Price off for paying full in cash? - Page 3 - LotusTalk - The Lotus Cars Community
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post #41 of 83 (permalink) Old 10-08-2007, 11:46 PM
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I haven't figured out Lotus yet since I'm yet to work a deal on one (Lotus green pea here), but I deal with this issue all the time with the VW store I work also.

We get a reserve from the banks just by giving them business. It's not a lot, generally speaking a few hundred dollars. Since we work as loan brokers, we can also add %'s to the interest rate, and keep the money there too. The points we can add depend on the bank, but generally speaking it is 1% on subvented offers, and 2.5% on standard rates.

By paying full in cash, you have limited a dealers other sources of income, so against popular belief, you won't get a better selling price. We are generally looking to make $X on a car, so whether it is a combination of a lower selling price but money made in financing, or just a cash deal, the deal you are going to get is generally speaking the deal you are going to get. A $1,000 deal to me could either be $1,000 over what I paid for the car, or $500 over what I paid plus $500 made in financing.

It used to be in the past you could get a lower price if you paid cash, but it has changed. Now both the consumer and the dealer have to look at the total deal to see if it makes sense, and if it looks good on both sides, then both parties are happy.
So, if one was capable of paying cash, would it be best to sign up for financing, then payoff the balance at the first month's payment and both parties will be happy?

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post #42 of 83 (permalink) Old 10-09-2007, 12:36 AM
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So, if one was capable of paying cash, would it be best to sign up for financing, then payoff the balance at the first month's payment and both parties will be happy?
On a cheap car like a VW? Yes. Dealers will see profit in another way, and go for it. Asuming they'll take a deal like that, dealers expect to make money. Pay it off, and you win.

Lotus? Deal with the price of the car since the money made through any other source isn't enough to make a difference. A few hundred dollars on a Lotus shouldn't be the make or break pointe.
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post #43 of 83 (permalink) Old 10-09-2007, 05:12 PM
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I haven't financed a car purchase in 20+ years. I'd rather pay once instead of making monthly payments. Always use your own money first before paying to borrow. I slap $5K on the Visa and a certified cheque upon delivery. If they give me any crap, I get them to phone my bank manager...she likes me and always verifies that the funds are in place. I like clean deals and hate monthly payments with a passion. Dealers have to keep the lights on too. We make a profit on what we sell, so should they , as long as it's reasonable. They make all the money in the shop anyway.
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post #44 of 83 (permalink) Old 10-09-2007, 06:33 PM
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I agree with above statements that dealers prefer you finance. I paid cash for my Elise and somehow ended up paying over sticker, lol. Buying privately gives you more leverage with cash.

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post #45 of 83 (permalink) Old 10-09-2007, 07:06 PM
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PA must be different. This last year I think we have purchased at least 6 new cars all cash and not once did they run our credit.

I don't know maybe I am nuts but I never haggle dealers for prices when paying cash (which is all the time). I know they make some money on financing, plus I feel that dealers need to make a living and I don't begrudge anyone from making a living, If I feel their price is to high I will go somewhere else but, I never expect to pay any less than MSRP but I will not pay more (the biggest reason I never bought a Shelby GT 500). I wouldn't go into Wall Mart and pick up a $20 item and go to the cash register and haggle them down to $15, to me its all relative. But thats just me, again maybe I am nuts.
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post #46 of 83 (permalink) Old 10-09-2007, 09:04 PM
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PA must be different. This last year I think we have purchased at least 6 new cars all cash and not once did they run our credit.

I don't know maybe I am nuts but I never haggle dealers for prices when paying cash (which is all the time). I know they make some money on financing, plus I feel that dealers need to make a living and I don't begrudge anyone from making a living, If I feel their price is to high I will go somewhere else but, I never expect to pay any less than MSRP but I will not pay more (the biggest reason I never bought a Shelby GT 500). I wouldn't go into Wall Mart and pick up a $20 item and go to the cash register and haggle them down to $15, to me its all relative. But thats just me, again maybe I am nuts.

Yeah, you are. Dealers are USUALLY very, very profit-oriented and will rip you off any way possible. Honest dealers are difficult to find. If the deal doesn't work for them, they won't do it usually, so don't sweat.


Sometimes, if they have to move a vehicle, they will sell to you and take a loss, but that benefits them because A) The company loses $$ on it otherwise B) They can sell the new vehicle that replaces it



I can see a few hundred bucks to a dealer you like, though

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post #47 of 83 (permalink) Old 10-10-2007, 02:43 PM
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When i bought mine it seemed like they really wanted me to finance it... (as opposed to paying all outright) like they got a little kickback from the financing...

Either way they let me put $22k on my credit card which was nice for frequent flyer miles!

PS. it really depends on the type of credit check... some types of credit checks don't count against your score.
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post #48 of 83 (permalink) Old 10-10-2007, 02:52 PM
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I wouldn't go into Wall Mart and pick up a $20 item and go to the cash register and haggle them down to $15, to me its all relative. But thats just me, again maybe I am nuts.
No you wouldn't on a small ticket item. But, I've gone, to home depot, osh, and sears, when buying a lot of stuff for a new home, business and condo (3 different occasions) and asked outright for 10% off and all three did it. COmbined savings; over $1,100. You would rather Mr. Osh keep the money?

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post #49 of 83 (permalink) Old 10-10-2007, 03:02 PM
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Like you say it depends, some dealers will run it by a bunch of places, that can be a negative on your score.

Lets face it though credit in the US , is like insurance, anything they can possibly do to make that score worse

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post #50 of 83 (permalink) Old 11-17-2007, 08:48 AM
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I recently paid for a Honda Fit in "cash" (aka personal check). Yes, my wife and I have polar opposite taste in cars.

The dealer told me that if I brought in cold-hard cash, they would not have to run a credit check. Otherwise they need to in order to feel comfortable that my personal check is actually going to clear the bank.
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post #51 of 83 (permalink) Old 11-17-2007, 09:23 AM
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post #52 of 83 (permalink) Old 11-17-2007, 09:34 AM
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Like you say it depends, some dealers will run it by a bunch of places, that can be a negative on your score.

Lets face it though credit in the US , is like insurance, anything they can possibly do to make that score worse
Credit inquiries do not affect your score in that way. The credit bureaus know that if you are shopping for a car, you may go to several dealers and shop around. Therefore, only one credit inquiry is counted within a 14-45 day period (depending on which FICO model is being used), as long as it is for the same industry (an inquiry for an auto AND a mortgage in the same day would count as two inquiries). Shop all you like for two weeks, it will only count as one inquiry for your score.

Also, regarding the related comment earlier in this thread about running a credit bureau to even test drive a car -- As long as the dealer used a "soft inquiry" instead of a "hard inquiry", it would not affect your score. This is the type of inquiry used for credit card "pre approval" solicitations, employer background checks, identity verification, etc.
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post #53 of 83 (permalink) Old 11-17-2007, 09:59 AM
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I didnt want to take the time to read the entire thread;..................
IIRC, if you pay with a credit card it cost the mechant a percentage of the transaction to pay the credit card company. I think its ~%2.0.
therefore it would be logical to expect a %2 discount for paying with a check rather than throwing down the credit card. if the dealership says no. then put it on your CC and pay it off on the next bill cycle.
Also, when something is financed, doesnt the seller recieve the total amount, and the bank (or holder of the lein)recieve the payments. so who really cares how you pay from the sellers point of view.

someone likely knows more about this than I, so please educate me if i am wrong.

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post #54 of 83 (permalink) Old 11-17-2007, 10:28 AM
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Also, when something is financed, doesnt the seller recieve the total amount, and the bank (or holder of the lein)recieve the payments. so who really cares how you pay from the sellers point of view.
The dealer / bank relationship is actually much more complicated than this (particurarily in the subprime market). There can be discount, reserve, participation (prime only) and recourse arrangements, each of which is a discussion in and of itself but ultimately affect the amount of money the dealer receives and how much risk they (the dealer takes) in assuring that the customer makes their payments. These arrangements are made for a variety of reasons, but it boils down to the bank putting an onus on the dealer to send them good paper (deals) and to keep the dealers honest.

Prime is easier because the risk is less but still not quite as straightforward as cut check / send title.
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post #55 of 83 (permalink) Old 11-20-2007, 11:46 AM
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I wrote an $8k personal check (a refundable deposit to hold the car, while I went on vacation). Then a few days later, picked it up and wired over the difference from my bank (wire xfers settle a few days later). Not sure if this was standard, but it was easiest for me Lotus of South Bay didn't mind. Will all dealers do that?

And yes, they did a credit check since I was giving them a personal check and the "promise" of a bank wire xfer

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post #56 of 83 (permalink) Old 03-11-2008, 09:50 AM
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When you guys say cash, you really just mean you pay without financing. Because paying with cash would technically be rolling up to the dealership with 70k in hand. Have any of you done that?
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post #57 of 83 (permalink) Old 03-11-2008, 09:55 AM
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When you guys say cash, you really just mean you pay without financing. Because paying with cash would technically be rolling up to the dealership with 70k in hand. Have any of you done that?
yup. curt at ascot was shocked when i walked in with a rental car full of rolled quarters. they had to call in the bookeeper to assist with counting it up. after a couple of hours i got bored and left to grab some lunch. when i got back all was good and i made the three hour drive back before dark.
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post #58 of 83 (permalink) Old 03-11-2008, 10:07 AM
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I had a gentleman pay for an Esprit (about $55,000) in cash. Simply walked in with a briefcase. that said, Greenwich is a strange place.
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post #59 of 83 (permalink) Old 03-11-2008, 10:32 AM
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I paid a 5-figure deposit in cash ($100s and $20s).

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post #60 of 83 (permalink) Old 03-11-2008, 10:49 AM
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yup. curt at ascot was shocked when i walked in with a rental car full of rolled quarters. they had to call in the bookeeper to assist with counting it up. after a couple of hours i got bored and left to grab some lunch. when i got back all was good and i made the three hour drive back before dark.
Hahah. Awesome! Good story.
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