Paying cash for a vehicle

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rashad3000
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Paying cash for a vehicle

Post by rashad3000 » Tue Mar 19, 2019 11:38 am

Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.

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8foot7
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Re: Paying cash for a vehicle

Post by 8foot7 » Tue Mar 19, 2019 11:45 am

Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.

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ohboy!
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Re: Paying cash for a vehicle

Post by ohboy! » Tue Mar 19, 2019 11:51 am

$10k for a car with 150k miles seems a crap deal.

stoptothink
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Re: Paying cash for a vehicle

Post by stoptothink » Tue Mar 19, 2019 11:52 am

8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
Some people here think the new car, being 8yrs old, would still be a death trap.

MichCPA
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Re: Paying cash for a vehicle

Post by MichCPA » Tue Mar 19, 2019 11:56 am

Just here for another Dave Ramsey humble-brag thread.

obgraham
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Re: Paying cash for a vehicle

Post by obgraham » Tue Mar 19, 2019 1:20 pm

To me, replacing an old car whose history I know well, with another old car (well not quite as old) whose history is unknown, is not something I'd go for.

Both are at the "drive till they die" stage. I'd keep my 10k.

Waiting_for_Godot
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Re: Paying cash for a vehicle

Post by Waiting_for_Godot » Tue Mar 19, 2019 1:28 pm

ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
+1

alamo
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Re: Paying cash for a vehicle

Post by alamo » Tue Mar 19, 2019 1:37 pm

rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
I prefer to buy the 1yr old demo vehicle (with all maintenance records), then proceed to drive it till it wont drive anymore. The cars are lightly used but can be significantly discounted. Full factory warranty, etc.

dpm321
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Re: Paying cash for a vehicle

Post by dpm321 » Tue Mar 19, 2019 5:12 pm

Good thing for the American economy that the average American doesn't think like you :happy ! Almost everyone focuses on the monthly payments and that's what sellers count on.

Trader Joe
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Re: Paying cash for a vehicle

Post by Trader Joe » Tue Mar 19, 2019 5:55 pm

rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Excellent choice. Very smart decision.

ponyboy
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Re: Paying cash for a vehicle

Post by ponyboy » Tue Mar 19, 2019 6:01 pm

$10k for a vehicle with 150,000 miles...wow, what a steal, lol.

RobLyons
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Re: Paying cash for a vehicle

Post by RobLyons » Tue Mar 19, 2019 6:10 pm

This vs an alternative view where a vehicle with that many miles, or even half that many miles, may require thousands of dollars in repairs...
many worrisome days and nights...

several break downs on the side of the highway...

late appointments...

missed days of work...

embarrassing jump starts...

multiple trips to the mechanic...

tow trucks from work...

and tow trucks from home...


while conversely, swapping that old jalopy and buying new (or new to you) will almost certainly guarantee you a worry free vehicle for 10+ years to come, besides normal wear and tear, battery and tires, while financing at 1.60% from a local credit union... my actual current financing option...


and considering most of us here are not living on the brink of despair...

miles away from homelessness...

and can easily afford a newer vehicle...



The choice here is easy. Lumped in to the thread on BH'ers strictly advocating for owning no more than 3-4 room homes..
It's common sense here. Just upgrade and live a better, more worry free life. We are not starving here folks we are planning our investment strategy to retire early or live a better life later than now. But we don't have to live like paupers in order to do this.

Stepping off my soap box.
"Great parenting sets the foundation for a better world"

Broken Man 1999
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Re: Paying cash for a vehicle

Post by Broken Man 1999 » Tue Mar 19, 2019 6:22 pm

RobLyons wrote:
Tue Mar 19, 2019 6:10 pm
This vs an alternative view where a vehicle with that many miles, or even half that many miles, may require thousands of dollars in repairs...
many worrisome days and nights...

several break downs on the side of the highway...

late appointments...

missed days of work...

embarrassing jump starts...

multiple trips to the mechanic...

tow trucks from work...

and tow trucks from home...


while conversely, swapping that old jalopy and buying new (or new to you) will almost certainly guarantee you a worry free vehicle for 10+ years to come, besides normal wear and tear, battery and tires, while financing at 1.60% from a local credit union... my actual current financing option...


and considering most of us here are not living on the brink of despair...

miles away from homelessness...

and can easily afford a newer vehicle...



The choice here is easy. Lumped in to the thread on BH'ers strictly advocating for owning no more than 3-4 room homes..
It's common sense here. Just upgrade and live a better, more worry free life. We are not starving here folks we are planning our investment strategy to retire early or live a better life later than now. But we don't have to live like paupers in order to do this.

Stepping off my soap box.
Agreed! And, as a bonus if the Boglehead spends some of their IRA loot, they will lower their future RMDs, perhaps. Me, I hope we find ourselves in tax brackets I haven't seen since I worked for a living. That tax bracket would mean we have lots more loot than we planned on having in retirement. Oh, I'm sure I will whine about it some if it happens, but I can't say I'll be very sincere about it.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Fieldsy1024
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Re: Paying cash for a vehicle

Post by Fieldsy1024 » Tue Mar 19, 2019 8:23 pm

Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.

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Fieldsy1024
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Re: Paying cash for a vehicle

Post by Fieldsy1024 » Tue Mar 19, 2019 8:25 pm

Waiting_for_Godot wrote:
Tue Mar 19, 2019 1:28 pm
ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
+1
10k for 150k.......goodluck.......get AAA

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GerryL
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Re: Paying cash for a vehicle

Post by GerryL » Tue Mar 19, 2019 8:41 pm

Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.

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Fieldsy1024
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Re: Paying cash for a vehicle

Post by Fieldsy1024 » Tue Mar 19, 2019 8:42 pm

GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.

JGoneRiding
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Re: Paying cash for a vehicle

Post by JGoneRiding » Tue Mar 19, 2019 9:46 pm

ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
My thought too! And I am all for driving till the wheels fall off!

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StevieG72
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Re: Paying cash for a vehicle

Post by StevieG72 » Tue Mar 19, 2019 10:37 pm

ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
Yeah, I wouldn’t get excited about that deal...
Fools think their own way is right, but the wise listen to others.

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StevieG72
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Re: Paying cash for a vehicle

Post by StevieG72 » Tue Mar 19, 2019 10:37 pm

I paid cash for my current vehicle and have a goal of 300,000 miles.
Fools think their own way is right, but the wise listen to others.

phxjcc
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Re: Paying cash for a vehicle

Post by phxjcc » Wed Mar 20, 2019 2:04 am

Ahh, Dave Ramsey.

I believe his message is more allegorical about don't over spend than strictly "paying cash".

Um, had you done this on Jan 1, you wouldn't have $13,200 in the bank (assuming the money is in sp500 fund).

Paying cash is not the answer.

Not buying based upon a payment that obfuscated the cost is the answer.

Sheep get sheared and pigs get slaughtered--if you cannot resist the "I can put you into this WhizBang Wondemobile for about $400 per month", then by all means pay cash.

Otherwise get a low interest loan from a CU and keep the rest in the market.

And don't buy some POS, because some talk show genius seems to have all the answers to life.
Yes, Honda Fanboys, I know a Pilot will last 50000000000 miles because you brother's best friend's sister in law's cousin has one with that many miles.

Your's will not,
Not without a 1000 timing chain/water pump, 4000 transmission and 3000 top end rebuild. In that order.
And by then the interior is shot.

Get something that will last for ten years at a minimum, because the transaction costs are higher on autos than most people recognize.
You will probably loose 10% on each side if you are lucky, most loose 20% on each side. Plus taxes and fees.

How would you feel if every three years Vanguard cut you retirement assets by 20-40% ?

Ramsey is speaking to the sheep.
Trying to protect them from themselves.

Cheers.

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tennisplyr
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Re: Paying cash for a vehicle

Post by tennisplyr » Wed Mar 20, 2019 6:49 am

Some people don't buy/keep cars just based on the value they're getting, I'm one of them.
Those who move forward with a happy spirit will find that things always work out.

Nissanzx1
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Re: Paying cash for a vehicle

Post by Nissanzx1 » Wed Mar 20, 2019 7:07 am

Agreed. I have 277K on 03 Honda Element, ice cold a/c, hot heat. Money in the bank ready to buy anything I want when the time comes.

Side note on Dave Ramsey: I’m a fan. When I first heard Dave, I had 3 car loans, 11 credit cards, and couldn’t rub two $100 bills together. 10 years later I have 5 Paid for vehicles, 3 paid for homes, retirement on track, no debt of any kind, significant cash emergency fund. His personal story somehow resonated with me, and impacted my life in a fantastic way. If you follow his steps and make at least $50-60K, you’ll likely become a millionaire...

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Nate79
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Re: Paying cash for a vehicle

Post by Nate79 » Wed Mar 20, 2019 7:19 am

I agree that when you are forced to pay cash and not finance that you are much more likely to really think about the price, the options, and if you really need the car. This applies to any item. It is well known with many, many studies that when paying cash vs paying with any type of convenient payment option that you spend less with cash.

ohai
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Re: Paying cash for a vehicle

Post by ohai » Wed Mar 20, 2019 7:30 am

Dave Ramsay - bad advice for people with good financial knowledge and discipline, great advice for people without it. He doesn't really care about optimal financial decisions, but he just wants you to simplify your finances so you don't become a danger to yourself.

Anyway, apparently, 2010 Honda Pilots are selling for $10k to $14k. Who knew? I guess they must be pretty reliable cars.

MikeG62
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Re: Paying cash for a vehicle

Post by MikeG62 » Wed Mar 20, 2019 7:34 am

rashad3000 wrote:
Tue Mar 19, 2019 11:38 am
Yesterday, I truly realized why Dave Ramsey says to pay cash for a vehicle. I was thinking about “upgrading” my 2003 Honda Pilot with 228,000 miles. Found a decked out 2011 Honda Pilot Touring for $10,990 with 149,000 miles. If I was focused on payments, it would have been easy to pull the trigger. However, placing the focus on paying cash, it made me think twice. Do I want to write a check for $11,000 when my current vehicle is getting me around just fine? Nope, I’ll just continue driving the 2003 until I can’t drive it anymore.
Counterpoint. For the last 20 years of my work career, I bought all of my/our cars for cash. They were all new cars, consisting of higher end brands (BMW, Mercedes, Audi, Land Rover, Lexus). Paying cash did not give me pause. It is what it is. I did not want to pay interest on a loan. One time I had my DW write out the check at the dealership just so that she appreciated how much the vehicle cost. Did not change the decision though, but did open her eyes a bit (had never written out a check that large before).

It's different strokes for different folks. No one size fits all. We lived well below our means, but far from frugally.

We have now sold all owned cars and we are leasing. Prefer the new car every three years thing, new technology, always under warranty, etc... We are now in our 4th year of retirement and are living up to the level of our means.
Real Knowledge Comes Only From Experience

TheHouse7
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Re: Paying cash for a vehicle

Post by TheHouse7 » Wed Mar 20, 2019 7:41 am

MichCPA wrote:
Tue Mar 19, 2019 11:56 am
Just here for another Dave Ramsey humble-brag thread.
+1 :D
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

BogleMelon
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Re: Paying cash for a vehicle

Post by BogleMelon » Wed Mar 20, 2019 7:43 am

Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
Once the dealer becomes aware that the customer is paying cash, what prevents him from changing the agreed price, claiming that it was a financing only price?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

Topic Author
rashad3000
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Re: Paying cash for a vehicle

Post by rashad3000 » Wed Mar 20, 2019 7:52 am

Great feedback!

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munemaker
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Re: Paying cash for a vehicle

Post by munemaker » Wed Mar 20, 2019 8:01 am

tennisplyr wrote:
Wed Mar 20, 2019 6:49 am
Some people don't buy/keep cars just based on the value they're getting, I'm one of them.
If not value, then what? Luxury cars for image and status?

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Time2Quit
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Re: Paying cash for a vehicle

Post by Time2Quit » Wed Mar 20, 2019 8:02 am

We buy new and pay cash or take the 0% financing (Have done this once) if the final price is the same. I make sure the car has the highest IIHS safety ratings of the time for its class, maintain them well and swap them out in 8 to 10 years with at least 200k miles on them. I do not want a car to ever hold me back from being able take a long trip at a moments or doubt its road worthiness. This is one area when I am not a BH. We LBYM but enjoy our large SUV's and pickups.

I always negotiate price through email. I tell them what I want exactly model, options etc., tell then I will be buying in 24 hours if they are the lowest bid. I send end the same email out to 3 or 4 dealers and ask them to quote me their lowest price. I then try to work the lowest priced guy specially if he is a bit further away, a little more by having them throw in a few extras for no cost. (floor mats, better tires, etc...). Once agreed to, I ask if they have special financing rates and if there is a zero percent or some additional cash back.

When we finally fully retire and do not drive as much, we will probably lease and get a new car every 3 years.

To each his own. Good Luck!
"It is not the man who has too little, but the man who craves more, that is poor." --Seneca

jharkin
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Re: Paying cash for a vehicle

Post by jharkin » Wed Mar 20, 2019 8:28 am

RobLyons wrote:
Tue Mar 19, 2019 6:10 pm
This vs an alternative view where a vehicle with that many miles, or even half that many miles, may require thousands of dollars in repairs...
many worrisome days and nights...

several break downs on the side of the highway...

late appointments...

missed days of work...

embarrassing jump starts...

multiple trips to the mechanic...

tow trucks from work...

and tow trucks from home...
This thread is talking about Honda's, not Chrysler's. ;) When I was a kids we drove 80s vintage Honda's to 250k+ and didn't have problems like that. Late model Honda's barely need more than oil changes and tires to go that long.

LiterallyIronic
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Re: Paying cash for a vehicle

Post by LiterallyIronic » Wed Mar 20, 2019 9:20 am

ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
Speaking as the resident expert in driving the worst cars on the planet, you should be able to find a car with 150,000 miles on it for under $1,000.
phxjcc wrote:
Wed Mar 20, 2019 2:04 am
Um, had you done this on Jan 1, you wouldn't have $13,200 in the bank (assuming the money is in sp500 fund).

Paying cash is not the answer.

Otherwise get a low interest loan from a CU and keep the rest in the market.
Not everything is about chasing yield.

lazydavid
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Re: Paying cash for a vehicle

Post by lazydavid » Wed Mar 20, 2019 9:30 am

Nate79 wrote:
Wed Mar 20, 2019 7:19 am
I agree that when you are forced to pay cash and not finance that you are much more likely to really think about the price, the options, and if you really need the car. This applies to any item. It is well known with many, many studies that when paying cash vs paying with any type of convenient payment option that you spend less with cash.
Definitely don't agree with this. We just bought the most expensive car we ever have by a VERY wide margin, and also paid cash for the first time ever (essentially...we financed about half of it for 6 weeks or so to save $1200 on the purchase price). Paying cash did not help us choose a cheaper vehicle by any stretch of the imagination. Did it prevent us from spending an additional $10k on the super fancy audio system (we got the "decent" one) and air suspension? Possibly, but unlikely. I wouldn't have wanted to pay an extra $200 a month for that stuff either.

Purchase price and value returned for the cost are the only factors that come into the purchase decision for us. How to pay for a thing once we've decided to purchase is a completely separate decision.

Topic Author
rashad3000
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Re: Paying cash for a vehicle

Post by rashad3000 » Wed Mar 20, 2019 9:47 am

Interesting comments about the price. I know KBB isn't everything, but it is usually a good starting point. The range here is $11,200 and $13,700. if you all know where I can find one for $5000, let me know and I will buy it yesterday.

https://www.familytoyotaofburleson.com/ ... 99BB021171

sport
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Re: Paying cash for a vehicle

Post by sport » Wed Mar 20, 2019 10:51 am

BogleMelon wrote:
Wed Mar 20, 2019 7:43 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
Once the dealer becomes aware that the customer is paying cash, what prevents him from changing the agreed price, claiming that it was a financing only price?
If that happens, you can stand up and walk away. I once had a car salesman follow me out to the parking lot when I was unhappy with his offer and walked out.

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Fieldsy1024
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Re: Paying cash for a vehicle

Post by Fieldsy1024 » Wed Mar 20, 2019 11:00 am

BogleMelon wrote:
Wed Mar 20, 2019 7:43 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
Once the dealer becomes aware that the customer is paying cash, what prevents him from changing the agreed price, claiming that it was a financing only price?
Always ask for the out the door price. I only bought a new car once, so I don't know if they change the price if you play to pay in cash. When I bought my car, I told them I had some cash and possibly would need to finance. I decided not to go that route. No issues.

harrington
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Re: Paying cash for a vehicle

Post by harrington » Wed Mar 20, 2019 11:05 am

8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
Man you nailed it.....People always convince themselves that they need all the latest safety features and its an extremely overrated theory. Whatever happened to paying attention. You don't buy a new car based on the safety features. Thanks for speaking the truth.

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Noble Knight
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Re: Paying cash for a vehicle

Post by Noble Knight » Wed Mar 20, 2019 11:15 am

I use a higher financing rate/term as a bargaining chip to lower the price and the state tax I would pay.

bullmoose85
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Re: Paying cash for a vehicle

Post by bullmoose85 » Wed Mar 20, 2019 12:48 pm

Reading the comments, it seems many people think all vehicles are created equal. Vehicles across makes and models vary widely in quality in reliability. $10k for a Toyota Highlander with 150k miles is an entirely different proposition than for a Chevy Equinox. Mileage by itself doesn't say much without the context of the vehicle's reputation for reliability and how well it's been maintained.

I don't really buy into the logic that you should finance a car because it allows you to put more cash into the market. Yes, the S&P is up 10% (or whatever it is) YTD. But what if it had dropped 10%, which it just as easily could have done? In that case, not only have you lost money on your investments, you're now carrying debt on a highly depreciating asset.

I agree with the previous comment that not everything in life is about chasing yield. Don't overthink things. A car is a tool to get you from point A to B, nothing more. I pay cash for cars, but I do my due diligence on what the most reliable used cars are in my price range. I take care of them, and they in turn take care of me. And the icing on the cake: no debt.

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tennisplyr
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Re: Paying cash for a vehicle

Post by tennisplyr » Thu Mar 21, 2019 7:02 am

munemaker wrote:
Wed Mar 20, 2019 8:01 am
tennisplyr wrote:
Wed Mar 20, 2019 6:49 am
Some people don't buy/keep cars just based on the value they're getting, I'm one of them.
If not value, then what? Luxury cars for image and status?

Yes, image and status for some.....how about safety, comfort, rideability, speed, brand loyalty, etc, etc
Those who move forward with a happy spirit will find that things always work out.

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Cycle
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Re: Paying cash for a vehicle

Post by Cycle » Thu Mar 21, 2019 7:11 am

I'm a big fan of the cash only philosophy, though I do churn credit cards.

It seems ludicrous to take three months savings to buy a 40k vehicle when I could take 1 weeks savings and still get from point a to b just as safe and quickly. There are many great and safe cars on Craigslist for $4k.
Never look back unless you are planning to go that way

BogleMelon
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Re: Paying cash for a vehicle

Post by BogleMelon » Thu Mar 21, 2019 7:49 am

Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
How to make him think so without lying? I mean, I am interested in that idea, but at the same time, I don't want to lie to someone to save money. How to play that game in an ethical way?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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midareff
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Location: Biscayne Bay, South Florida

Re: Paying cash for a vehicle

Post by midareff » Thu Mar 21, 2019 8:02 am

Waiting_for_Godot wrote:
Tue Mar 19, 2019 1:28 pm
ohboy! wrote:
Tue Mar 19, 2019 11:51 am
$10k for a car with 150k miles seems a crap deal.
+1
and it's very shortly to be 9 model years old as well.

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Fieldsy1024
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Re: Paying cash for a vehicle

Post by Fieldsy1024 » Thu Mar 21, 2019 8:16 am

BogleMelon wrote:
Thu Mar 21, 2019 7:49 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
How to make him think so without lying? I mean, I am interested in that idea, but at the same time, I don't want to lie to someone to save money. How to play that game in an ethical way?
Dealers are not saints. They hold back a lot of information on how low they can really go. You can choose to be 100% straight up with them if you want. I told them I might need a loan and that's it. Once asked again and again I said I would have to talk with my wife.

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fizxman
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Location: Harrisburg, PA

Re: Paying cash for a vehicle

Post by fizxman » Thu Mar 21, 2019 8:18 am

BogleMelon wrote:
Wed Mar 20, 2019 7:43 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
Once the dealer becomes aware that the customer is paying cash, what prevents him from changing the agreed price, claiming that it was a financing only price?
The only way it would go up is if by paying cash you lose out on rebates. I don't think a salesperson would ever raise the price of the vehicle because you changed your mind and decided to pay cash. So if you ever do buy a car and want to pay cash, look at all the rebates possible first, even if that means financing. Then just pay off the loan right away. I learned that on this forum when I bought a truck in December. When I bought my truck, I told them I'm planning to pay cash, which meant I would not be able to get a $500 rebate from Ford Credit. I then proceeded to get the price down as low as I could. I then "changed my mind" and said I'll finance so that I could get that $500 rebate and then I paid off the truck a few weeks later.
BogleMelon wrote:
Thu Mar 21, 2019 7:49 am
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:42 pm
GerryL wrote:
Tue Mar 19, 2019 8:41 pm
Fieldsy1024 wrote:
Tue Mar 19, 2019 8:23 pm
Do not let the dealer know you plan to pay cash. This way they will drop the price more. They want you to have a loan from them.
Absolutely. No discussion of financing (or not financing) until price is nailed down. Also, don't discuss trading in the old car until the end.
Also this. If they think you will need a large loan the price drops instantly. Vice Versa.
How to make him think so without lying? I mean, I am interested in that idea, but at the same time, I don't want to lie to someone to save money. How to play that game in an ethical way?
Just tell them you don't know what you plan on doing with your car yet. Say you may plan on trading it in, selling it privately or keep it.

The best thing to do is to get multiple quotes on vehicles from different dealerships and get multiple quotes on the vehicle you may or may not trade in then play the dealerships off on each other.

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rashad3000
Posts: 266
Joined: Fri Feb 24, 2017 11:20 pm

Re: Paying cash for a vehicle

Post by rashad3000 » Thu Mar 21, 2019 8:36 am

bullmoose85 wrote:
Wed Mar 20, 2019 12:48 pm
Reading the comments, it seems many people think all vehicles are created equal. Vehicles across makes and models vary widely in quality in reliability. $10k for a Toyota Highlander with 150k miles is an entirely different proposition than for a Chevy Equinox. Mileage by itself doesn't say much without the context of the vehicle's reputation for reliability and how well it's been maintained.

I don't really buy into the logic that you should finance a car because it allows you to put more cash into the market. Yes, the S&P is up 10% (or whatever it is) YTD. But what if it had dropped 10%, which it just as easily could have done? In that case, not only have you lost money on your investments, you're now carrying debt on a highly depreciating asset.

I agree with the previous comment that not everything in life is about chasing yield. Don't overthink things. A car is a tool to get you from point A to B, nothing more. I pay cash for cars, but I do my due diligence on what the most reliable used cars are in my price range. I take care of them, and they in turn take care of me. And the icing on the cake: no debt.
Love it!!!

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sunny_socal
Posts: 1964
Joined: Tue Mar 24, 2015 4:22 pm

Re: Paying cash for a vehicle

Post by sunny_socal » Thu Mar 21, 2019 8:41 am

8foot7 wrote:
Tue Mar 19, 2019 11:45 am
Careful. Some people on this board apparently believe you’re driving around a tin can death trap with no safety features.
True. No backup camera? No lane departure sensing? You've living on borrowed time.

I'm with you OP. As long as you have seatbelts and an airbag you're GTG.

PluckyDucky
Posts: 106
Joined: Tue Jan 15, 2019 8:29 pm

Re: Paying cash for a vehicle

Post by PluckyDucky » Thu Mar 21, 2019 9:17 am

Some dealers these days offer lifetime powertrain warranties, which you can only get buying new.

And financing is not an issue. As another poster mentioned, sometimes you have to finance to get the best overall price. Then if your interest rate is low enough, you actually get paid to finance. Honda still has some vehicles at 0.9% financing and more with 1.9% now. Consumers Credit Union pays 5.09% APY on up to $10k. Many banks have accounts with 2.5% APY. So get paid to finance and chuckle to yourself at your net negative interest rate car loan.

bluebolt
Posts: 833
Joined: Sat Jan 14, 2017 9:01 am

Re: Paying cash for a vehicle

Post by bluebolt » Thu Mar 21, 2019 9:23 am

BogleMelon wrote:
Thu Mar 21, 2019 7:49 am
How to make him think so without lying? I mean, I am interested in that idea, but at the same time, I don't want to lie to someone to save money. How to play that game in an ethical way?
I truthfully say that I will finance if I can get a good enough rate. But will negotiate the final price before having them check rates.

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