Ah, here’s to cash — we love having cash, and we sure hate when cash decides to leave us. If you walk through most small town shops, cash is really what’s for dinner — plastic is accepted, but it’s not as welcome. There are numerous deals that seem to flow a lot more smoothly because there was cash involved — like when you buy a car.
Show up to a dealership with cash, and things seem to grease themselves instantly. Why is that? Well, the salesperson knows that you’re serious. You’re not going to have to deal with banks and other middlemen in order to drive away with the car of your dreams — which means that they aren’t going to have to worry about their commissions. It’s just a matter of figuring out what’s going to happen and what isn’t.
One of the first questions that car buyers have is whether or not to finance their car if they already have cash. It’s tempting to think that you don’t need to worry about financing, but you might be mistaken. One of the things that financing does is let you use other people’s money for the things that matter to you — though not for free of course. You will be paying for the privilege through interest.
Now, you have to stop and think to yourself — is this something that’s going to be worth my time, all things considered. It might be something that you need to skip over if you’re not willing to pay the finance charges involved with borrowing the money. However, there are times where financing is a smart idea. For example, when you have bigger goals on your mind than owning a car – like bolstering your savings for a true emergency — then it’s better to finance the car through the finance company than to fork over your hard earned cash in one big lump sum. You will still pay through the nose, so to speak, but it won’t be as bad because it’s broken up over time. Sometimes the gift of time is princess in the world of finance, because it doesn’t come around all that often. You alone are the only person that can really decide this.
What about if you combined the two concepts? You could ideally go down to the dealership and offer up part of your cash savings in return for a lower interest rate and lower fees overall. Cash is very powerful, and having plenty of cash can help you seal the deal when your credit alone might not work in a pinch.
For people that are self employed or have a hard time verifying their income for whatever reason they can always go ahead and go with the hybrid cash offer. This can make it easier for the dealership to essentially take your word that you’re making the money that you are, or require less documentation than someone that’s trying to borrow more money from the finance company.
Of course, if you can arrange your financing from another source — like a bank or another finance company — that can also be a good thing. You really los ea lot of negotiating power going to a dealership, but people that really want to be able to take test drives should definitely think about going down to the dealership after all.
Whatever you decide, you should make sure that you’re paying close attention to everything happening down at the dealership. You don’t want to miss details and you definitely don’t want to get caught up in monthly payments — look at the transaction from every angle, and you’ll be just fine!