Best Way to Purchase A Vehicle? Cash/Finance?

Question

I am looking into purchasing a new vehicle [Ford] soon. It's an 06 model so the price is already pretty low right now, but here is my question:

My brother seems to think it's always best to deal with cash and for the most part, I agree.

But in this case... If the vehicle is 12,995 in the paper and I have about $8,000 to put down should I really put it down all at once, or should I make the dealer think that I plan on financing with them and then apply it to principal on my first payment? (I plan on paying it off ASAP, less than a year) My thinking is that if the dealership thinks they are going to make money off of me on financing, they may go easy on the bottom line price instead of jacking it up and telling me that they are all out of the 12,995's but they have one for $18k or so. Is this logical or am I way off base? I dont really know the technical aspect of how they work, except that they will try to get as much money as possible out of me, but I want to pay the least.

Answer 1

Here is the bottom line on this subject:
If you have good credit and you are not rich. You might finance the car since rates are low now. Unless you have plenty of $, why tie up your savings in an automobile.
Secondly, don't mention finance until you have settled on the price of the car, you should always leave the salesman with the possibility of finance. If he or she asks, say that it is a real possibility that you will finance thru them. You should finance thru your bank or credit union and get pre approved for a car.

Answer 2

First of all, if the car was advertised, it has to be in stock (part of the VIN# is listed in th ad) or it's fraud and they will be fined and prosecuted. Numerous dealers around here have been shut down for weekends and heavily fined for such a thing.

Secondly, if you want to finance, get pre-approved from your bank, credit union or online lenders such as Capital One or E-loan.

Thirdly, go to the dealer and try to find the advertised vehicle. Usually the last six digits of the VIN# is printed in the ad. Even if they already sold it, they may offer a similar car at the same deal.
This happened once to me.... the advertised vehicle was sold prior to my arriving so they offered a similar vehicle at a lower price.

Lastly, pay the dealer with the pre-approved blank check you got from the bank, credit union or online lender. The finance manager will most likely offer to beat the rate you got from the bank.

If you decide to finance with the dealer, BE VERY VERY CAREFUL. This is when they pull the most scams. The most popular scam is one where they claim that if you buy aftermarket stuff such as extended warranty/LoJack/alarm/paint protectant/etc. that your payment will only be $20 more per month. That's never true. The difference is really like $80 or more. Best way to deal with this is to say "NO I DON'T WANT IT." But if you do want it, ask them to print out two contracts (one with the aftermarket and one without) so you can compare. They won't do it because they know you caught them in a lie.

Another scam is where they claim that online lenders such as Capital One and E-loan do not pay on time so they don't accept it. That's a LIE. They're just trying to get you to finance with them at a higher rate. Either walk out or have them beat the rate. But beware that if they try this scam on you that they will try more scams in the financing office.

Answer 3

Fincance is great for some people not for others. If something happens do you really want to clear out your bank account for a vehicle. Also look at it this way you get a good loan lets say 5.49% you do just part of that $4000 down lets say tax title tags makes your vehicle totall 14000 so that makes it 10000 dollars owed. It gives you a 190.10 a month payment for 5 years. You can pay extra every month and bring it way down. So think about it do you reall want to put all of your money down on your car. I have no problem I am currently on my 6th or 7th car i lost track but financing is good if you get a good rate and you are responsible to pay your payments.

Answer 4

Finance it for 1 year and keep your 8000$. Either way you will end up financing it for a little amount but you lose your 8000$. You should especially do that if they offer you a financement for 3.5% or less. But on the other hand if you still prefer having a little amount to pay they will try to raise the financing amount so they could get something of you! This may climb to over 8%. The decision up to you.

Answer 5

Don't mention anything about the $8,000 first of all. When they ask if you've got a trade-in or if you're gonna finance, tell them no on the trade in and you're not sure about the finance yet.

what you wanna do is get that price down from 12,995 when the price is rock bottom then drop it on him like a bomb shell. "ok, what are my payments if I put $8,000 cash down now???"

Answer 6

Doctors, Lawyers, Preachers, Politicians, Car Salesmen, and Rattlesnakes are all from the same source. Well.........maybe I'm giving rattlesnakes a bad reputation. There is no way to outsmart a car dealer. They practice their trade 24/7 and you are doing this just once. You do the math, who has the best odds of winning?

Answer 7

Buy an $8000 car. You could get a pretty decent car for that amount. The rest you would have spent on a car payment, you could use towards retirement, travel, dining out etc.
Avoid the car payment if you can.

Answer 8

Depends on interest rate on some ford's the offer 0 down and 0 APR. so you can tell them you want to finace when 1st payment is due send them the cash.

Answer 9

Do you have a bank account ?
Go talk to your banker, they can advise you much better.

Answer 10

If you can pay cash, it gives you bargaining power.