buying a new car with cash upfront

Discussion in 'Community Discussion' started by leomac08, Mar 6, 2012.

  1. leomac08 macrumors 68020


    Jul 12, 2009
    Los Angeles, CA
    my family is currently in the market in buying a new 2012 car model (I would opt with a used one) but since we're buying it completely off the lot, might as well get a new one.

    My family currently has a poor credit history, so financing or leasing would be a hassle since credit is poor. After talk, it came to a conclusion that paying cash upfront would be the best decision.

    However, I have been reading articles stating even though paying cash is great because you don't worry about monthly payments or interest, the dealers hate it because they make no profit. On the other hand, we have never purchased a car off the lot with cash upfront. My parents wonder do they still do a credit check before buying?

    I read that it is recommended not to tell the dealer you want to buy a car with cash when viewing/testing the car until the loan papers are out.

    Has anybody ever bought a car with cash upfront within the last several years? How was the experience? Successful? Fail? Sorta?

    My family has been saving over time for a couple of years now and we need a family car. We have been looking to high end compact SUV's like a VW Tiguan to a base Audi Q5 model.
  2. Gator24765 macrumors 6502a


    Nov 13, 2009
    Who cares about the dealer.. Pay with cash but like you said don't mention it until the last moment.

    Here is another piece of advice. Improve your credit Score!
  3. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006

    Honest truth is they do not care to much. Sales guys love it because they get a little more money as the profit is not moved to the back end but you should always agree to a price of the car before talking about payment.

    Remember to the dealership it counts as cash if you are getting a loan from the bank and not the dealership as the dealership is not getting any kick back from those banks and what not.
  4. mstrze macrumors 68000

    Nov 6, 2009
    Well...a new car will depreciate a heck of a lot more than a used (but certified) one. You will be throwing more money away buying used...and it will actually be physical money, so it will hurt you a lot more. Not really a 'might as well' situation at all in my mind.

    My last purchase was used from Enterprise rentals. I know for a fact that all maintenance was done at the appropriate times AND the car was washed and inspected for problems after each and every new driver. Have had the car for 3 years now and still love it!

    Yea, I wouldn't let them know you intend to pay cash until the end as well. That way, you can negotiate the lowest price a normal situation, a dealer may take a bit of a loss on the price since they know that they can make some of it back in financing.
  5. yg17 macrumors G5


    Aug 1, 2004
    St. Louis, MO
    No offense, but if your credit score is poor, don't buy a luxury car and use the money you save to do whatever's necessary to improve your score (pay off credit cards, etc).
  6. vrDrew macrumors 65816

    Jan 31, 2010
    Midlife, Midwest
    I just bought a new car with cash.

    It really doesn't matter to the dealership. Yes - they won't get the chance to make a profit from the finance company, but that really won't be an issue when it comes to the negotiations over the price.

    Paying cash certainly is a lot simpler. You don't have to fill out all sorts of forms, answer all sorts of questions. And sit around waiting for the finance company to make their decision.

    When you finally agree on a price, you'll need to give them some sort of a deposit. Usually a personal check is OK for this part of the deal - and in most cases a couple of hundred dollars will be sufficient. They will want a bank or Cashiers check for the balance on the car, so you'll need to visit your bank for that.

    You didn't mention trading in an existing car. If you are planning on doing this, make sure you research what your used car is worth. The biggest issue most used car traders have is they have an unrealistic idea of what their old sled is really worth.
  7. Designer Dale macrumors 68040

    Designer Dale

    Mar 25, 2009
    Folding space
    ^^^ What he/she said is more than true.

    We always buy used and pay with cash or as much cash as possible. Dealers start to act like they smell dope when you pull out the cash. You can get a good deal while they are under the influence.

  8. Vudoo macrumors 6502a


    Sep 30, 2008
    Dallas Metroplex
    Negotiate the price first and then just write a check. Or you can apply for a loan and pay it off immediately when the first statement arrives.
  9. neiltc13 macrumors 68040


    May 27, 2006
    An Audi Q5 is not a "family car" - it is an off road car. If you need a family car, look at the Volkswagen Passat or Audi A4. Or save yourself a lot of money by buying a less expensive car, like a Ford Focus or Chevrolet Cruze.

    Also, I assume you're not going to pay with actual physical cash, but a debit card, right?
  10. Tomorrow macrumors 604


    Mar 2, 2008
    Always a day away
    This isn't necessarily true. Try to secure financing before you go to the dealership. It gives you leverage when you start negotiating with them. They may offer to try to beat the rate you brought in - let them. It can't hurt.

    I got a loan once on farily muddy credit. My interest rate wasn't the best, but it was what I needed at the time.

    First of all, you're not doing this for the dealer's benefit. Don't worry about whether they hate it.

    Second of all, they're going to make profit - they just won't make it on the financing. Like others have said, negotiate your best price, be vague on whether you intend to finance, and once you have the best price you can get (one you can live with), write them a check.

    They can't run a credit check without your permission. I wouldn't worry about it.

    They're not going to turn down a cash sale over your credit.
  11. danny_w macrumors 601

    Mar 8, 2005
    Austin, TX
    While that is usually true it is not always the case. I usually buy new, but the last several times I have bought a car I have compared the cost to buy used and in every case it turned out that buying new was cheaper. For example, the last car that I bought new was a 2009 Mazda Miata Sport but after the 2010's were out for quite a while. Mazda was clearing out the last of the 2009's and were offering $6500 cash off the window sticker, plus the dealership gave another $1000. They also had a used 2009 Miata just like it but in the color that I really had wanted, but it would have cost at least $1000-$2000 MORE than the new model, and it had 1 year less warranty! The same was true when I bought the previous car, a 2001 Lincoln Town Car Signature; every used car that I could find actually cost MORE and had at least 30k miles on the odometer.

    Moral of the story: Don't always believe the old myth that buying used is cheaper, because it is simply not always the case. No matter what you get, do your homework and make a wise decision after all of the facts are in.

    And as for when to mention cash, I always stress to the dealer upfront that I want the best cash price that they can give, and actual details and trade (if applicable) will be worked out late, and that I am not interested in negotiating. I find that this always works best for me, and I usually end up with a new car for thousands less than Edmunds and others say is the cheapest price that can be had. The secret is to stand your ground and be willing to walk away if they quote you a price that is not serious. I have actually had dealers tell me that the window sticker price is the best they will do; if they do that simply walk away and watch as their jaws drop to the floor.
  12. dukebound85 macrumors P6


    Jul 17, 2005
    5045 feet above sea level
    This. Especially since the earthquake/clash for clunkers/etc the cost of a used car has risen dramatically.

    When I was shopping for cars this last summer, a 1-2 year old used car was being sold for more than the MSRP sticker price that the dealership forgot to remove from the glovebox.

    Not to mention, if you finance, you ALWAYS get a cheaper rate on a new car vs used.
  13. wordoflife macrumors 604


    Jul 6, 2009
    I agree. Like he said, no offense but I'd do the same.
    Buying a luxury car on cash seems weird to me.
  14. Gregg2 macrumors 603

    May 22, 2008
    Milwaukee, WI
    Did that really come out the way you wanted it to? Don't you mean "buying new"? Not saying I agree in all cases, but I think that makes more sense in context.

    The new vs. used car debate was held here in another thread recently. Some of the members here are actually pretty smart, and know more than the folks at Edmunds who only spend 40 hours a week studying the auto industry. But, if you look, you can find info similar to what a post above says, that in many cases, especially in the current economy, buying new can be more cost effective. It depends a lot on how long you plan to keep the car, much the same way as the advisability of refinancing a house is greatly influenced by how long you plan to live in it.
  15. leomac08 thread starter macrumors 68020


    Jul 12, 2009
    Los Angeles, CA
    Thanks everyone, I shall consider all your inputs!

    We are not in debt, it's just saved money :eek:

    Yes, even I would be shocked if someone came with more than $10K in cash :eek:
  16. Rooskibar03 macrumors 65816


    Feb 5, 2007
    State of Denial
    Current employee of a dealership here. (sales and finance manager)

    First thing to understand; your sales person and his boss (sales manager) don't care how you pay for a car. The whole "what is my best cash price" carries not weight with us. We get paid from our banks faster then your check will clear ( and we know we will get paid) Any dealer who has their procedures together is going to pull your credit or at the very least run what is called a Red Flag background check. The Office of Foreign Asset Control (OFAC) requires a dealer to confirm who they are doing business with. We pull credit on every customer, cash or otherwise, with the size of the checks we take from our clients we need to know who we are doing business with.

    The finance manager will be bent out of shape you are paying cash, but it's not the end of the world. He will still present you with product options that might be worth a look, let him do his job and maybe something will actually be a benefit to you.

    Finally as an 8 year veteran of Audi sales before moving to my current brand let me tell you up front if you go looking for a "deal" on a Q5 you are in for a lesson in supply and demand. The deal on a Q5 is actually getting one, especially a base model as no one orders that model for inventory in bulk.

    You stand a better chance getting a good price on the VW or something from one of the japanese import brands.

    Good luck with your purchase. Have fun, don't walk around with a chip on your shoulder, and for gods sake don't lower yourself to the "we'll walk" bit.
  17. falcora macrumors 6502

    Oct 8, 2011
    He said he wanted an SUV though, all the cars you suggested are sedans.
  18. steve2112 macrumors 68040


    Feb 20, 2009
    East of Lyra, Northwest of Pegasus
    Having a poor credit score doesn't mean you don't have any money. Not borrowing money and paying cash for everything will kill your FICO score, but it doesn't mean you are broke.

    Although I buy used, this is very true. A few years ago, a friend of mine was looking for a full-size truck. This was when GM was doing their employee pricing stuff. He was initially looking at 1-2 year old used trucks, but ended up buying a brand new truck because it was cheaper with the employee pricing than the used trucks he was considering.

    Since when has what the OP said ever mattered around here? :rolleyes:
  19. slick316 macrumors 6502

    Sep 28, 2005
    I would seriously consider looking into restoring your credit. If you were looking at dropping $45k or whatever on a car, spend less on an comparable non-luxury car and finance it, even if the rate is high, just to bring your credit up.
    I bought a new car last year. Negotiated it to $36k, had a trade in and financed the rest. I could have just written a check for the full amount, but when the interest rate was 0.9% for 60 months, why should I? I borrowed over $25k and will only end up paying $800 or so in interest. The cash I retained by not paying for my car in full could go towards better things.
    And forget about getting a deal on a Q5, I wouldn't be surprised if there wasn't even one on the lot to drive. Audi doesn't produce a ton a cars like Honda so it's a little harder to get a deal on them.
  20. acidfast7 macrumors 65816


    Nov 22, 2008
    1. I wouldn't consider a VW Tiquan anywhere near luxury.
    2. Do you guys (US) get the Q3 yet? It's quite nice with 2.0 TDI (50mpg highway).
  21. senseless macrumors 68000


    Apr 23, 2008
    Pennsylvania, USA
    In some cases, it's special financing OR a rebate. Otherwise, I guess it's silly to turn down .9% or zero for 48 months. You could buy a safe utility stock and get a 3% dividend with minimal risk.

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