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  • morin2 01/29/10 7:46 am PST

    Sometimes the incentives are either low rate financing OR cash rebate. If you plan on paying cash, then you will do better to choose the cash rebate. Occasionally a manufacturer will offer BOTH rebate and low rate financing - such as when I bought my subaru & received both a 2500 rebate and 2.9% financing. The financing was so low that I used my cash to buy a sci-tech mutual fund at $11 a share the day I bought the car (I had a strong opinion that the sector was undervalued at the time). By the end of the year, it was $22 - so investing the cash, rather than using it for the car, made sense for me.

    The negotiation process is the same otherwise. Its easier on a new car since every dealer pays the same. You will not arrive at a lower price using cash on a new car. Check the TMV here by doing a custom appraisal and also check the "prices paid" in the models forum. Nearly every model has a forum in which other people report their prices paid. If you have a trade-in, you also negotiate the price of your trade - you don't just accept the dealer's first offer.

    Good luck.

  • Stever@Edmunds 01/30/10 11:51 am PST

    Avoiding financing is a great idea (unless you have a very low rate and better use for the cash, like Morin indicates).

    Going in to the dealer with a wad of cash won't help your negotiations; in fact, it may hurt because dealers get a kickback from lenders when they write up an auto loan. So they may make more profit getting you into a loan.

    The dealer will get paid immediately whether they get a check from you or one from the financing company.

    So, you may do a little bit better by telling your salesperson that you aren't sure if you are going to pay cash or finance. Just pay attention to the Out the Door price and don't let them sell based on monthly payments.

    Source: 

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