Is this possible?

waloshin

macrumors 68040
Original poster
Oct 9, 2008
3,183
68
When buying a used car from a dealer, can you lower the price if you have the cash to pay for it and don't have to finance it from the dealer?
 

RKO

macrumors 6502
Oct 21, 2008
468
2
For sure. If I was a used car salesman and someone waves cash at me, I would be stupid not to try and make a deal to get a sale. Go for it. :D
 

mkrishnan

Moderator emeritus
Jan 9, 2004
29,777
12
Grand Rapids, MI, USA
Sometimes, but mostly because they're idiots -- assuming your likelihood of paying back the loan (which they can estimate accurately) is high, you're generally robbing them of a significant source of income when you pay up front. Technically in a truly transparent economy you'd probably pay slightly more to avoid the loan. But you can use the standard psychological tricks -- I have this wad of cash (or a checkbook right here)... here, I've written a check for $14,995 -- now I can void it or hand it to you, it's all your choice. Here, let me rip it out for you....

Now my experience however, is that I would not make this a primary contention -- negotiate the price down as far as you can first, and then talk about paying for it.
 

steve2112

macrumors 68040
Feb 20, 2009
3,023
6
East of Lyra, Northwest of Pegasus
As long as you don't get too crazy with the discount, you should be able to get them to lower the price a bit. On a new car, dealers usually make more money from the financing than they do from the sale, but used cars can be different.

OTOH, since most salespeople are on commission, it can be very difficult to turn down a guaranteed sale. Just make sure there is a bit of room for them to make said commission.
 

mkrishnan

Moderator emeritus
Jan 9, 2004
29,777
12
Grand Rapids, MI, USA
As long as you don't get too crazy with the discount, you should be able to get them to lower the price a bit. On a new car, dealers usually make more money from the financing than they do from the sale, but used cars can be different.

OTOH, since most salespeople are on commission, it can be very difficult to turn down a guaranteed sale. Just make sure there is a bit of room for them to make said commission.
See my perception is that used cars are even more skewed towards financing profits -- at least in the US, used car loans almost invariably carry higher interest rates. The 0-3% interest rates for new cars are almost unheard of for used cars, at least traditionally, because they're essentially a marketing expense subsidized by the car maker (the OEM pays out of its marketing budget to its financial arm to subsidize the below-cost loan as another form of incentivization).
 

steve2112

macrumors 68040
Feb 20, 2009
3,023
6
East of Lyra, Northwest of Pegasus
See my perception is that used cars are even more skewed towards financing profits -- at least in the US, used car loans almost invariably carry higher interest rates. The 0-3% interest rates for new cars are almost unheard of for used cars, at least traditionally, because they're essentially a marketing expense subsidized by the car maker (the OEM pays out of its marketing budget to its financial arm to subsidize the below-cost loan as another form of incentivization).
True, in the traditional sense, they made more on the financing of new cars. Before interest rates tanked, most car companies made more money from their financing arms than from the sale of new cars. Now, with rates like you are talking about, I think that is out the window. What I was thinking of is that many of the corporate owned financing companies (GMAC, Toyota Motor Credit, etc) are less likely to finance used cars. Those are often done through third party banks. At least mine were financed that way.
 

waloshin

macrumors 68040
Original poster
Oct 9, 2008
3,183
68
should i ask that they pay the five percent pst or else i wont buy the car
 

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