How large is the bargaining power of "cash buying"?

There isn't any 'bargaining power' for cash. New car dealers would really prefer for you to finance the car; in many cases they make more money from the financing side of the transaction than they do from the margin on the sale of the vehicle.

Unless the dealer gets a benefit from doing the finance, they get paid either way, which is all they want. Just tell them you don't need finance and have no trade-in. Some dealers might be leary of a customer literally walking in with a bag of cash.

SD

No additional power.

The additional power is in letting them think they're going to finance the deal. They get a commission for selling the financing. If they know they won't be selling any financing, they'll try to make that up by keeping the price of the car higher.

I would recommend that you do not mention how you intend to pay for the car until after the price is negotiated. Dealerships can make additional money by arranging financing or leasing for the buyer and selling extended service contracts, in addition to selling dealer installed accessories like pin stripes, paint and interior protection, etc.

I am alway quiet about my plan to pay cash for a car. But when I was buying my Honda the salesman guessed it. I don't think it really makes a difference one way or the other. Each part of the dealership is a profit center and they all know how much money they need to make from a transaction.

Thank you for your comments. I now understand that I better not tell the dealership that I am buying in cash.

I'm not in a hurry at all, so I will take time using email and telephone exclusively until the last moment of agreeing to a deal. I don't need to test-dirve them. I know they are good vehicles. That way, I can easily "walk out of" their court. (Hope I can work it out this way, though.)

Thanks again.

Cash is not an advantage in most cases and may be a disadvantage. Most dealers will make most of their money on add-ons and financing that the finance person will try to work into the deal once you are "in the box," meaning you have signed a buyer's order and have been turned over to the finance people. At that point you have agreed on the price of the car and they try to work you for the real profit.

I would let them assume that you will be financing and negotiate the best deal that you can then when you get in the "box" tell the finance manager that you want to pay cash and actually write a check for the price you want to pay, plus the taxes and title fee. Explain that he can either take it or leave it and that you have 20 minutes before you walk out the door with or without a car. Be prepared to walk. They will call you back if you do. It is almost a certainty, particularly if it is near the end of the month.

Leonard

As others said, an offer of cash may not help if the salesdroid really wants to sell you a loan. OTOH it's possible they need to meet a quota by the end of a sales period. Then they may accept anything reasonable with good grace. Even a cash sale is a sale.

Try to minimise the hassle you could be thought of as causing -- present your conditions politely and concisely, then be ready to smile nicely as you walk out of there, taking business with you. If they don't want cash, you may as well find out quickly.

And watch out for sales BS, as when your salesdroid says he/she needs to huddle with some superior, to learn if they can adjust the usual deal especially for you.

Etc...

Ummm, test drive one anyhow. Make sure the car is a proper fit for you. We've had a number of people here in the newsgroup who bought a car without an extensive test drive come to find the seat wasn't made for their ass, the ergonomics didn't fit them, etc...

A car may be good for many people, but due to differences in body height, weight, width, back problems, etc... may not be good for you.

I have found that I can get better deals with small town dealers than big city dealers. Also buy during the model change over period - in August I have even got some of the dealer's 3% hold back.

When living in Minneapolis there was a dealer in Sioux Falls SD who sold into the Mpls market at much better prices than the local dealers

- he would deliver the cars to a vacant lot on the south side of mpls. I got an equivalent deal in a town 60 miles away.

The big city dealers have always tried to add crap you do not want or need like fabric protection for $300, undercoating and paint protection. One crook in Mpls had a $500 Special Value Package which consisted of a few oil changes which was added on to every car's price.

you always have room to bargain when youre paying cash. makes things much easier, too... no dicking around with interest rates, tradeins, money down, etc.

youd probably get a better deal on a last generation camry, if there are some out there. the new ones rolling out right now, so no deals there.

the biggest and most shameless ripoff is the line marked:

"additional dealer markup"

With financing options at zero percent (Toyota) around here, I don't know why you would not consider using their money and not tie up your own. Use your cash assets to either pay off creditors or invest in your favorite financial vehicle. A new car paid for by cash usually can't generate a dime in interest paid to you, or build equity assets for building your net worth. If you choose a zero percent deal, finance all you can, remember you are using their money and if you want to, you have the option to pay it off with no penalty anytime within the term of the loan. IMHO.

snipped-for-privacy@gmail.com wrote:

God! that really is shameless isn't it, I've never seen that...they don't even bother to think up a plausable name for it?, jeez...

Additional dealer markup is included in almost any car I've looked at in the past few years. I always subtract that from the price first and then make further substractions along the way.

Then you can be sure the total price is way above normal

If you do have cash you have always the option of offering lover price and most of the time you get it - cash in hand is always cash

Problem is dealers are always dealers and you have to count your fingers after shaking their hand

Best is use the japanese style and not shake their hands

Zero percent is often times a bad deal. Most buyers don't qualify (you have to have extremely excellent credit, normally) and often the terms are short (two or three years).

But, you should never dismiss it out of hand. You CAN find some great deals with zero percent financing. Just make sure it works in your case.

Most of the time it won't, occassionally it will, esp. if it is the end of the model year and the dealers are scrambling to get the old model off the lot. There are very few "always" in car deals.

None, the dealer either get paid by you or a finance source. The dealer earns a portion of the interest, as well, if you use one of his finance sources. The thing that will influence the drive home price for you is whether you have a trade or not. When a trade is involve the dealer must consider its value when it is actually sold. Dealers consider 60 to 90 days, on average, before a vehicle will be sold. When there is no trade he knows he will have money to pay off the manufactures invoice and what the net profit will be the day you buy the new car, not 60 to 90 days later. If you have a late model trade he most likely will not even get enough money in total to pay off the manufactures invoice let alone his sales costs.

Are you in the US? If I were you I would shop around a bit more, 22K is a lot of money to drive home a 4cy car, you cold drive home a V8 for that kind of money. There are many good nicely equipped V6s on the market that can be driven home for less than 20K and 4cy for around 16K

mike hunt

snipped-for-privacy@mailcity.com wrote:

Accent stripes used to be one. I bought my used pickup from a dealer, at the closing they tacked on 47 dollar for "docking fees". I would have walked out but my renter was the salesman and they would have just taken it out of his commission. They were good renters and I didn't say anything. The dealer went out of business a few months later. They (the pressure guys the salesman has to turn you over to at closing) also tried to sell me an extended warranty I kept turning it down and they kept lowering the price on the extended warranty. They finally shook their heads and said it was the lowest they had ever gone on an extended warranty, I still didn't buy it. All in all it's been a good pickup, paid to much but some of the best deals I've gotten on used vehicles I paid to much, but they turned out to be excellent vehicles. The last car I bought I didn't have to worry about keeping a renter happy and told the salesman when we settled on a price that if if they raised the price by one dollar I was walking out. They didn't and I'm still driving the car. I don't mind paying the dealer what a car is worth, they have to make a profit if they are to stay in business, but I don't like the games they play to get extra money. Fair is fair. I try to deal locally mainly because I don't care to drive around the state looking for a bargain. To the dealer a car is just a unit, he has a certain amount in it, and needs to make a certain amount, if he has to much in it then chances are you will wind up paying more then another dealer will sell you the equivalent vehicle for. I guess one thing is to not wait until you have to have a car before buying one. Keep the ball in your court.