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2
Posted on 7/8/12 at 9:03 am to EastTxTiger
Agree with Foshizzel on this one. Here is my wife and my last experience.
In 2011 we bought a new car for the first time in a long time. Long story but I’ll stick to the financing side.
We didn’t tell them we wanted to pay in cash until we agreed on a price. At that time we said we wanted to put the entire purchase on a credit card. We have with a high enough limit on it to cover the purchase. They agreed. We had the cash to pay off the credit card in full when they bill came. We wanted the 2% cash back we get from the credit card. When it came time to swipe the card they told us that we could only put 5% of the purchase price on the card. We walked away. After a short time they contacted us and said they would give us 1% financing. We weren’t happy but decided to get the car because it was a good price on a car that had what my wife wanted and didn’t have what she didn’t want. We used the credit card for the 5% down which we paid off as soon as the bill arrives. I took half of the rest of the money we had in a money market account that we had used to save for the car and put it in Vanguard Wellesley mutual fund. From July of last year to June of this year it is up about 10%.
The bottom line, so far at least, is that low financing worked better for me than cash.
In 2011 we bought a new car for the first time in a long time. Long story but I’ll stick to the financing side.
We didn’t tell them we wanted to pay in cash until we agreed on a price. At that time we said we wanted to put the entire purchase on a credit card. We have with a high enough limit on it to cover the purchase. They agreed. We had the cash to pay off the credit card in full when they bill came. We wanted the 2% cash back we get from the credit card. When it came time to swipe the card they told us that we could only put 5% of the purchase price on the card. We walked away. After a short time they contacted us and said they would give us 1% financing. We weren’t happy but decided to get the car because it was a good price on a car that had what my wife wanted and didn’t have what she didn’t want. We used the credit card for the 5% down which we paid off as soon as the bill arrives. I took half of the rest of the money we had in a money market account that we had used to save for the car and put it in Vanguard Wellesley mutual fund. From July of last year to June of this year it is up about 10%.
The bottom line, so far at least, is that low financing worked better for me than cash.
Posted on 7/8/12 at 9:10 am to EastTxTiger
Like it was mentioned above, you sometimes get a worse deal by paying cash. They make money off financing and might not give the best selling price if you pay cash. My advice is to keep that information in your pocket while negotiating price. Drop the cash bomb on them after finalizing price.
Back 20 years ago cash was king. You would get a better deal because they got the money immediately instead of having to wait a few days to get the deal funded. Now with ACH transfers at the speed of light, they would rather finance it.
There is nothing wrong with building some credit, but you have to do the math to determine what is financially best. Paying a huge downpayment and financing the rest (usually a min of $7500 for car loan) would be a good idea if you got a great rate such as 3.99% or lower.
Best of luck!!
Back 20 years ago cash was king. You would get a better deal because they got the money immediately instead of having to wait a few days to get the deal funded. Now with ACH transfers at the speed of light, they would rather finance it.
There is nothing wrong with building some credit, but you have to do the math to determine what is financially best. Paying a huge downpayment and financing the rest (usually a min of $7500 for car loan) would be a good idea if you got a great rate such as 3.99% or lower.
Best of luck!!
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