Overhaulin'

I want to buy a new car. Will I get a better price if I pay cash or take a loan that I pay off immediately?

I am in a position to pay for a new car with cash. I am curious: will I be in a better bargaining position if I approach the dealer with cash (yes, those green papery things with dead presidents on them) or if I get a loan and pay it off right away? I figure that if I offered cash, the dealer might give me a discount. On the other hand, with a loan the dealer might think they'll make some money on the interest and will offer a lower price. What do you think?

Public Comments

1. loan costs make cash king... use the net to preshop' take printouts to dealer.
2. BARGAIN FIRST ASK SALE ENGINEER "OK IF I PAY U CASH HOW MUCH DISCOUNT U WIL GIVE ME ??" SALE ENGINEER "MAY BE 500$" YOU " JUST 500 $ ??? I AM GETTING BETTER DEAL FROM OTHER SHOWROOM?? THEY ARE GIVING ME ALLOY WHEELS WITH BIG TYRES AND UPGRADE SEATS ? SALE ENGINEER WILL THINK AGAIN OK SIR WE WILL NOT GIVE ANY ACC. BUT WE CAN GIVE U DISCOUNT OF 1000$$ NOW U SAY OK HOW I WILL LOAN CAR NOW ? ACTUCALLY NO NEED TO ASK THAT MUCH.. ME " WHERE IS MY 10 POINTS ??"
3. You will always be in a better bargaining position with cash. Cash means that least amount of work for the dealer, dealer do not make money from any the interest. The risk is 'sold' to a third party. Also you are normally tied into a loan - so that you have to pay the interest. Most a have a 'pay back early' penalty. Go with cash.
4. money talk.
5. You are always in a better position with cash. You can stay out of the payment game, that's where they get you. Shop around for the best deal, don't be afraid to play one dealer off another.
6. They don't usually care which you pay with. Money is money; however, cash is quick money in their pockets. If they need to make some cash quick, they may want you to pay cash. Many dealers have agreements worked out with banks and they earn interest on the loan that you get through the dealership. That's more money over time for them. Taking out a loan builds your credit, so you can get better and bigger loans in the future. It's best to pay the loan off over time though. This proves that you can handle debt and is better for your credit score than paying the loan off all at once. Of course paying it all at once means that you won't have interest to pay, and it does increase your credit some.
7. Cash is always better. Don't tell the dealer you have cash. Shop around and find best price. Then ask for a discount for cash.