Say I'm paying cash on a used vehicle?

[Shaman]

I'm starting to shop for a used vehicle, and most of the ones I am looking for are at dealerships. I've heard that saying you are paying cash for a new vehicle is a bad thing, but not sure how it goes for used vehicles.

Should I keep it quiet, or come out with it?

 

[Zee09]

Many preach that.
I bought cash this year and got a great deal. Yes they make money on financing but you can get screwed on that.

Try to take advantage of zero percent financing and watch them increase the price or take away incentives.

 

[jeepman3071]

It really doesn't help you in any way these days, since most places have incentives to get people to finance vehicles.

The best way to do it with a dealer is negotiate an out the door price without them knowing how you will be paying, then pay in cash.

 

[Leo99]

Why say anything. Tell them you're not sure if they press you on it.

 

[jeepman3071]

Why say anything. Tell them you're not sure if they press you on it.

I would just say you want to decide on an out the door price first. If you say anything that hints you aren't sure the finance people get all excited that they might be able to sway you.

 

[wag123]

Keep it quiet.
When dealing with a sales person, deflect any/all inquiries as to how you are going to pay for the vehicle. If they press you just tell them that you haven't decided how you are going to pay for it and then insist on discussing the vehicle's "drive out" price ONLY. You need to negotiate the bottom line "drive-out" price because many/most dealers are tacking-on exorbitantly high documentary (and other) fees to the vehicle's sales price. Many states (like Texas) do not allow buyers to opt-out of these fees, so you need to negotiate the bottom line "drive out" price including all of the fees from the get-go.
The absolute WORST thing that you can do during negotiations is to let them get you off of the price and onto the payments. If you have done your homework and legwork before you started (like all of the experts tell you to do), you should already have your financing arranged and know how much you can afford to spend to get to your payments. You can't purchase a $40k vehicle for the payments of a $30k vehicle, the math simply doesn't work. The three ways that they get there are by balloon payment financing, a lease, or extending the loan term to... forever. You can't blame the dealer for doing this, they are in business to make money, as much money as they can on each transaction, you can only blame yourself for falling for it thinking that you are getting something for nothing.

 

[gman2304]

I doubt it makes much difference with a dealership but confident that ca$h would sway Wally at the corner lot.

 

[Nick1994]

They won't be happy about it. Put 1/2 as a down payment of cash and finance the rest to keep them happy so you get your deal. Then pay off the loan when it comes in the mail.

We had to do this with my grandma's van a few years back. It was a $3k difference paying cash vs. financing.

 

[Kruse]

Depending on the amount that you put down, just remember that if the amount of cash is fairly large, the dealer must legally report the cash transaction to the IRS. Not that you've done anything wrong, but you will be on the radar of the IRS.

 

[AZjeff]

When you say cash do you mean cash or a check? If in US currency then if you pay over $10k it has to be reported. If you don't care go for it.

Report of Cash Payments Over 10000 Received in a Trade or Business Motor Vehicle Dealership QAs | Internal Revenue Service

The Motor Vehicle Technical Advisor Program in conjunction with IRS specialists on money laundering would like to assist dealers in their compliance with the filing requirements of Form 8300. In pursuit of that goal, we have compiled a list of dealership specific questions and answers.

www.irs.gov

 

[slacktide_bitog]

Are you shopping for cheap low-budget cars?

 

[Astro14]

When you say cash do you mean cash or a check? If in US currency then if you pay over $10k it has to be reported. If you don't care go for it.

Report of Cash Payments Over 10000 Received in a Trade or Business Motor Vehicle Dealership QAs | Internal Revenue Service

The Motor Vehicle Technical Advisor Program in conjunction with IRS specialists on money laundering would like to assist dealers in their compliance with the filing requirements of Form 8300. In pursuit of that goal, we have compiled a list of dealership specific questions and answers.

www.irs.gov

However, a wire transfer is not reportable.

So, for example, you pay $35,000 via wire transfer, it is not reported to the IRS.

 

[wag123]

However, a wire transfer is not reportable.

So, for example, you pay $35,000 via wire transfer, it is not reported to the IRS.

Only cash, as in "greenbacks", is reportable.

 

[Gimpy1]

The problem right now is that dealers have no incentive to deal right now. The shortage of new and used cars due to the pandemic and supply chain interruptions has created a whole new economic model. I bought my KIA in Jan of 2020, right as dealers are trying to unload inventory because of taxes. I asked what is the out the door cash price, the salesman insisted on talking about monthly payments, I said I wanted a person that had the ability to listen. I was transferred to the sales manager got a an out the door price, went to the bank and literally got cash.

 

[totegoat]

I was looking at a new vehicle and considering letting them finance it to get a better deal........the problem was they couldn't check my credit because I keep it locked. Ended up buying what we wanted in a different state, no financing and happy with the price and vehicle.

 

[AZjeff]

I was transferred to the sales manager got a an out the door price, went to the bank and literally got cash.

So you were OK with the dealership filing the form mentioned above to the IRS and the Financial Crimes Enforcement Network? A bank check would have prevented it.

The OP likely isn't going to do much dealing with cash in today's situation unless maybe at a used car lot.

 

[ekrampitzjr]

So you were OK with the dealership filing the form mentioned above to the IRS and the Financial Crimes Enforcement Network? A bank check would have prevented it.

The OP likely isn't going to do much dealing with cash in today's situation unless maybe at a used car lot.

Not too many places take personal bank checks for high amounts, especially now that check use is fading fast. Many dealers would require you to get a cashier's check from your bank drawn from your account. Those are guaranteed-pay.

If you have the money in a checking account, a debit card for the account might also be acceptable.

 

[atikovi]

Depending on the amount that you put down, just remember that if the amount of cash is fairly large, the dealer must legally report the cash transaction to the IRS. Not that you've done anything wrong, but you will be on the radar of the IRS.

Where do people come up with this stuff? Unless you're buying a different car every week, the IRS has better things to do.

 

[dishdude]

They won't be happy about it. Put 1/2 as a down payment of cash and finance the rest to keep them happy so you get your deal. Then pay off the loan when it comes in the mail.

We had to do this with my grandma's van a few years back. It was a $3k difference paying cash vs. financing.

Added bonus, on most loans the borrower needs to keep it 90-120 days to avoid the dealer having their commission charged back.

 

[AZjeff]

Not too many places take personal bank checks for high amounts, especially now that check use is fading fast. Many dealers would require you to get a cashier's check from your bank drawn from your account. Those are guaranteed-pay.

If you have the money in a checking account, a debit card for the account might also be acceptable.

Meant "bank" check as in cashier's check, my bad.