Hartmonstr

I have an LS460 on order that should be here soon. I tend to keep my cars a long time, so I'm paying cash rather than finance or lease. Is this considered a positive, a negative or a neutral thing to a dealer? I am expecting to pay MSRP like everyone else, but does paying cash carry any weight in negotiations? If so, how can it be leveraged, even in a seller's market like this one?

STIG

If you are paying MSRP, paying cash doesn't really matter at all.

jjbodean

i really dont care, however given the choice i would rather not have cash. it always cracks me up when a customer says "im paying cash, so i want your best price!" the two arent connected at all. i guess in days past it used to be a major pain to get financing arranged for a customer so there was an advantage to paying cash, but not anymore.

but like i said, i really dont care as long as the car gets sold.

Hartmonstr

Thanks, it's nice to know your take on it.

DonJuan45i

I agree, from my experiences with car dealers. All large new car dealerships dont really care if you pay them cash or not, not that much of a determining factor. (usually works only for private sellers or small-med used car dealerships.) wouldnt hurt to try tho.

I dont think it will be a negative thing, I am sure they get people that buy their cars with a simple check, might be wierd paying cash tho, because they would have to count it? I doubt they have a bill counting machine at the dealership, so maybe it would be an annoyance that way lol.

exBMWowner

Not to mention the fact that dealers make good money on providing financing to their clients, so an all cash buyer simply means a less profitable buyer to the dealer, and therefore even less reason to offer a discount than they would to a finance/lease buyer, where they can make extra profits on the financing itself.

Ex-Lexic

Do you really mean cash, as in greenback folding bills? Or do you mean a check payment as opposed to financing or leasing?

vraa

iTrader: (2)

I bet he means cash = instant (check, briefcase, whatever) as opposted to financing leasing.

Nextourer

I would think a cheque is easier than physical money.

rominl

iTrader: (4)

yeah, definitely. some dealerships (i saw it before) wouldn't even take your "cash", they ask you for a check instead

i always wonder, by putting buyers into finance program, do the dealerships get kick back? if so, then i guess from dealership points of view, they would like to see financing?

luxury1

I can't imagine walking around with $70,000 in cash!

exBMWowner

They most definitely get kick backs. Sometimes they make more money on the financing than they do on the profit margin on the car. Not only kick backs, but outright marking up the interest rates to the buyer above what the banks are quoting to them, and pocketing the difference.

jjbodean

yes, the dealer will either get a fixed amount or a percentage of the "yield spread premium" which is clearly disclosed on all lfs contracts. (note, i normally refer to lfs since they get about 95% of my business. there are plenty of other finance sources available depending on the dealership). so to answer your question - yes, the dealer makes more money if you finance, which is why it always takes a customer by surprise when i jokingly tell them i am going to have to charge them more if they pay me cash! the look on their face is always priceless, since they are used to in the old days getting a better deal (i guess) by paying cash for their purchase, not being told that its now a disadvantage.

rominl

iTrader: (4)

lol, it's always cool to get insider info

so yeah, in that case, i guess they would prefer someone to finance the car rather than paying cash

Hartmonstr

Whoa, when I said "cash" I meant paying by check as opposed to financing or leasing, not the green stuff. Sorry for the confusion.

I guess even though I won't get a concession on the front end, I will pay thousands less overall than those who finance.