Paying with Cash
#46
Originally Posted by CK6Speed
Hopefully none of us were talking about maxing out every single credit card to buy a car. I think we were just talking in theory that about the very low fixed rates some credit cards were giving away and discussing if it was worth it. The only draw back I can think of is that it affects your credit score more negatively with revolving credit debt vs secure or non secure loans. Then again though, if one has enough credit to buy a $40K + car on his credit card his credit must be pretty damn good to begin with.
The other reason why I think this talk all started was the debate between paying in cash or financing and which would give you a better deal and if paying cash was worth it or not.
The other reason why I think this talk all started was the debate between paying in cash or financing and which would give you a better deal and if paying cash was worth it or not.
All else equal, I think credit cards are better than cash because you get rewards (points, cashback, miles, etc), and if it gets stolen, you aren't liable for anything the thief buys. With cash, you get no rewards, and if it's stolen, you are out of luck.
I wish I could pay my monthly lease with my credit card. Unfortunately not allowed by Lexus Financial, as far as I know.
#47
Pole Position
I financed my IS250 through my credit union at work, so my Lexus dealer treated my purchace as a cash only deal. My credit union gave me a lower rate than the Lexus dealer could. The only problem was the dealer took almost three weeks before they faxed in the sales contract to the credit union. The credit union told me to not worry, I was covered on the loan and it just delayed getting the payment to the dealer.
When I started dealing on the car I told the salesman upfront that it was a cash deal. This made the dealing much easier than I have experienced before. I did my homework on the dealer and sticker prices of the car and all option packages, so I knew how much wiggle room I could negotiate around. I ended up getting it for a few thousand dollars under the sticker price. I said I wanted to trade my old car in too and I end up getting the trade-in price I wanted (a few hundred above Blue-Book). But when the sales contract was written up the full retail price of the IS was listed and the sticker price discount I had negotiated was added to my (above Blue-Book) trade-price. Either way I paid the same amount of cash to the dealer but the to the dealer they sold the car for full sticker price. The sales manager said they written the sales contract that way to make the monthy sales report look a little better.
When I started dealing on the car I told the salesman upfront that it was a cash deal. This made the dealing much easier than I have experienced before. I did my homework on the dealer and sticker prices of the car and all option packages, so I knew how much wiggle room I could negotiate around. I ended up getting it for a few thousand dollars under the sticker price. I said I wanted to trade my old car in too and I end up getting the trade-in price I wanted (a few hundred above Blue-Book). But when the sales contract was written up the full retail price of the IS was listed and the sticker price discount I had negotiated was added to my (above Blue-Book) trade-price. Either way I paid the same amount of cash to the dealer but the to the dealer they sold the car for full sticker price. The sales manager said they written the sales contract that way to make the monthy sales report look a little better.
#48
Super Moderator
Originally Posted by cmusic
I end up getting the trade-in price I wanted (a few hundred above Blue-Book).
#49
Originally Posted by CK6Speed
..I think we were just talking in theory that about the very low fixed rates some credit cards were giving away and discussing if it was worth it....
but another negative i've thought about is that if the CC company charges you a min. payment of 4% of your balance each month, the first few payments could be fairly substantial
#50
Lexus Champion
Originally Posted by Lexus3oi
i've also considered taking advantage of low "fixed rate" credit card offers...ie. 1.99%
but another negative i've thought about is that if the CC company charges you a min. payment of 4% of your balance each month, the first few payments could be fairly substantial
but another negative i've thought about is that if the CC company charges you a min. payment of 4% of your balance each month, the first few payments could be fairly substantial
#51
GX and 2IS Moderator
Credit card is illegal
Originally Posted by TimboIS
I'm putting mine on credit card, to get the points. Then paying the card off immediately.
Additionally, do you honestly think the dealership is willing to "throw away" the 1-2% that the credit card company will charge them on your deal...doubt it, but good luck trying to get a dealership to go for it.
#52
Lexus Test Driver
iTrader: (27)
Originally Posted by Johnny Mo
Paying for a car on a credit card is illegal. It bypasses the whole credit approval process, regardless of how quickly you are going to pay it off.
Originally Posted by Johnny Mo
Additionally, do you honestly think the dealership is willing to "throw away" the 1-2% that the credit card company will charge them on your deal...doubt it, but good luck trying to get a dealership to go for it.
#53
Super Moderator
Dealerships usually set a maximum amount they can accept as a part of the payment for a car they sell. For example, my Infiniti dealership would only accept $2k as the maximum you can put on your car by CC.
#54
Lexus Champion
iTrader: (1)
Join Date: Oct 2005
Location: Orange County, Ca
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I'm going to try to put $4000 on my credit card when I purchase my new car. Total I'm going to put down is btw 15-18k. I just want some points on my credit card and gonna pay it off immediately.
#55
Lexus Champion
Originally Posted by gsrthomas
I'm going to try to put $4000 on my credit card when I purchase my new car. Total I'm going to put down is btw 15-18k. I just want some points on my credit card and gonna pay it off immediately.
#56
Originally Posted by gsrthomas
I'm going to try to put $4000 on my credit card when I purchase my new car. Total I'm going to put down is btw 15-18k. I just want some points on my credit card and gonna pay it off immediately.
Why???? PLEASE go see a financial advisor before you throw that much $$$ in the toilet by putting it down on a car.
#57
Lexus Champion
Originally Posted by Low J.
Why???? PLEASE go see a financial advisor before you throw that much $$$ in the toilet by putting it down on a car.
#58
Originally Posted by Low J.
Why???? PLEASE go see a financial advisor before you throw that much $$$ in the toilet by putting it down on a car.
#59
The One
iTrader: (3)
Originally Posted by Johnny Mo
Paying for a car on a credit card is illegal. It bypasses the whole credit approval process, regardless of how quickly you are going to pay it off.
#60
The One
iTrader: (3)
Originally Posted by sajonf
OK smart guy, what's wrong with putting down $4,000 on a car? Fill me in.
You will have to find an investment that gives you more return than the car loan interest rate. For people with a trusted advisor that can get this (minus all the fees), then it might be worth it. The other issue is that for this $ to earn $, it has to be tied up in the investment. In the mean time, since it is not used as part of the down payment, you have to pay more per month. If you don't have this extra cash (if you are on a budget), then not all of that amount can be in the investment.
Lots of numbers to play with to get the right balance.