Thanks for the help. CA tax is usually 10% which should include registration and everythign else. So I guess it's more reasonable to get it for around $22,500-$23,000 OTD?

Also, one question, what's a better bargaining tool, paying cash or financing?

 

Depends, but in general, dealerships want to see cold, hard cash. Cash, of course, is usually much less of a risk to them....they get their money right up front, and don't have to concern themselves with the dealer's bank or a reposession (most dealerships are financed by banks). Keep in mind, however, that, by Federal law, any cash sale over $10,000 is reported to police. That doesn't mean that you, or anybody else, personally has anything to hide (I'm sure you don't), but it IS a law that was passed some years ago in response to the fact that new cars were being bought at dealerships with cash from drug sales, and the law has been upheld in the courts, so we're stuck with it.

And......10% state tax on a new car? IMO, that's robbery.....here in VA, it is just half of that and most people here still think it's too high. CA, though, has a long-standing reputation of picking people's pockets. It's just one of the things you have to put up with if you live there.....although several years ago, things went too far, and the public finally rebelled and tossed out the sitting Governor, replacing him with Arnie.

 

I was always told individuals, including a couple of buddies who sold cars, that do not mention that you are NOT going to be using dealer financing until you've agreed on a price. This is because the dealer can make more profit on the deal if you do financing through them (they can tack on an extra 1/4 point financing for example). If you say up front that you already have money to buy it, they could possibly want to build more profit into the selling price of the car.

Where saying that you're going to buy in "cash" comes in handy is where the alternative to buying a product is using a credit card, or a place that you suspect may not want to report all of its income to the IRS. New car dealers do not really fall into either of these categories.

When I bought my sister her IS, I basically called th Chicago area Lexus dealers and told them the exact car I wanted, and asked them what was their bottom line price and that if it was a good deal, I would give them my sisters fax number and she'd sign first thing in the morning. They knew they only had one chance to get my business since I was not there in person, and as a result we got the car $500 over invoice, while it being the most painless buying experience I've ever had.

EDIT: OP, when you say cash, I'm assuming you are talking about writing a personal check out to the dealer, and not walking into the dealership with a briefcase full of $100 bills, right?

 

^^^ Thanks for the tips (mmarshall & faraaz23). You guys kind of contradict each other though so I'm not sure what strategy to use now.

Yup, 10% tax in CA is hell that's why I always try to deal the cars OTD so I don't even notice it.

By cash, I meant we'll be paying the dealership cash but it is financed at another bank with a much lower rate, so we'll be paying with the banks check. Hopefully I could pit these dealerships against each other and have them compete for my business.

 

Try the dealerships online sales

 

I think potentially the best deal you can get is when you finance with the dealer, but have cash in hand or another means to pay off that loan. Like what was mentioned, a lot of times they are willing to give you the lower price if you finance with them because the terms will be higher interest. Often they even give you discounts on parts or extended warranties if you roll it all into the financed price. The trick is you have to make sure there is no early pay off penalty. Once you get the deal, pay if off with your first payment or ASAP.

 

I found this and this Fatwallet threads helpful when buying my IS. That and the right dealership is what you need. If you can get a much better price 1,000 miles away, and pay $600 to ship it like I did, you can feel extra-good about your purchase.

 

It's not really a contradiction. You don't really need to bring up the subject of cash or finance unless the salespeople specifically ask. Just tell them you want the lowest price, regardless. You can tell them it will be cash, but you don't have to tell them just how much you have in your bank account......or are carrying in your pocket. That is not their buisness....the selling price is.

And, by cash, I do NOT mean financing from another bank other than the dealer's..or Toyota Credit. That is not your cash...thet is simply their cash that you borrow. By cash, I mean money that is currently YOURS.....money in your own checking or savings account that you simply hand over to the dealership either in green bills, a personal check, or a cashier's/certified check. That is what is legally considered cash....but, like I said earlier, keep in mind that any cash transactions over 10K get reported to police.

I reason I said earlier that, IMO, cash is preferable is that, One, it frees you from the long-range burden of being in debt, Two, it gives the dealership their money right up front, so whatever they get for the car, they know they have it right in their laps, and are not taking a chance on it, and, Three, they will not have to ultimately deal with a derlar-financed repo, should it come to that. For those reasons, I would go to the dealership with enough in the bank account to cover any price you would settle on.

And, last, some dealerships (don't know about that one) have a no-haggle, Internet price on each car....usually at a healthy discount.....that saves a lot of haggling and time. Chek it on the dealer's website or ask about it.....In my experience shopping with car-buyers, it is a good way to go.