Just a general question. Which is better in the long term? Does it all depend on the deal? Would you save more in the long run buying with cash?
If you can, avoid payments as much as possible.
Both. Use financing to negotiate a lower price. Dealer will think they are getting a deal on interest. But then pay the financing off right away in cash.
If you are not the wheeling and dealing type, use 3rd party financing from a credit union, and then maybe pay it off right away.
I am of the understanding that dealers hate cash buyers, then 3rd party financing buyers, and absolutely love dealer financed buyers.
If you DO buy via an auto loan, get it from your bank/credit union. They will give you a much better rate than the dealership. Don't tell the dealership that you are financing via a bank or paying cash until AFTER you negotiate a deal. Much of the dealer's profits come from high interest rate loans on the cars they sell. There's a lot of good car buying advice here at https://carkiller.com/scottykilmer/qa/used/
Definitely cash. I have never bought a single car using loans and I'm glad I haven't. When you pay cash you aren't paying interest on it and also the car is yours right away. I mean with a loan you might be able to afford it right now but what if conditions change in a year and you can't make the payments anymore? The bank will own the car and all the payments to that day are gone. Cash gives you peace of mind in my opinion.
It really depends on your personal situation.
I'm highly allergic to car payments. The only time I went that route was when I worked in the field organization of a company that gave me an allowance for a car. That was about 40 years ago and it was a credit union loan. (The Company paid for most of the car and I kept it when I left.) No car loans since then.
If buying from a dealer, the advice given here to not let them know until the end you're paying cash or with a loan from your own financial institution is what you want to do. If the sales droid persists just tell them you will only discuss financing details with an F&I manager in a secure location. Concentrate on the total "out the door" cost rather than a monthly payment figure and watch carefully for sneaky extras added at F&I time ("TruCoat", etc.) .
I agree with you on not telling the dealership that you are paying cash. I wait until the last minute at the F&I office then text someone to get me a the cashiers check and I just put that in front of the F&I people; it's worked all these years.
Agreed cash is always best.
Apply for financing first until you get the final price you want. Then tell them you pay cash. Dealerships don't like cash because they can't make money off the interest. If you say you pay with cash, they'll try to rip you off as much as they can. But if you finance, they know they can make money off you in the long run so they'll try to get you to sign a deal.
You don't have to apply for financing as in getting the financing application done for them to give you a better OTD price; just tell them you'll consider financing through them if they give you a good rate and don't say anything about cash until last moment at F&I office.
It depends on your situation. Some people don't really have a choice in the matter.
If you can find 0% financing, then I'd say that's pretty good. Better that the money is in my pocket then the bank's. Vehicles depreciate faster than cash.
If you have the means and good credit, get pre-approved at your bank or credit union for the exact car you want if you're going to a dealer. Tell them down payment amounts, etc. Then you know what you can afford. Go to the dealer, when you're pre-approved, you're basically a cash buyer at the time of transaction. You have a lot more haggling power than the guy who gets 8% dealer financing. You can always walk away, and they won't get a sale. Every car from a dealer that I've bought, I bought this way. They'll try to nickel and dime, but don't let them. When I bought my 2013 Ford Fusion, I had the branch manager of my credit union talk to their sales manager because my sales guy wouldn't budge on $200. The manager overruled the salesman, he wanted the sale bad enough.
A trick a car salesman friend told me once when dealing cars. When it comes to putting everything in writing is to try to get the dealer to allow you to transfer your pre-existing tag on a trade-in to your new car. That takes a $200 temp tag fee out of their pocket, which is basically raw profit - they will not let you do it if you're getting a really good deal. The dealer I bought my Fusion from let me do it, even after the ruckus over the $200 shortfall in my pre-approval and what he wanted. I couldn't do it on my Mustang. It was practically at wholesale already.
I bought my truck with a $2,000 personal loan from my bank and $1000 of my own money 2 years ago and got it from a private seller. I paid the loan off in a few months. Private buyers like cash. I bought my old Catalina in cash as well. Owning a vehicle is more economical than paying on one, generally, because fuel and maintenance are all you need to pay for. Making payments adds another expense. Cash is better for piece of mind long term if job security is a concern.
