First Time Paying CASH

tylerzero · 01-25-2006, 04:21 PM

I plan to buy an LX or EX Civic sedan (front lip spoiler, deck lid spoiler, all-season floor mats, and mud guards as options), probably around the summer months and won't be financing...just straight up writing a check. Generally speaking, does offering cash outright give the buyer any leverage at the dealership? With demand for the '06 Civics the way it is now, will the all-cash route make any difference whatsoever in my case as far as getting a good deal?

wishingsi · 01-25-2006, 04:41 PM

right now probally not, when they can just finance it to someone else for the same selling price, by the summer the newness factor will be done, and you will see the ads for a 10,000 dollar dx..you know the ones im talkign about...then id say yes you would have more power to fight the beast!!

jandree22 · 01-25-2006, 04:45 PM

You're avoiding all the interest(thousands of $$$) from a loan... if that's not motivation enough, I don't know what is!

***Jaranath*** · 01-25-2006, 05:29 PM

Generally speaking, if anything I'd say paying cash would hurt you--less opportunity for the dealer to hide the profit he takes from you via trade-in or financing.

But, as jandree says, you save more money than you ever would through negotiation by not paying interest.

**CameronJr9** · 01-25-2006, 05:32 PM

I wouldn't mention cash up front. You may say you've got "some" money tucked away, but I would be VERY vague about it. Haggle with the dealer and see what's the lowest price you can get for the car, have them write up that quote, then when they start talking financing, just say, "Oh, no...that's fine. I'll write a check."

OblivionJin · 01-25-2006, 06:39 PM

Quote:

Originally Posted by CameronJr9

I wouldn't mention cash up front. You may say you've got "some" money tucked away, but I would be VERY vague about it. Haggle with the dealer and see what's the lowest price you can get for the car, have them write up that quote, then when they start talking financing, just say, "Oh, no...that's fine. I'll write a check."

I agree, in fact I'd straight up lie to the dealer (thats what I did). I just told him straight up what the APR said I'll probably end up financing. After all was said and done I just made a bs cell phone call that went something like "Oh you sure honey? Alright then, if you're sure we have enough. Sir, I'll just write a check." He just gave me an "...Oh -_-" face lol

tylerzero · 01-25-2006, 06:54 PM

Quote:

Originally Posted by CameronJr9

I wouldn't mention cash up front. You may say you've got "some" money tucked away, but I would be VERY vague about it. Haggle with the dealer and see what's the lowest price you can get for the car, have them write up that quote, then when they start talking financing, just say, "Oh, no...that's fine. I'll write a check."

Good advice. Will take that under advisement. Thanks.

peliROJO · 01-25-2006, 07:10 PM

^^ You are correct.

Lie. They do it to us and we should do it to them. Let them believe you will finance and that you will probably get the extended warranty. Then negotiate the price and play hard. Walk in knowing the invoice price (dealer's cost) and check Edmunds TMV. Because as it's already been said, the dealers expect to make money on the back end via financing and a marked up warranty. Some of the interest gets back to the dealership (and maybe to the salesman himself).

Write the check and purchase your extended warranty online through a dealer such as collegehillshonda.com or others that have been mentioned on this board.

jandree22 · 01-25-2006, 07:40 PM

Good point about keeping it in their head you're going to finance. If they know you have the means to just throw a lump of money down, they'll be less flexible to haggle. Make them think they'll get the financing kickback and that you're just barely able to afford the car. Then when you get a kick ass price, well... you know:rolleyes:

zadscmc · 01-26-2006, 08:24 AM

The last car I purchased, I had a check in my hand from a finance company for the entire purchase price of the car. I didn't have to use it, but I didn't let the dealer know. Before we had even talked about the price of the vehicle, he wanted to know if I was financing. I told him that decision was based on the price we negotiated. When he wouldn't drop it, I got up to leave. He talked at that point.

When we finished negotiating, then, and only then, did I ask him about financing. I asked him for 36, 48, and 60 month costs, based on the price we agreed upon. Of course, the first estimates INCLUDED extended service and warranty. Again, I (politely) read him the riot act. He then produced the real finance numbers.

So, before I made a decision, I had three options in front of me:

Write a check from my home equity line
Use the line of credit that I had secured
Use the financing that the dealer offered

I used the second, because the APR was 2.5 points below the dealer, and 1 point (at that time) below the HEL. I challenged the dealer that the finance rate he provided was too high, and he did take it back to review it, but (whether he did anything, I'll never know), but it didn't change.

The moral of the story is to have as many options open as possible. If the car you are looking at is plentiful, you have more negotiating power.

Also, if it is your first time buying, and you have little or no credit, you may want to finance it. Just be disciplined enough not to spend the money that you would have paid for the car.

I used E-loan and had three choices available to me, after my online application, in 24 hours, and the blank check in my hands in two business days.

I hope this helps.

CivicsRdBest · 01-26-2006, 11:35 AM

From a dealer's point of view, they're in it to make money. The more money they get the happier they are. They try to get the most out of everything, or whatever they can get from anything.

Do not mention the method of payment until after you negotiate a price. If the dealer is persistant, just mention you might finance through them if the number is better than some imaginary but high number. Be very vague about your payment plans, like mentioned, untill after you get a final price that you're happy with. If they can't get you with the price of the vehicle, they'll try to get you with the other things, so make sure that you negotiate one and the rest will fall into place.

Do not fall under the impression that you're required to buy the vehicle or that you're stuck with it because the dealer had to talk with his manager before showing you the final price or becuase you've spent so much time at the dealership. Make the dealer think that he or she is the one wasting his or her time by not being straight-forward. The best way to do this is by getting up and walking out. If you do walk out though, don't come back unless the dealer starts talking again about lowering the price.

Do remember that the are people selling cars. They're not machines giving away cars. They need to make a profit to stay running. Factor that in when calculating the price of the car you want. They also have feelings and no matter how bad they can get sometimes, they've got feelings that should be considered too.

**Silver8th** · 01-26-2006, 03:25 PM

Quote:

Originally Posted by zadscmc

The last car I purchased, I had a check in my hand from a finance company for the entire purchase price of the car. I didn't have to use it, but I didn't let the dealer know. Before we had even talked about the price of the vehicle, he wanted to know if I was financing. I told him that decision was based on the price we negotiated. When he wouldn't drop it, I got up to leave. He talked at that point.

When we finished negotiating, then, and only then, did I ask him about financing. I asked him for 36, 48, and 60 month costs, based on the price we agreed upon. Of course, the first estimates INCLUDED extended service and warranty. Again, I (politely) read him the riot act. He then produced the real finance numbers.

So, before I made a decision, I had three options in front of me:

Write a check from my home equity line
Use the line of credit that I had secured
Use the financing that the dealer offered

I used the second, because the APR was 2.5 points below the dealer, and 1 point (at that time) below the HEL. I challenged the dealer that the finance rate he provided was too high, and he did take it back to review it, but (whether he did anything, I'll never know), but it didn't change.

The moral of the story is to have as many options open as possible. If the car you are looking at is plentiful, you have more negotiating power.

Also, if it is your first time buying, and you have little or no credit, you may want to finance it. Just be disciplined enough not to spend the money that you would have paid for the car.

I used E-loan and had three choices available to me, after my online application, in 24 hours, and the blank check in my hands in two business days.

I hope this helps.

Good info. But I believe when you do a application on E-loan several companys run credit reports on you which can drop your credit score.

zadscmc · 01-27-2006, 08:55 AM

It will only lower your credit score (marginally) for others looking at it after that inquiry. In fact, when the dealer looked up my credit, the inquiry from eLoan didn't even show up.

ELoan produced a loan that was 3.25 percent, so I jumped on it. Even if I had cash, I would've taken that loan, because I can get the same rate, or better, by putting the money into an interest bearing account. The net result is a three year loan, paid off on time, in good standing, that far increasing my credit rating then the points left for the inquiry.

The credit score is to be used just for these types of purchases. And if there are *many* inquiries into your credit report, that is where they bash you for the points.

Also, you can now look at your credit report, once a year, for free, from each of the big three reporting agency. My suggestion is that you pull one from each reporter every four months (this report is *NOT* indicated on the report), just so you know *exactly* what is on and not on your report.

The link to the site for the free credit report is: https://www.annualcreditreport.com/cra/index.jsp

Good luck.

***Jrfish007*** · 01-27-2006, 11:47 AM

Yeah..... I wouldn't pay up front for a car totally. Infact I purposefully traded in a car that I owed on, tranfered the negative equity to the '06 civic. The finacing I got was 3.5%, which my intrest on my mutual funds is at 7.5% So by leaving the money in my mutual account, I am still making a net profit of 4% on the money I "could" have spent, if that makes sense. Also, by being able to pay a loan that is worth more than the car is worth (which the loan is now around 12,000, which is less than the car is worth; so now the car is worht more than what I owe on it), my credit report is now about 790, I'm really tring to figure out how to get into the 800's, then the bank will give me a 4 years intrest free mortgage when I buy a house... I need a house soon lol

***Jrfish007*** · 01-27-2006, 11:51 AM

What I did was bargian around, then say what if I pay the car up front fully, they said they would take $500 off, I said, I'll finace it at that price then. The car manager was not happy, but oh well. But yeah dealers like all the money up front because they are means they get all their money up front for the sale, they don't have to wait around for the banks and all that and you to make payments.

jandree22 · 01-27-2006, 01:08 PM

You know what I hate, is when dealers try to talk to you not about what the price of the vehicle will be, but about how much you're looking to spend on your monthly payments. This happened to me a few times already and it's really a sneaky way that they can screw you on.

If you're able to simply set a hard price on what the vehicle and only the vehicle will cost, you can make a much more educated and powerful decision on what's in your best interest.

01-25-2006, 04:21 PM	#1 (permalink)
tylerzero Member Join Date: Nov 2005 Age: 9 Posts: 99 iTrader: 0 / 0%	First Time Paying CASH I plan to buy an LX or EX Civic sedan (front lip spoiler, deck lid spoiler, all-season floor mats, and mud guards as options), probably around the summer months and won't be financing...just straight up writing a check. Generally speaking, does offering cash outright give the buyer any leverage at the dealership? With demand for the '06 Civics the way it is now, will the all-cash route make any difference whatsoever in my case as far as getting a good deal?

01-25-2006, 05:32 PM	#5 (permalink)
CameronJr9 Join Date: Feb 2006 Location: Louisville, KY Age: 28 Posts: 25,856 Back and Forth Forever iTrader: 6 / 100%	I wouldn't mention cash up front. You may say you've got "some" money tucked away, but I would be VERY vague about it. Haggle with the dealer and see what's the lowest price you can get for the car, have them write up that quote, then when they start talking financing, just say, "Oh, no...that's fine. I'll write a check." __________________

01-26-2006, 08:24 AM	#10 (permalink)
zadscmc Junior Member Join Date: Jan 2006 Age: 49 Posts: 26 iTrader: 0 / 0%	The last car I purchased, I had a check in my hand from a finance company for the entire purchase price of the car. I didn't have to use it, but I didn't let the dealer know. Before we had even talked about the price of the vehicle, he wanted to know if I was financing. I told him that decision was based on the price we negotiated. When he wouldn't drop it, I got up to leave. He talked at that point. When we finished negotiating, then, and only then, did I ask him about financing. I asked him for 36, 48, and 60 month costs, based on the price we agreed upon. Of course, the first estimates INCLUDED extended service and warranty. Again, I (politely) read him the riot act. He then produced the real finance numbers. So, before I made a decision, I had three options in front of me: Write a check from my home equity line Use the line of credit that I had secured Use the financing that the dealer offered I used the second, because the APR was 2.5 points below the dealer, and 1 point (at that time) below the HEL. I challenged the dealer that the finance rate he provided was too high, and he did take it back to review it, but (whether he did anything, I'll never know), but it didn't change. The moral of the story is to have as many options open as possible. If the car you are looking at is plentiful, you have more negotiating power. Also, if it is your first time buying, and you have little or no credit, you may want to finance it. Just be disciplined enough not to spend the money that you would have paid for the car. I used E-loan and had three choices available to me, after my online application, in 24 hours, and the blank check in my hands in two business days. I hope this helps.

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01-25-2006, 04:41 PM	#2 (permalink)
wishingsi Senior Member Join Date: Oct 2005 Age: 23 Posts: 118 iTrader: 2 / 100%	right now probally not, when they can just finance it to someone else for the same selling price, by the summer the newness factor will be done, and you will see the ads for a 10,000 dollar dx..you know the ones im talkign about...then id say yes you would have more power to fight the beast!!

01-25-2006, 04:45 PM	#3 (permalink)
jandree22 Senior Member Join Date: Nov 2005 Location: Hershey, PA Age: 25 Posts: 330 iTrader: 0 / 0%	You're avoiding all the interest(thousands of $$$) from a loan... if that's not motivation enough, I don't know what is!

01-25-2006, 05:29 PM	#4 (permalink)
*Jaranath* 8 arms and a beak Join Date: Nov 2005 Age: 32 Posts: 861 iTrader: 0 / 0%	Generally speaking, if anything I'd say paying cash would hurt you--less opportunity for the dealer to hide the profit he takes from you via trade-in or financing. But, as jandree says, you save more money than you ever would through negotiation by not paying interest.

01-25-2006, 07:10 PM	#8 (permalink)
peliROJO Senior Member Join Date: Oct 2005 Location: currently in Africa Age: 30 Posts: 1,234 iTrader: 0 / 0%	^^ You are correct. Lie. They do it to us and we should do it to them. Let them believe you will finance and that you will probably get the extended warranty. Then negotiate the price and play hard. Walk in knowing the invoice price (dealer's cost) and check Edmunds TMV. Because as it's already been said, the dealers expect to make money on the back end via financing and a marked up warranty. Some of the interest gets back to the dealership (and maybe to the salesman himself). Write the check and purchase your extended warranty online through a dealer such as collegehillshonda.com or others that have been mentioned on this board.

01-25-2006, 07:40 PM	#9 (permalink)
jandree22 Senior Member Join Date: Nov 2005 Location: Hershey, PA Age: 25 Posts: 330 iTrader: 0 / 0%	Good point about keeping it in their head you're going to finance. If they know you have the means to just throw a lump of money down, they'll be less flexible to haggle. Make them think they'll get the financing kickback and that you're just barely able to afford the car. Then when you get a kick ass price, well... you know:rolleyes:

01-26-2006, 11:35 AM	#11 (permalink)
CivicsRdBest Member Join Date: Jun 2005 Age: 23 Posts: 98 iTrader: 0 / 0%	From a dealer's point of view, they're in it to make money. The more money they get the happier they are. They try to get the most out of everything, or whatever they can get from anything. Do not mention the method of payment until after you negotiate a price. If the dealer is persistant, just mention you might finance through them if the number is better than some imaginary but high number. Be very vague about your payment plans, like mentioned, untill after you get a final price that you're happy with. If they can't get you with the price of the vehicle, they'll try to get you with the other things, so make sure that you negotiate one and the rest will fall into place. Do not fall under the impression that you're required to buy the vehicle or that you're stuck with it because the dealer had to talk with his manager before showing you the final price or becuase you've spent so much time at the dealership. Make the dealer think that he or she is the one wasting his or her time by not being straight-forward. The best way to do this is by getting up and walking out. If you do walk out though, don't come back unless the dealer starts talking again about lowering the price. Do remember that the are people selling cars. They're not machines giving away cars. They need to make a profit to stay running. Factor that in when calculating the price of the car you want. They also have feelings and no matter how bad they can get sometimes, they've got feelings that should be considered too.

01-27-2006, 08:55 AM	#13 (permalink)
zadscmc Junior Member Join Date: Jan 2006 Age: 49 Posts: 26 iTrader: 0 / 0%	It will only lower your credit score (marginally) for others looking at it after that inquiry. In fact, when the dealer looked up my credit, the inquiry from eLoan didn't even show up. ELoan produced a loan that was 3.25 percent, so I jumped on it. Even if I had cash, I would've taken that loan, because I can get the same rate, or better, by putting the money into an interest bearing account. The net result is a three year loan, paid off on time, in good standing, that far increasing my credit rating then the points left for the inquiry. The credit score is to be used just for these types of purchases. And if there are many inquiries into your credit report, that is where they bash you for the points. Also, you can now look at your credit report, once a year, for free, from each of the big three reporting agency. My suggestion is that you pull one from each reporter every four months (this report is NOT indicated on the report), just so you know exactly what is on and not on your report. The link to the site for the free credit report is: https://www.annualcreditreport.com/cra/index.jsp Good luck.

01-27-2006, 11:47 AM	#14 (permalink)
*Jrfish007* STIG: a tamed race driver Join Date: Sep 2005 Age: 28 Posts: 1,631 iTrader: 1 / 100%	Yeah..... I wouldn't pay up front for a car totally. Infact I purposefully traded in a car that I owed on, tranfered the negative equity to the '06 civic. The finacing I got was 3.5%, which my intrest on my mutual funds is at 7.5% So by leaving the money in my mutual account, I am still making a net profit of 4% on the money I "could" have spent, if that makes sense. Also, by being able to pay a loan that is worth more than the car is worth (which the loan is now around 12,000, which is less than the car is worth; so now the car is worht more than what I owe on it), my credit report is now about 790, I'm really tring to figure out how to get into the 800's, then the bank will give me a 4 years intrest free mortgage when I buy a house... I need a house soon lol

01-27-2006, 11:51 AM	#15 (permalink)
*Jrfish007* STIG: a tamed race driver Join Date: Sep 2005 Age: 28 Posts: 1,631 iTrader: 1 / 100%	What I did was bargian around, then say what if I pay the car up front fully, they said they would take $500 off, I said, I'll finace it at that price then. The car manager was not happy, but oh well. But yeah dealers like all the money up front because they are means they get all their money up front for the sale, they don't have to wait around for the banks and all that and you to make payments.

01-27-2006, 01:08 PM	#16 (permalink)
jandree22 Senior Member Join Date: Nov 2005 Location: Hershey, PA Age: 25 Posts: 330 iTrader: 0 / 0%	You know what I hate, is when dealers try to talk to you not about what the price of the vehicle will be, but about how much you're looking to spend on your monthly payments. This happened to me a few times already and it's really a sneaky way that they can screw you on. If you're able to simply set a hard price on what the vehicle and only the vehicle will cost, you can make a much more educated and powerful decision on what's in your best interest.