Overhaulin'

What's the best way to get the best deal on a new car when paying cash?

I bought my first car I few years ago and was able to pay in full but I think I made a mistake in letting the sales agent know I was going to pay cash from the jump. Will dealerships generally sell a car for less money if a customer intends to pay cash for it? What are some Haggling tactics I can use to get the price down further before I let the sales man know I am going to pay cash and hopefully have them mark the price down even further?

Public Comments

1. Actually, paying cash is not really an advantage. Car dealers would much rather sell you a car with a loan financed by their manufacturer or the finance company they use. That way, the total profit on the deal is much higher, coming from the stream of front-loaded interest payments you would be making. (Look up the Rule of 78's to see how auto financing really works.) The best way to get the lowest price is to find a highly motivated dealer (someone with a lot of inventory that is not moving), let them know you have alternatives (eg you have visited other dealers and perhaps have written offers in your hand), act genuinely distinterested in the entire sales process (let them know you will walk out if you don't like the deal or salespeople ), be prepared to spend a lot of hours with their salespeople when you're ready to make the deal (wear them down), and perhaps buy a car on a slow day (when the weather is really bad and nobody is shopping.) Show indifference - don't fall in love with one particular car (most people focus on the exterior and interior colors, and allow themselves to get too emotionally connected to a car.) Some people advise shopping on the last day of the month or quarter, so a salesperson can "make the numbers", but I am not sure this works. It sounds too easy, and besides, all the dealers know about it. And finally, don't buy a convertible in the spring or summer (when demand is highest) or an SUV in the winter when the car manufacturers are running commercials of their vehicles blasting thru snow drifts. If you can buy a 2007 car at the end of its model year, you can get a great deal because of the mfr's year-end incentives. If you want a 2008, you'll pay dearly for the privilege. Go get this book and read it from cover to cover a few times: "Don't Get Taken Every Time: The Ultimate Guide to Buying or Leasing a Car, in the Showroom or on the Internet " by Remar Sutton. It is an easy, enjoyable read, and full of information. Sutton is a former car salesman, one of Chevrolet's top producers before he left the business. Good luck.
2. Tell them you are pre approved dont tell them you plan on using cash. Dont tell them any of your financial information they use this to get more information out of you. Tell them you want your final price to be the out the door price including taxes, dealer fees, plates etc. Go prepared! look on the website at a few cars your interested in and get a kelly blue book and a NADA value so you know what its worth. Hope this helps! have fun.
3. i would never let a car salesman know that i was intending to pay cash.Tell him you need finance.they love this as they make more money.ask for any mod cons you would expect.also get after sales and warranty gaurantees agreed.He will disappear for 10 mins probably fiddle around with calculator at the same time a big smile will come on his face.he will come out and give you the run down.Whilst this is taking place.try not to look pleased with his calculations.start to scratch your head as if in a confused state.then quickly say what would the deal be if i could raise the cash.if he does give you a good deal at this point take it.if not start to head for the door.he will try to stall you.now is the time to strike when the iron is hot.state a sum $1000cheaper than his figure.he can only try to meet you in the middle.do not agree at this point.ask if you can get a test drive.he will be only too happy to oblidge.whilst on the test drive .look at all the things on the car.if you are lucky enough to get to actually drive.say that the steering feels heavy or the driving position is un comfortable,anything as long as you do not appear extatic.Mention the fact that your wife or girlfriend will be driving it and she too would want a test drive if possible.Once your test drive is over get on your mobile phone.pretend to be describing the car to her.rattle off the figures he gave you.then say .my partner has seen another great deal she wants me to go and look at .she says that i will save $300.he will then have to go over his figures.if he doesnt come down start walking.he will hit the panic button as he knows some other dealer will take your cash . try it.