CAR BUYING POWER when NEGOTIATING PRICE (Cash or Check or Finance)

[BrooklynRacer]

I was told and read many places that when buying a car, you have more power when you are paying with cash. Also others who bought cars told me that they were more successful at working the price down by saying "I will pay you in cash right now if you accept my offer of $x,xxx..." Does this mean i have to walk into a dealership with thousands of dollars in cash on me when i am ready to negotiate. Cause as i am sure all of you can understand, i feel uncomfortable walking around with all that money on me and i feel funny walking into a bank withdrawing like 10,000 in cash.

When they say Cash, does that mean check also? or when they say Cash, does that only mean bills.

[Chad82]

cash = cash, check, credit card, debit card, cashier check, money order, travelers checks, etc.

[harrymay]

what ive seen done, what i was going to do. get a loan from your bank or any other bank. go to the dealership and tell them, this is how much i have. usually the bank will give you a blank check in your name to make the purchase. then you just write the check to what the price is

[fredjacksonsan]

Originally Posted by harrymay

what ive seen done, what i was going to do. get a loan from your bank or any other bank. go to the dealership and tell them, this is how much i have. usually the bank will give you a blank check in your name to make the purchase. then you just write the check to what the price is

Exactly. And when you have your own financing, the only thing to negotiate is the price. If you've got your research done, just be ready to walk out. It's amazing what they will do to get you back in the door. Don't let them wear you down, and you should be able to get the vehicle you want at the price you want.

[Hofmeister]

One of the best tips I can suggest to you in order to get the best deal is to go to the dealer in the 2nd half of the month, show some interest, test drive a car, and get a credit check done. Don't buy anything but show that you're serious. Close to the end of the month come back and see the salesperson. Remind him/her that you passed the credit check, you've driven the car and now you mean business. A salesperson doesn't care if you buy, lease or pay cash. In fact, dealers make more money if you lease a car because they can sell you additional insurance (such as GAP insurance) through their F&I office.

All they want to know is that your serious and if you're walking around with cash they assume your serious. Anyway, as long as the sales person knows you'll qualify to buy the car, and that you're ready to deal, they'll negotiate a better deal for a quick sale in order to squeeze you into their monthly quota.

It works.

[curtis73]

Originally Posted by Hofmeister

A salesperson doesn't care if you buy, lease or pay cash..

Boy I cared. Financing makes more total profit for the dealer, which means more commission in my pocket. I liked finance deals. Finance deals were also a great way to weasle serious money out of a customer. Easily 80% of my customers came in, looked at cars in their "sticker price range" and drove that level of car. Once inside we slapped them with a $950 a month offer they would darn near punch me. So we dickered down until we got them into a monthly payment that they could afford. ALL THEY CARED ABOUT WAS THE MONTHLY PAYMENT. They never cared that it was a 60 month term at 13% interest. If they had a calculator and mulitplied their monthly by the term length they would see that in some cases they were actually paying 50% more than what the car was worth. We actually had to re-do a couple deals with lower payments because we were making more money than the law allowed. Nothing like taking home a $600 paycheck on a $279 a month purchase of a $3000 escort. I got out of it because I thought the way that particular dealership did business was shady. There is nothing wrong with mattress shoppers (we call them that because they just lay down for your price). Its a buyer-beware world, but too many illiterate or undereducated folks from that low-income area were screwed royally so I hit the highway.

Cash deals were fine because they weren't messy and you know the car wasn't coming back on a tow truck, but they didn't line my pockets quite as well.

Having said that, I wouldn't turn down a sale for even zero profit because it put a notch on my sales bedpost and there were bonuses for selling so many units. We who were more experienced also let the new guys handle anyone who came in the door with cash or a title. We knew they weren't ready to buy. Its the ones who "conveniently forget" their title, trade, or cash who are the ones actually looking to buy. They want an excuse to get out the door and not look too anxious to buy. I never (and I mean never) sold a car to a trust fund kid with cash, anyone with their checkbook in their back pocket, or anyone with their trade and title. I did sell a ton of cars to people who were "just looking." We sales people are trying to draw a sale out of you. If you walk in with a title and $1000, that's not work. You're already laying down for us. We know we don't have to go very far to meet you in the middle. Its the jeans-wearing window shopper that makes us work. Pose as a shopper with questions about the new suchandsuch auto. You just stopped in to take a look at them, or you saw a commercial and they looked nice. If you appear to be a serious buyer, I wouldn't work very hard to get you a decent price. I know you need what I have. But selling a car to a window shopper is like selling ice cubes to Inuits.

[curtis73]

Oh, and I agree with Hofmeister. Last week of the month, last day of the week (fri or sat), and go in a half-hour before close. Trust me, we don't mind sticking around to make money, but it will rush things a bit. Its our job to get you to buy as quickly as possible before your better judgement shows up. But we're thrown for a loop if you create a situation where we have to move faster than normal. Play us at our own game. You'll never control the situation if you try to slow us down, but we're screwed if you make us go faster. But don't look like you want to move faster. Coming in late you can blame the closing time on why its fast.

[curtis73]

Oh, and I agree with Hofmeister. Last week of the month, last day of the week (fri or sat), and go in a half-hour before close. Trust me, we don't mind sticking around to make money, but it will rush things a bit. Its our job to get you to buy as quickly as possible before your better judgement shows up. But we're thrown for a loop if you create a situation where we have to move faster than normal. Play us at our own game. You'll never control the situation if you try to slow us down, but we're screwed if you make us go faster. But don't look like you want to move faster. Coming in late you can blame the closing time on why its fast.

[Hofmeister]

I'm surprised that you would get more commission for financing. I've sold cars for a while and it didn't matter how they paid. Sure, the dealer makes more money on leasing and financing, but as a salesperson I made my commission on the profit of the vehicle, not the profit generated by the F&I office.

Anway, I don't sell anymore but I never once turned down a sale from anyone, even kids with Dad's check book. The only thing we wouldn't accept is people trying tho buy a car on their credit card. Yep, it happens but most credit card companies get 3% of any transaction so it would wipe away any profit. We'd only take deposits on a card.

[Chad82]

Buying cars on credit card is a great way to get 0% financing

[mikeyL]

i think when people say it is easier to negotiate when you have cash they are referring to private sales more so. When someone is selling their car often times they are very anxious to sell it and when you have the cash on hand they know you are not messing around. they want that paper

[frankpantangeli]

"We who were more experienced also let the new guys handle anyone who came in the door with cash or a title. We knew they weren't ready to buy. Its the ones who "conveniently forget" their title, trade, or cash who are the ones actually looking to buy. They want an excuse to get out the door and not look too anxious to buy. I never (and I mean never) sold a car to a trust fund kid with cash, anyone with their checkbook in their back pocket, or anyone with their trade and title. I did sell a ton of cars to people who were "just looking." We sales people are trying to draw a sale out of you."

You forgot add those old guys that would roll up to the front door in their F-150's with those camper covers on the back, ducks in the windows and running boards down the sides. They would step out and look at the salesmen and say "which one of you guys wants to sell a car today" those old bastards were the biggest strokes ever to walk the earth. I would always take off when I seen one pull in. The trust fund kids were always classic. They always had a stroke buddy with them that was the smart ass and lets not forget the backwards baseball hats they wore. Then there were the clipboard consumer report subaru/saab/volvo buyers that knew they were getting another subaru/saab/volvo but would stroke around all the other makes just so they could sleep at night knowing the tested everthing that consumer reports told them to. Lets also not leave out the jackass that would walk up to all the sales men and start open with "you guys look like a bunch of sharks here". I would always tell them off. I will not to get into race here but some were more of a waste of time to deal with then others. You would spend half the day with the grinding you for a min commision. I just wouldn't work with them. Now some of the bigest deals I made were on guys that din't look like they had nickles to rub together and they would wonder the lot while no one would up them. I would come around from the back and act like just got in and sometimes you would hit a score cause they want to show everyone how they screwed up by ignoring them. I had this one guy that looked like he was homeless turned out he owend scrap metal yard and he bought 4 trucks from me that day. I know there are many more I just been out of it too long to remeber them all. 16 years I don't miss it at all.

[exsalesman]

To a Dealership it is all cash. When you finance the dealership recieves the funds from the lending institutions in a matter of days. The dealership prefers you finance because they then have a better opportunity to make profit on the backend.
As far as waiting to the end of the month thats a total myth. A dealership wants to and needs to sell cars daily. The amount of overhead is staggering. Dont forget most dealerships do not own their inventory ,it is being financed through a floorplan. For this reason alone the dealership is motivated to move rides.
And dont go into a dealership with $10,000 dollars cash unless you want uncle sam to visit you. Use a check,money order or something to that affect

[Drive and Carer]

I have this conversation over the phone 3 or 4 times per week at my dealership:

Customer: "What's your cash price?"

Me: "Oh, I'll be happy to get you a cash price, but before I do that, are you sure you wouldn't want to finance?"

C: "I'm sure. I'm going to write you a check."

M: "Very good, sir/ma'am. I'll price it for cash. But if you would consider financing, I can get you a better deal."

(short silence)

C: "What do you mean?"

M: "Well sir/ma'am, paying cash actually reduces our profit. The finance company pays the dealership a small commission for sending business their way. On a cash deal, we have to make all of our money on the selling price of the car because we know we won't make anything from the finance company."




After the little fun, I will try to give them a little of their self respect back by saying that it probably won't make an actual difference (which it doesn't) in the cost of the vehicle. I would then ask if they would consider financing if the rate was low enough. I can recall 2 people who said no to this one, and in both cases it was someone elderly who absolutely didn't want debt obligations.






In all seriousness, the best tools a customer has when buying a vehicle are:

1) Honesty. Just because car dealers have a reputation for lies doesn't mean you have to stoop to our level. Don't hide your trade. Don't pretend that you haven't shopped anywhere else (or that you have when you haven't). Come in and tell the dealership everything. As long as you keep control of the car deal, none of the information you give them can be used to force you to sign on the dotted line.

2) Knowledge. If you are buying a new vehicle that isn't "hot", you should never step foot into a dealership until you've built one on the manufacturer's website to your specs, then sent these specs to a minimum of 5 local dealerships for quotes.

For used cars, visit
autotrader and
cars.com and diligently research the current market values on every vehicle in a 100+ mile radius that is similiar to the one you're considering.

3) Courtesy. Regardless of how you are treated, you should always be courteous and respectfully. Just like salespeople are taught to be likeable and build a rapport with customers, so to should the customers be likeable and build a rapport. If the salesperson WANTS you to be in their vehicle and to be their customer because they like you, they will work harder for you. Conversely, I have seen many occasions where the salesperson tells the manager that they don't want to budge because the customer is a &^#%(@.

4) Leaveability. It's not a word, but it should be. Unless they know without a doubt based upon their research that their deal is great, they have to be willing to do 2 things: walk away and possibly lose the vehicle.

They have to be able to walk away because that is when the pants are dropped. Some managers/salespeople will drop their price on your way out. Others will knock off a little more the next day. If they call later that day or the next, ask them if there is any money to be cut. If they don't call, call them 48 hours after leaving. Them not calling could be poor followup, but give them a chance.



One thing to remember: Buy from who you like and trust, especially on new cars. If jerk dealership "A" beats nice dealership "B" by $200, buy it from "B". It's a car. It probably cost you $25k or more. $200 on a 60 month note is less than $4 per month. If dealing with jerks is worth saving $1 per week, then you don't know what getting the best deal is really all about.

Hope it helps.

[frankpantangeli]

"As far as waiting to the end of the month thats a total myth. A dealership wants to and needs to sell cars daily"

While that is true for the most part there is also a reason why end of the month deals are better for buyers. Most sales people and managers are going for bonus money that is based on units sold for the day or month. Since most of these people are not the store owners they will make deals at the end of the month that may put them into the bonus money or up a level depending on what type of bonus money the dealer offers. In my experience I seen customers get better deals not only at the end of the month but also on Saturdays nights when there were cash spiffs put up to get more sales. We would make a crazy deal to get the cash then worry about it later.