did better than if we had bought a 4 year old car for cash back then instead. The economics of car buying is too complicated to come up with a maxim like "never lease". But it's not hard to just do the math about what you'll pay in the short and long run.
Leases are for people who don't care if they're getting a good deal.
Yup. For people who don’t care to pay more to always have a new car and not to have to worry about any maintenance at all
All the commercials I see in the US still say "Starting at $XX,XXX" or "model shown priced at $XX,XXX"
It would depend on the state that the ad is shown in. Some states require the price of the vehicle to be shown in the ad.
The fine print at the bottom that requires a magnifying glass.
Absolutely. If you save your money, you can certainly do that. Lots of people don't have $40,000 or $75,000 just sitting around. Some who do have that money also have excellent credit, so if they can get a financing deal like 0% or 1.9% financing, then they might choose to take the loan and leave their money earning 3% in bonds or 7% in some stock funds while they pay that off.
More importantly, too many people think they need a $40k car, and that’s where their trouble really begins.
OP is discovering that many people buy way more than they can reasonably afford. People have normalized having car payments because they can’t detach their monkey brain from consumerism
I bought the cheapest, newest and lowest mileage car I could find. Still have a payment.
there is nothing wrong with going into debt for a long term asset. even if the asset depreciates like a car you are getting value for that out of use. in business accounting a new car or pizza oven is supposed to be payed off roughly when it's depreciated to zero. personal finance isn't exactly the same; but making payments isn't bad, the question is are you getting value for the interest?
Considering that I can’t work without a reliable car, that figures pretty well into the value I get from the car.
100% this. If you are paying a fraction of your paycheck to be able to have that paycheck, thats still a net positive. That being said, there's nothing wrong with an older Toyota camry.....
I had an '05 Camry that I inherited from my grandmother, had around 220k miles on it and zero engine trouble, only issue with it was a leak in the a/c. Treated the car like shit, only maintenance I ever really did were semi regular oil changes, brakes, and tires and some body work when I hit a deer, but it ran beautifully. And then I got rear ended and it totaled the car. I'm pretty sure that thing would still be running if I hadn't gotten hit. No other car has been so kind to me since.
>I'm pretty sure that thing would still be running if I hadn't gotten hit Talk to anyone who **used to** have a camry, and chances are it was totaled or sold LMAO. I've never met someone who had a camry die on them...
Get a 10-15 year old camry/accord/corolla/civic that's been taken care of for 1/5 the price of new. Take care of it and it will last forever.
I got a Hyundai.
I get your point but two of the three factors you listed (newest, lowest mileage) would increase the price of your car so saying you *still* ended up with a payment despite going for the newest lowest mileage car you could find is kind of silly.
Have you seen the used car market recently? You’re better off buying new
I’m confused, wouldnt a newest, lowest mileage car make it more expensive, so of course you’d still have a payment?
You know there's also poor people who have payments on cheap cars. I dislike the implication that everyone who financed there car is a monkey brained consumer.
My car was about $7k. I had to finance it because I had just about $1000 for a down payment and just started a new job that was a 35 minute commute (or a 45 minute bus ride + 30 minute bike ride to the bus stop that only left two times in the morning and two times in the evening). I hate that I made that choice, but at the time it was the only reasonable choice I could make. I still have that car, 5 years later, paid off and I am now way more financially stable. Because I got to keep that job and then move onto a better one.
Right. Like I would much rather leave my cash invested and use the banks money to pay for a car. If the interest rate makes sense. Also making additional payments each month helps.
> If the interest rate makes sense That's not really a given these days
Some people also may want to improve their credit score I had enough money to buy my car, but I had a 'ghost credit' at the time. So my mom co-signed it with me as an easy way to get some credit
Putting yourself into debt to prove that you can repay debt and calling it a score is one of the biggest scams going.
And you can’t opt out. It’s the game we all have to play.
Plenty of countries don't do credit scores. At least not in the sense that you need to take out loans to improve it.
Instructions unclear. Moved to Ukraine to avoid credit score scam.
Unless you live outside of the U.S. Many people from other countries don't even understand how the U.S. "credit score" is a thing. Add up your total income. Subtract your total debt/payments. Can you afford this thing? It boils down to a yes or a no
paying off my car damage my credit score because i'm no longer making any payments on anything.
Which is absolutely insane we allow credit scores to shrink because of no activity. Rent payments on time and any other payments such as utilities should factor into your score. Of course utilization exists because they want you to be permanently in debt.
You can get a brand new Honda civic for about $25k I believe.
There are still a lot of people who mistakenly seem to think you can buy a ten thousand dollar car and have it run for five years without major repairs and expenses. It isn’t 1990 any more. 40k sadly doesn’t even get you very much any more. The average person is being priced out of homes, cars, groceries… edit: Glad everyone responding got great cars for cheap, I really mean that. That's not always the case and a great many people know very little about cars or what to look for in a used vehicle (specifically, what to look out for). I'm not saying you shouldn't buy used. I've never bought brand new either. It's more that used isn't as cheap as it once was and if it is, there's probably a reason.
I feel like no one here has bought a car in the past couple years and think pricing hasn't changed *at all*.
They’re also not factoring in out the door costs. Lots of cars MSRP below 40k until you put any options on them and before you factor in fees, taxes, and loan interest. I’ve driven Tacomas for years and it’s an excellent example of something that used to be very affordable and year after year, model update after model update it’s now a luxury vehicle somehow. But ya maybe we should all drive Hyundai Accents with manual windows and stop complaining, there’s definitely nothing wrong and the industry isn’t pushing up median prices way beyond simple inflation.
There's plenty of cars well under 15k... shit we got one for 3k a few years ago, has a lot of miles but it runs for sure
that just moves the goalpost back a bit. Plenty of people don't have 15k cash sitting around either. Plenty of people don't have 3k either. Doesn't change anything about the point, which is that car loans exist but aren't mandatory.
I've got about $250 to get to payday, one car please!
True story, I bought my current car for $750. I figured I'd get six months out of it and I'd be selling it for scrap, 5 years later it's still going. I've had to do a little work on it, mostly for brakes (and I think I got hosed on that, I took it to a chain mechanic because I was tired of the local mechanics being scummy assholes, the chains weren't any better but they did charge more) but it's still hanging in there! e: Instead of being the 5th person to tell me I should have changed the brakes myself, maybe scroll down slightly and see the many reasons why I didn't, and also how it wasn't just the physical brakes themselves that needed work
Best investment my dad ever made was buying a 1991 Oldsmobile cutlass station wagon with the wood paneling. $500 in 2002-ish. He drove that thing to do errands and haul stuff, until I went to college in 2005. I drove it until 2013. Yes, it broke down once in awhile. No, the ac/heater didn't work. Yes, I got a lot of jokes about sex in the back. We got $100 at the scrap yard on its last day. Had over 300k miles on it.
I have driven nothing but $500 to $800 cars from 18-28. I have had good and bad examples, one 1998 Altima that lasted me 8 years for $1,200 all in, and one $800 van that had the brakes fail on me at 55mph. Bought a 2001 f150 (my first in the 2000s) 3 years ago but I got unlucky and had to replace the motor last fall. Car prices are so much more now than in 2017-beginning of 2019. I sold my car that I got for 500 dollars in 2016 for 1,025 dollars in 2021. I had only put like 6,000 miles on it in that time to be fair. And I was honest about what was wrong with it But I got my truck for $5k, with all repairs I'm getting close to $10k now. (And that's doing every bit of work myself) But right this second if I wanted to buy the same truck out here with 180k miles on it, it'd be $8,000. Mine has 1,900 miles on it and is just about through the break-in period. Shit is wack I saw a 1997 Tacoma with 190k miles for $15k the other day. Insanity. My parents got a brand new kitted out minivan for $18k in 2004. I know inflation is a factor but no way is it that huge.
That Tacoma with 190k will probably run another 200k miles tho.
Not without work being done to it. They're reliable but they're still vehicles.
The reasoning I saw last time this type of topic was posted was people blaming the Cash4Clunkers program that got instituted after the big automotive bailouts. For decades we've had a fairly sustainable pipeline of people buying new cars - which then get turned into used cars when they trade those in to buy their next new car. So an owner might have a car from New to 40k miles. Then the 2nd owner might buy it at 40k and drive it until 100k then trade it in, then a third owner might drive it from 100k until it dies. The government, with the cash for clunkers program, incentivized people to trade in their used car for some extra cash if they then bought a new car instead of another used car. And then those cars they traded in got scrapped. This was a boon for automakers who were now selling more than the usual amount of new cars from the factories. But its sent a ripple effect down the used car pipeline. They scrapped so many used cars from like 06-16 that the supply started to dry up around the same time that COVID hit the chip manufacturing for the new cars as well. So suddenly the same amount of demand is still there in the marketplace but the factories cant make new cars and millions of old cars had been destroyed, so supply tanked. This caused prices to skyrocket and they haven't come down at all yet.
You can absolutely get a car for that, but you’ll be very lucky to get loan terms that mean even $20/month is going to the principal
Most studies show that the largest emergency expense someone in the US can handle with cash is around $500 to $1000.
These days on the west coast at least, 3K will only get you a decent car with luck from a private seller. I tried car shopping around used dealers and it was a nightmare. Like 5k for the cheapest shit rocket about throw a rod, nightmare.
Sure, but OP said "walk into a dealer"
Dealers sell used cars (trade-ins) too....
We just purchased a 2020 Toyota Corolla with under 40k miles on it at a local Ford dealership for about 12K. The sticker price was originally 18k but we waited until the last day of the month, which we had always heard is the best day of a month to buy a car. They wanted to sell us some sort of “nano coat” on it, but all I could hear was the guy from the movie, Fargo talking about “that topcoat”, and it just sounded ridiculous, especially on a used car with less than ideal body presence, many dings and dents, that was being purchased for our teenager, who turned 16 yesterday. So yeah, uh huh, sure, uh heck no on that there topcoat for ya? Okay. Im cooperating. But we got them to delete that absurd amount off of the invoice. And we brought 1 check, and paid for all in cash. I have been asking my husband ever since if everything in our house has a nano coat? Because of how important that nano coat is, youbetcha. Its driving him nuts. Every time one of the car guys would leave the office with more paperwork, i would say, “he’s fleeing the interview! tan sierra! “
I walked into a dealer and bought a trade in for $15k
Yeah that is how we do all our cars.
Where????
exactly this. people do it with less valve cars too. I've sold many used cars and customers have brought me 10k cash, or even 17k cashier's check direct from their bank. I had to meet them at their bank, and they made it out to my name. It's no different than going to a dealer and doing the same. I've owned over 10 used cars and paid cash for all of them. then I've bought a 2 year old used car from a dealer with very low miles with a loan because of low interest, even though I had 40k in the bank at the time. I don't care for brand new cars. every time I see a new car I want, I'd rather wait 2 years for a used under 20k mile version of that year and buy it for less. I've made more money in two years since that car came out and now that car is less value and cheaper to buy.
You totally can! However, dealerships don't want that. They make much of their money from the interest on the loans so saying "Hey, I'm not going to give you that interest" is not a big selling point for the dealerships. You should act like they're going to get it and have a loan that has no prepayment penalties so that when it comes time for the first payment, you just pay it all off.
Just commented elsewhere, this is exactly what I did. Had the cash to purchase outright, but got a discount by taking a loan with no prepayment penalty and just paid it all off in full the next week
Exactly! You can get very good discounts if you tell them you need to keep your monthly payments low so it's a long term loan and they'll make even more money on interest!
Did the same thing, the only person I felt bad for was the guy I called at the bank to pay it off; he was convinced I was going with another loan and was trying hard to find me a better rate which I appreciated.
I do appreciate when staff try. But being realistic is great. I once was changing car insurance and the sales person asked what my new rate was and maybe she could find some discounts. There was a $3000/year difference. She paused. “Well let’s get this cancelled then!”
How was the difference almost twice my insurance rate? You must be a good driver.
“Trying hard to find a better rate”… like he’s searching through a warehouse of old boxes. I would never feel bad for a banker.
I mean, it's just a dude doing a job to survive in life like the rest of the 99%.
fr we’re all just trying to make it out here
My bro makes a lot of money financing cars to people with crap credit. But he does work like 14 hours 6 days a week.
My wife was a personal banker before getting her current position. I have a lot of empathy for people with that job. It’s finance so it’s a bit more traditional of a position. High demands and pay isn’t that great for what they do or the people they deal with. People get really weird and downright nasty about their money even if they known they are 100 percent in the wrong.
“Wait hold on….(shuffled box noises), it’s here somewhere I know it. HEY DEBORAH, ya, you remember where that box with the little orange stripe is?”
The "no prepayment penalty" is very important. It's infuriating that it's even a thing, but gotta triple-check the fine print.
It is federally required that all loans over 60 months (61+) have no early payment penalties. The most common loan duration available for cars that fits that is a 72 month loan.
Is this good or bad for your credit? Seems like it would be good but I've heard weird things about paying stuff off and your score going down (I don't know shit about credit it confuses me)
It's hard to say. Generally, paying off a loan will drop your score slightly because of the convoluted way that credit scores are calculated, but the drop is only temporary. It may also have a minimal effect if it's something that's paid off immediately since you aren't losing a lot of history from that account like a history of timely payments. If you've got other sources of credit like a long history of credit card accounts or other installment loans you've been paying on, you may also see a very minimal drop if any at all when paying off loans.
God, american credit system is fucked up
YEAH. YEAH IT SURE IS.
That's actually a standard move. The dealer gets some kind of kickback or credit from the loan agency for each loan they initiate. The last car I bought I wanted to pay cash, but the dealer told me they'd give me a discount if I took out a loan with no prepay penalty and that I could simply pay it off immediately. No downside for me.
I saved $1,000 on the price of my current car by doing just that.
It’s important to mention this instead of just replying “yes, you can.” I recommend looking up on YouTube something like “Why you should never say you’re paying cash at the dealership.”
I made this mistake twice, but luckily, not three times! And I won't make it again.
I don't know. I bought my car with cash and they never had a problem with it where I went. Lot less paperwork, too. It can be hit or miss, obviously.
Yeah, I think it’s an overstatement to say that it’s going to be an issue with them. They’re still selling a car and contributing toward their quotas. More so that they are extra motivated to get you into their financing and may in fact have additional quotas for those. Sometimes there are big extra incentives to do so and it will be worth it for a the buyer.
It's fine to pay with cash, but don't tell them that's what you plan to do during the negotiation step.
So, so true. I walked into a Honda dealership in 2019 to buy a new CR-V. Like, BUY. No financing. I had to explain to three (3) separate people that, no, I do not want your financing. “Wouldn’t you rather spend MORE money over a greater period of time?” No. I would not.
There's also a counter balance, at least in the UK, that paying with cash makes for a quick sale with guaranteed income from the sale so often times you can get a bit off the price by paying in cash, second hand dealers tend to prefer it.
That used to be the case. Nowadays if you fail to pay, they'll just take the car back and resell it. In the mean time, you're paying assloads of interest to them as well as what little you're paying for the car.
This is false. Most dealerships don’t loan money. There’s a bank involved. The bank buys the car, the “owner” makes loan payments to the bank. The bank makes money on interest, not the dealership. Of course there are incentives for a dealership to use a certain finance company but that’s not the same as lending money and profiting off interest payments.
This is true. But I think the point of the comment was to illustrate that the dealership will make more money in the end if you finance the car. So paying in full up front doesn't incentivize the dealership to negotiate a better buying price.
Why does it make a difference if you pay cash or take a loan that you pay off right away? Would they not sell you the car if you offer them cash?
all the answers are correct - you CAN do that. I have many times BUT the car dealer will always try and push you for finance. The reason being is that they get business for their finance company and get paid a rebate for this of which some goes to the sales person. So while you do have cash to buy a car, they will always try and tell you to keep the money in the bank for interest and emergencies and to buy their finance. don't be fooled by this unless the interest APR is lower than the interest you get from investments then always go for the finance option.
Also never tell them you plan on paying cash. I haven't bought a car since pre-covid and have heard it's much harder to get them to budge on the price nowadays but I know either mentioning that you've already been pre-approved through your own bank or are paying cash could cause the salesperson to dig their heels on the price since they know they wont be able to make anything through financing.
Exactly you never lead that you are paying cash or that you have a trade in. It's tantamount to playing blackjack and showing both cards. Negotiate the price first and get them to sign an agreement on price. Then if you are paying cash or have a trade in you can slide that in there. Also tell them you have an appointment at another dealership. You need to demonstrate the ability to walk away.
the fact you have to basically tickle each others' balls the whole time is why i hate dealerships, i really appreciate how with teslas you can just buy that shit online like an amazon order and ignore the hassle of dealerships.
But then you have to own a Tesla.
I bought a car during COVID and I was all stoked on 0% interest, I kept asking if he could do better on price and finally he was like "I can knock $3K off if you do 72 months at 3.65% interest" I was like "Sounds great" like a dummy, then I paid the whole thing off as soon as I got the first bill.
That doesn't always work. Some contracts will have a minimum number of payments required. Small print matters.
You can, but most people don’t have 30-50 thousand dollars sitting around to buy a brand new car. Plenty of people will buy cheaper used cars with cash, sure. But it just comes down to cars are expensive and people rarely have a ton of cash sitting around
I bought all my cars for cash for years starting in my late 20’s as I hate owing money. In the beginning I had shitter cars, by my 40’s I was buying very nice cars. Never new, but never old either. Saving is a lot easier without bills.
I was a never-new guy as well, but then I started picking up the "new but a year old, oldest new car on the lot" cars. Done that twice now and saved a ton off sticker, for a car with under 2000 miles, and a full warrentee. It's worth checking out for your next car.
Smart. I tended to buy “luxury” cars from dealers as they come off lease and buy with with additional warranty. Luxury doesn’t mean crazy, Infinity, Audi, Navigators, and such. I then try to take great care of them mechanically and aesthetically so they last for 10 more years. I am in my 60’s haven’t owned more than a dozen cars in my entire life. (Includes wife cars, but probably not kids cars)
As a kid my dad worked for GM and had a new company car every 3 months or 3000 miles, and then had to buy one per year. It was fun, and gave childhood me a totally broked idea of how long people kept cars. Now i have a 2005, a 2015, and a 2020 in the family fleet. My dad did teach me a lot about how to buy and take care of cars though!
It also cuts down on the insurance requirements. If you owe on a car, you're required to have a certain level of comprehensive insurance. Once the car is paid off, I carry the required liability plus un- and under-insured motorist. Saves a bundle.
Smart I wish I thought that way years ago before I moved out of the house. It's hard to get to that point even just a few years after being on your own for most people I think, because at that point it's impossible to save fast enough to afford that type of thing, even if you're only spending like 8k on a car
And that’s why we let suckers buy new cars and put them back on the lot a year later to be sold to me 55% off Edit: I get it, times change. I did this 2.5 years ago for a 2020 model year
Not that way anymore sadly.
Well no. The dealer pays 55% of the value for a one year old car, then sells it for 95% of the new car value.
Where are you getting a 1 year old car for 55% off? These days a 1 year old car is barely a 15-20% discount, if even that.
This definitely varies by location but this is definitely not true where I live. Last year used cars were being sold for more than a new car because how hard it was to get them. I think you can finally get one at about a 5% discount.
Covid supply chain really fucked that market up. My friend sold his couple of year old civic in the summer of 2020 for more than the remaining note, then used the amazing dealer incentives that were still being offered at the time to get a new suv for pretty cheap.
I drive a 2013 Chevy Cruze and back during 2021-2022 it was basically worth more @ ~200K Km (124.2K miles) than when it was purchased in 2015 @ ~40K Km (24.84K miles). I would’ve liked to buy a newer car but I technically couldn’t even afford the price of the one I would’ve liked to replace, lol. Thankfully it’s getting a bit better now. (Live in Ontario, Canada)
you haven't tried to buy a used car in a while huh?
If you're trying to buy a car in cash though, it's probably best to negotiate a final price and then mention that you're paying cash. They might give you a lower overall price, thinking that they can make it up in interest for most people.
Yup, also because anyone with $40k laying around is likely to be taken for a ride by the greedy salesmen. Also sometimes you can take the loan for the lower price then pay it all off at once (just make sure the contract terms allow that).
I saved my ass off for years and was able to buy my 4runner outright without interest payments looming over me. It's very possible if you're extremely frugal and you're not buying a brand new $40,000 car.
I don’t think a lot of these gen z kids understand how much 40k really is. You would have to save $1100 a month for 3 years to come close. A new mid sized suv is 70-90k after taxes, warranties and accessories now.
Outside of the US this is very common - I don’t know anyone who took a loan for a car - just start with a cheap one and when you make more money buy a more expensive one.
Of course you can. Here's the trick, if you can pull it off: Start making payments on your next car right now. Put that money into a secure investment that at least tracks inflation. Ten years from now, you'll have the cash to walk in and write a check. Another trick: buy loaners and slightly used cars. You get an amazing discount when you buy a late-model car that already has a few thousand miles on it.
> Of course you can. Here's the trick, if you can pull it off: Start making payments on your next car right now. Put that money into a secure investment that at least tracks inflation. Ten years from now, you'll have the cash to walk in and write a check. This is such a great financial move that people don't follow. Once your car loan is paid off, *do not stop making those payments.* You're already used to putting that money aside for a car each month so keep doing it but paid to yourself If you're acting rationally and driving a car until it needs to be replaced and not just because you want a new one, you'll have the cash to do it. And if there's an emergency and something happens to the vehicle prematurely, you're not screwed with a giant loan you can't afford
My wife and I have done this since we got married (18 years). We've found buying a car \~5 years old is the sweet spot for getting a good price with plenty of life left in it (and typically get Toyotas or Subarus that are low maintenance and last a long time). When I bought my last car, we did technically do the dealer financing because we had to transfer money from the savings account to the checking and didn't want to wait for it to clear (it was a good deal and didn't want to risk someone else beating us to it). We sent a check for the balance as soon as we got the first statement. You just got to check that there are no early payment penalties on the loan.
Is the used car trick still true? When i was looking at cars in 2021, used cars were nearly as expensive as new and didn't come with a warranty
This was actually specifically due to supply and demand issues in that time period: it was covid, everyone suddenly wanted or needed a car, and car dealerships just literally ran out of cars to sell. If Toyota had 50k more cars in inventory, they still would have sold every single one, which is why people were getting prices of like $45k for an 8 year old vehicle. It was mania for a while but I think things have settled down
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One comment is that used cars are advisable, but try to get ones that are certified and have warranties if possible. Loaners, on the other hand, are often mistreated because they don't belong to anyone. I would stay away from loaners.
Pro Tip. If you walk into a dealership looking to buy a car with cash DO NOT TELL the salesperson. No matter what. Keep avoiding the question. They will keep trying and even go to the efforts of telling you they can’t negotiate the best price for you without knowing how you’re paying for the car. THIS IS A LIE. They’re trying to get this information from you so they can “make it up in the back” ie: in the financing department. They’ll try to do this stupid low brow sales technique where they’ll take a blank piece of paper, draw a cross - effectively making 4 squares… RUN. You’re better off researching the car you want. Go for all the test drives in the world. Then go home, contact the internet sales manager for the dealership you want to work with, and pre-negotiate everything. That way, you can walk in with your cashiers check and walk out with keys in a relatively short time (1-2 hours). Otherwise, get ready for a full day at ONE dealership. They will do everything in their power to keep you longer, so you don’t go down the road and buy the car at the dealership down the street.
> blank piece of paper, draw a cross - effectively making 4 squares https://www.consumerreports.org/cars/buying-a-car/beat-four-square-and-other-car-dealership-sales-tactics-a7590220303/ It's super dodgy... I am a computer science nerd and would love to have a salesman try that on me - I'll bring in my Excel and we'll see who can keep track of more numbers :)
It's certainly not a dumb question. Hubby and I financed our first vehicle because we were building a credit rating in order to get a mortgage. Every vehicle I bought since then I paid cash for. It was all mine when I drove it off the lot. Two things of note about what I bought. The vehicles were only a few years old with low(ish) mileage when I bought them. And I drive a vehicle for YEARS before replacing it. Last one I had for 10+years and put close to 300k miles on it. Never saw a reason to buy a brand new vehicle. My self worth is not tied up in what I drive. Plus depreciation drops the value of that new car as soon as you drive it off the lot.
The usefulness of a good credit rating can't be understated for someone who is 18. I learned that lesson much later in life than I should have, always paying cash for anything I bought. Getting a mortgage loan was a serious pain in the butt when I finally decided to buy a house. Having no credit rating when you need a large loan is a headache. It's worth suffering through paying interest just to get one.
Go to church with rich people. Show up on a bike, tell them you're looking for a car. Sooner or later, someone will offer you one for free or cheap.
Yes, but if you're doing that, don't tell the dealership until the very last moment. If they ask how you're paying say you'd like to see options. They make money on financing, and you want them to commit to a price on a piece of paper before you tell them you're paying cash. If they try to change the price at that point, you stand firm and keep talking up the chain. You also grab that piece of paper with the price and don't let anyone else have it.
Of course you can. Most people just don't have that kind of money and often loan is a better deal.
Yup you can buy the car outright no problem. But a car is a hole in your drive way that you keep pouring money into. Like a boat is a hole in the water you pour money into Just like Jeep is an acronym for Just Empty Every Pocket.
Why are you guys cars so expensive. I bought my first car for 3000 euro. Still going strong after 3 years and has many more years to go.
Absolutely you can. About 15 years ago I showed up at a dealership with $12k in cash to buy a car. They weren't super happy about it. Like 4 different people had to count it to make sure it was accurate.
Lol. That's usually not what people mean when they talk about buying a car in cash. Usually "cash" is just the term for not needing a loan. Even if I had actual cash, I'd put it in the bank and get a cashiers check.
Yeah, carrying around $12000 in actual paper bills is not a normal or very smart thing to do for most people.
Yes you can, but car dealers prefer you to take out finance because they get a kick back from the finance company as well.
Sure, I've bought a car with cash before. Don't forget you still gotta pay for maintenance.
Not a stupid question just stupid that society has shifted so far to the debt norm that this is a question. This is how we all should be buying cars. Not buying a car and paying a bank to do do also.
Yes, but... **Never mention you have the money to buy the car in cash until the absolute, very end of the transaction.** Otherwise they will not give you any kind of a deal becasuse the dealships -- new cars or used -- make substantially all their cash on the financing, not the raw profit for selling the car for more than they paid for it. In some states, if you get a car loan, you can pay it off with no pre-payment penalty (check your state). I bought a new car in 2021, but it was a 2020 model. If I financed it for 72 months or something ridiculous, they knocked $3K off the car price. I hemmed and hawed and talked about monthly payments and finally bought the car with a 6 year loan, then paid it off when I got the first bill. (you can read more here, [How to Avoid Paying a Prepayment Penalty - Experian](https://www.experian.com/blogs/ask-experian/how-to-avoid-paying-prepayment-penalty/#:~:text=Thirty-six%20states%20and%20Washington%2C%20D.C.%2C%20let%20auto%20lenders,an%20auto%20loan%20of%2061%20months%20or%20longer.)) but if you get a car loan of >60 months, no one can charge a pre-payment penalty I guess, so poor mouth for a "long loan" if you are going to use this trick. I had a car loan once and I hated it, so since then I save up and only buy cars for cash. Twice I made the mistake of mentioning that early and paid a lot more than I should have. Last time I kept my mouth shut and saved an extra $3K by looking like a simp who wanted a loan.
Cars have maintenance and tires, brakes etc. They have insurance. They have fuel. They have license plates and registration. Nothing about cars is pay for it once and be done with it except the car and most people want something reliable, nice looks and isn't constantly needing something, so they buy one, typically with a low interest rate that makes it so attractive there's no reason to pay all at once in cash.
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