Should you buy a car with cash?

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If you have enough liquid cash on hand to purchase a vehicle the old fashioned-way, congrats! There are a lot of good reasons to buy a car this way, but there are also some downsides to keep in mind. Here we discuss the pros and cons of buying a car with cash. #Autotrader

0:00 Buying a Car with Cash
0:13 Pro: Discounts
0:19 Pro: NO Car Payment
0:27 Pro: Spending Less Money
0:40 Pro: Buying Within your Means
0:47 Pro: Buying Power
0:57 Con: Financial Hardship
1:08 Con: Few to No Discounts
1:16 Con: Missing Out on Deals
1:26 Con: Return Policy Woes
1:37 Con: Missed Opportunities
1:50 Con: Not Building Credit
2:19 Autotrader Tools
2:58 Final Thoughts


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Always pay cash which makes it for a clean transaction without any fees and added confusion about the final price. Right now most banks will charge you 7-9% APR for a new car which means as much as $12k for the life of the loan. Start with negotiating the price but never discuss the financing, only after you agree on the price of the car tell them that you rather write them a check than take a loan. There is little they can do at that point other than go to the bathroom and cry for a few minutes.

Gheorghe
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The finance trap has caveats. If you do pay too early, there are fees for paying early. Secondly, don't buy new, wait a few years. There are lots of unsold 2-3 year old vehicles that haven't been registered yet and still will have a new warranty attached for thousands of tens of thousands of dollars less.

westoncharm
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I'm sorry, but always pay cash if you can afford it. Shop around and you will have less of a headache finding a great deal. Dealers have all kinds of tricks like giving you a higher interest rate, making you pay more on your monthly payment (packing the payment) and jacking up the cost of the car itself. Screw all of them. They are all liars and believe you are a sucker for just walking it. By a slightly used car from a private individual and they will take the first hit.

Mr.Hooter
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Absolutely, why pay more over time for something worth less over the same period of time??

MANYCARS
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Paying a low interest auto loan on-time helps a person's credit score.

sokratzmmf
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I pay with Bitcoin and Kohl's Cash.

ArneAsada
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The advice you're giving is false and misleading. Paying for car with cash gives you zero leverage and zero discounts. This is because car dealerships make more profit from finance buyers than cash buyers. With a finance buyer, you can mark up the interest rate and make profit. The lender will also pay the dealer a fee for finding a customer for them. Furthermore, it's much easier to sell extended warranties to a finance buyer than a cash buyer.
Due to all this, finance buyers get more discounts and pay a lower price for the car than the cash buyer. I own a car dealership and the truth is, car dealerships love finance buyers and hate cash buyers. We always make the cash buyer pay a higher price for the car. If you want to pay the lowest price for a car, always finance with the dealership and pay off the loan completely within a month of purchase

johnkonde
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Pay cash don’t worship the almighty FICO score, if you need a home loan in the future, they can do an underwriting

nathanbeaner