If I can pay for a brand new car in cash, will the dealership lower the price?

Question

If I have the money to buy a brand new 2007 Toyota Prius outright IN CASH upfront--will the dealer give me a few thousand dollars off?

The sticker price is about $22,000, so if I can pay that upfront, will he give me a better deal AND what other perks could I get for paying for in cash??

Should I tell him I can pay for it in cash??

Thanks!

Answer 1

Make the best deal you possibly can, then when you are done negotiating, and he starts talking about options to finance, tell him you had cash in mind, and ask what more he can do for you if you pay cash.

Answer 2

Cash doesn't matter.

In fact, they prefer financing as they'll try to stick you with a higher interest rate though financing companies (which they'll get a kickback from).

The only place where they'd prefer cash is at "Bob's Used Cars" or the likes.

Here's some buying tips.

1. Never trade your current vehicle in, sell it yourself.

2. Always try to pay as close as possible to "invoice price" (what the dealer pays for the car from Honda, Toyota, etc).

3. Always shop for a car at a dealer at the end of the month- I'm talking the last 1-3 days. Not only does each salesman have a quota of cars he needs to sell each month, but so does the entire dealership. They will be much more willing to drop prices close to invoice for the sale.

4. Go to autotrader.com and email all the Honda/Toyota/etc. dealers within 75-100 miles and ask them for their bottom line price on the model and trim level you want.

5. Take the best price you're quoted in email and call the other dealers and ask them if they'll beat that price by a margin big enough to make it worth your while. A good number is an addtional $300-500. Remember that your goal is to pay what the dealer paid for the car, INVOICE PRICE. Generally, the bigger the lot (more cars in stock) the better the deal as they sell more units (volume) and don't rely on profit (margins) nearly as much. Sometimes they'll even take a slight loss and sell for less than invoice just to move a unit or steal a sale from another dealership. Play the lots against one another.

6. Remember that you're in control. They'll try to bully you, say they can't get the price any lower, stall, run back and forth to the manager, etc. It's all just a show. They know exactly what they can sell the car for.

Invoice of the Toyota Prius:
http://autos.yahoo.com/toyota_prius/

Answer 3

You can negotiate the best price possible, and pay for the car by whatever means you wish.

Do the dealers lower the price more because it is a cash payment? NO.

Very often the dealers have incentives to finance and/or lease the vehicle, and so does the sales representative. Yes, that means they can actually get some money back as incentive to arrange financing..

The sale staff may get a direct payment for each sale, and a bonus if a certain number are sold, while the dealership incentive often is an indirect payment in the form of reduced interest on the vehicles the dealer has in stock. The dealer gets benefits based on how many finance deals are sold in a period of time, not just for a single vehicle.

When I was with a General Motors dealership, both incentives applied.

Answer 4

First try to negotiate the price as low as you can WITHOUT letting the dealer know how you're going to pay. Then when you have that all worked out tell him that you'd like to pay a couple thousand less since you'll be paying in cash. He'll definitely lower the price a little bit for you. Cash is a sure thing for a dealer, and I'm sure he'll be happy to lower it a little bit more if that means selling a car and receiving all of the money up front.

A little tip though when buying a car. Never compromise with a dealer. If you think you can get a better deal somewhere else, you probably can. If he's not making you happy, just walk away. They'll generally bend over backwards once they see you walk out that door.

Good luck.

Answer 5

Cash customers are NOT the preferred buyers and will not see a significant price advantage compared to a customer with good credit. We prefer a good creit score to a cash customer all day. Why? Well a cash customer is less likley to buy warranties, maintenance packages, LoJack, etc, We get profit from all of those things. We also get profit from the bank contract itself. When you pay cash, you are effectively shutting down several opportunities for a dealer to make profit. This thinking goes back to the old days when banks took weeks, sometimes months, to fund a deal. We would send in a contract then have to wait for the bank to cut a check and send it to us. Back then, cash spoke loudly. Today, a customer with a strong credit score can finance a car, ans we get our money within a couple of days. Sometimes its a matter of hours. So the old myth of cash making our eyes light up like a cartoon character are over.

Answer 6

I was a car salesman till Oct. last yr. The best way to buy is talk price and only price. Make the dealer get you the car at x Plan price. If he does not go to another dealer. One will. that x plane is about $100 dollars under invoice. Understand that they will tell you invoice is there cost. That is a lie. there is a %2 under hold back is there true cost. So hold out for invoice or some under invoice. Go to the factory web site and it will tell you the invoice price. Or go to Edmond.com and it will tell you all about the car and prices. Dealers hate www.edmonds.com
Once you have agreed on invoice price then tell him you are paying Cash. The reason they will not do as good of deal for cash is because they make money on the loans they get for you. So does the sale mans. Understand the salesman will makes a base per car and 20% of enything they sell you the car over invoice and 5% on the loan and all the things like gap or extended warrinty. Dont buy eny of them. It is a waste of money. If you finaccaced the car then gap is good. And you dont have to buy enything in finance. And you can walk away from the deal up till you drive it off the lot. Till then the car is theres. Once you drive it off the lot then it is yours.
One thing else ASk what interest you can get. If you can get 0% then do that and save your money. If there are eny insentives like extra money to finance to though them then do it for 2 months then pay the loan off. there is no penalty s to pay a car loan off early. So ask the right queston and check the factory web page and it will pay off the reach first. Good luck.

Answer 7

Most deals are cash to the dealer anyway. Most people get a loan thru some kind of bank or finance company, the dealer does not do the financing. I sold cars for some time and most every dealer will take $500 over their invoice. Ask to see the invoice on the vehicle and offer them that price plus the 500 should be a deal.

Answer 8

I would not tell them I have cash in hand until you are getting ready to close in on the sale, then I would simply say that I have a lump sum (unspecified amount) that I am working with and see what discounts he pulls out of the air at that time. I have always put at least half down when buying a car, and believe me if you just do that much they bargain with you so I could only imagine what you would get if you pay it off before driving it off the lot. Just be mindful of what kind of person the salesman is and always remember they work on commission!

Answer 9

My mother-in-law was able to talk a couple throusand dollars off of a car she bought, and she wasn't even paying in cash. She was making payments on it as well. Usually, they're willing to listen to what kind of deal YOU want to make as well. Also, when someone is wanting to pay it all off at once and upfront, that's one less thing they'll have to worry about. So, most likely, you'll be able to negotiate your price.

Answer 10

Definitely tell them. Negotiate your price carefully. NEVER EVER pay sticker. Only foolish people do, as most dealers have several thousand dollars of leeway on prices. When they stop lowering the price, start bargaining for free options. You may be surprised how much you can get thrown in.