How do you pay cash for a car?

[ms1031]

FYI, If you make a cash payment of over $10,000 the dealership is required by the IRS to file a form 8300 reporting the payment. Personal checks are exempt from this requirement.

 

[Jonny_Duck]

There are quite a few deals going around right now since the 09s are rolling out for 0% financing etc. What above posters say isnt a bad idea to put it in savings and do that. Also depends what car you want idk if you have one in mind or not but that might make a difference. Be sure to test drive it and be sure its the car you will enjoy. I bought a car 2 years ago and I rly hate driving it I just dont go anywhere in it. I do plan on trying to ge a new car by Dec and make a better decission for a long term investment.

Moeluv4u7 - "all dealerships are different and a feew bad apples give our whole field a bad name". That may be true to an extent but then again when buying a car you usually have to deal with the commission salesperson that is trying to get as much money as possible and then dealership who are also trying to maximise their profits for incentives etc. I am not so sure there is a dealership out there with just the customers needs in mind. I also think even some of the non bad apples still "lose" the keys to your trade in just a bit too frequently.

I do agree though they dont rly need to know how your paying for the car just let them know your undecided and when they want to run your credit imo do not let them you dont need to take a hit on credit. My last car they did run my credit and its still on my report right now even though I had my financing setup through my credit union already. It stopped me from getting ripped off twice basically because they had to come down on the price over $2000 because it wasnt 5% over MSRP which my bank stipulates as a condition.

 

[zoie101]

I paid with a cashier check for my new expedition
just last week
what a great feeling to have no payment
big sign at dealer said
credit card purchases to $2000.00
Just ask them..

 

[sbell111]

When I bought my toy last summer, I just went to the bank and withdrew the money, drove to Indiana (where the car was), and made the trade. It was easy peasey.

It turns out that people are very happy to receive nice, neat stacks of 100s.

 

[d1gitman]

we bought a new minivan in 2005 and paid cash. our method was a bank certified check. however, that was the last vehicle we will "own". unless i buy a toy car, like a 60's 'stang or something similar, we will likely lease from here on out (or until leasing stops being an attractive option). i see no value in "owning" a depreciating item. i view transportation as an expense no differently than the electric bill or phone, cable, etc...i set a budget and currently leasing affords me that budget much better than ownership does.

 

[sbell111]

we bought a new minivan in 2005 and paid cash. our method was a bank certified check. however, that was the last vehicle we will "own". unless i buy a toy car, like a 60's 'stang or something similar, we will likely lease from here on out (or until leasing stops being an attractive option). i see no value in "owning" a depreciating item. i view transportation as an expense no differently than the electric bill or phone, cable, etc...i set a budget and currently leasing affords me that budget much better than ownership does.

So rather than own teh deciating asset, you pay the money and don't get to keep it. To me, that's not an attractive option, but I understand that some other people will have different opinions of this.

 

[d1gitman]

for our particular scenario, i compared the $28,000 purchase of our van vs. a sign & drive ($0 out of pocket) lease for the identical vehical. I would have to keep the van for 10 years, factoring scheduled maintenance (not even figuring any major repairs which is an unknown) in order to equal the lease payment for the exact same vehicle. I have no interest or intention of hanging on to a vehicle for 10 yrs. the fact is, whether a person pays cash, finances or leases, a car (unless it is a collectible) is a transportation expense. i have an amount that i am willing to spend on transportation and leasing currently allows me to meet that budget and drive a new vehicle every 3 years. thus, all i have to do is pump gas, get oil changes & i like to have the tires rotated. no tuneups, tires, brakes, suspension, tranny or engine work, ever. i am not stating that leasing is the cheapest way, but it is a very convenient way and if you grab a lease that the mfr. is pushing incentives on, then it can be cost effective.

another example is my mother (who i thought would NEVER think of leasing or even financing). she ran the math and came to the same conclusion, that she was able to lease a vehicle that was to her liking and the math came out less than buying the identical vehicle and keeping it for 10 yrs. her vehicle that she had prior to leasing was 8 yrs. old. she added up all her costs (besides gas) in owning the vehicle. purchase price, registration, insurance, maintanence, repairs and resale of an 8 yr. old junker with 105k on it. she owned it 8 yrs. to the month. her monthly expense for the old vehicle was only $45 less per month than her brand new, $0 out of pocket lease. Oh, and before she sold the old van, she had her mechanic give her a list of what needed to be done to keep it up to snuff mechanically. that narrowed the gap to within $10 mo. difference between leasing new and owning her van for 8 yrs. the other thing to note is that her van was 9 yrs. old, she paid cash for it as a 1 yr. old vehicle. had she bought the van brand new, she would have exceeded the lease buy bunch.

 

[tlbwriter]

If you buy a new car every 2-3 years either way, leasing can be a good option. Unfortunately, everyone I know who leased a car did it because they couldn't afford to buy the car they wanted, and they were just looking for a lower monthly payment.

 

[Luv Bunnies]

I agree with settling on the price of the car before you reveal that you'll be paying in cash. They will usually try to get you to agree on a monthly payment rather than the overall price of the car. We just keep insisting that we agree on a price and we don't let up until they give us a price that we will accept (DH always does his research and knows what we are willing to pay). We tell the salesman that we need to see the total, final price and then we will decide how we are going to pay for it. We ask that the price, tax, licensing fees, etc. all be written on the contract. After we review everything, we whip out the checkbook and write a check for the entire amount.

No matter what (even if you're going to finance) never, ever fill out a finance application before agreeing (in writing) to the price of the car. If they see that you have a healthy income, they will often try to jack up the price. We've had 2 dealerships do this to us in the past. Now that we're older and wiser, we don't fill out their applications.

It seems that many dealerships are going to a "no haggle" policy. They post the price on the window of the car. That's the final price. Neither you nor they can change it. I actually like this policy. It takes all the games out of buying a car. I think this has always been Saturn's policy (we bought from them in 1999). In 2006, we traded the Saturn for a Honda and the Honda dealer had this policy too.

 

[bmoncher]

AMEX - it was also a Honda Dealer... they would have taken MC or Visa - but I di not have a CC limit high enough with Visa - so I used Amex... No limit!

Beth

 

[Jonny_Duck]

I agree with settling on the price of the car before you reveal that you'll be paying in cash. They will usually try to get you to agree on a monthly payment rather than the overall price of the car. We just keep insisting that we agree on a price and we don't let up until they give us a price that we will accept (DH always does his research and knows what we are willing to pay). We tell the salesman that we need to see the total, final price and then we will decide how we are going to pay for it. We ask that the price, tax, licensing fees, etc. all be written on the contract. After we review everything, we whip out the checkbook and write a check for the entire amount.

No matter what (even if you're going to finance) never, ever fill out a finance application before agreeing (in writing) to the price of the car. If they see that you have a healthy income, they will often try to jack up the price. We've had 2 dealerships do this to us in the past. Now that we're older and wiser, we don't fill out their applications.

It seems that many dealerships are going to a "no haggle" policy. They post the price on the window of the car. That's the final price. Neither you nor they can change it. I actually like this policy. It takes all the games out of buying a car. I think this has always been Saturn's policy (we bought from them in 1999). In 2006, we traded the Saturn for a Honda and the Honda dealer had this policy too.

Yea I have heard Saturn is that way. I have never heard Honda not haggle before but then again I have also been reading Fit forums and since the car is in popular demand there is little wiggle room. Personally I like the haggle its kinda fun. I have only had to do it 3 times but should do it soon again. My first cpl times were stressful my next time I wont be as stressed and will be more prepared on what to expect.

As for leasing. I have looked into it since I change my mind a lot and having the lease isnt a bad idea except I personally dont like just renting a car basically. In almost everything I have read its more money to lease then buy. I am 2 years into my car and I am barely upside down on it so I guess it also depends on what kind of car you buy as some depressiate faster. Then again its all up to the dealer what they will give you whether they will say that scratch will knock $3000 off the value of your car or not but I know my last trade in they went $3000 over blue book to be able to sell me a brand new car. So guess it depends on the demand and the timing I believe is key on going to buy.

 

[srwarden1928]

I make a deposit to a savings account every month. It is designated as the car account. I do not allow myself to buy a car until I have enough in the account to pay cash for it.

BTW I have ALWAYS paid with a personal check. If they want my business, they WILL take it.

I learned these practices from my father. Thats how he ALWAYS purchased his cars.

Leasing is usually a poor deal unless a) you want a new car every two or three years b) you dont drive more than the lease c) its better if you can buy it as part of your business for tax reasons. I am perfectly willing to have a new car every ten to twelve years with never a payment. I drive FAR too many miles for a lease. I certainly couldnt take the trips I want in my car on a lease.

 

[SlightlyGoofy]

I gradually got to the point of where I could pay cash for a car and how I did it was thus. As we paid off a car I put the monthly payment amount in an account and when it came time to buy a new car we had a bigger down payment until we were finally able to pay the full amount. It was a wonderful feeling!

You need to research cars before starting to shop. Do not buy more car than you need. I use Consumer Reports to help pick out the make and model but have stuck with the same one for over 20 years now because of how happy I have been with it. Toyota Camry.

Then I go to Edmunds and such to research the dealer's actual cost, do not to forget to figure in the percentage the maker gives the dealer, 1% or more in some cases.

After doing all my homework I head off and let them know right off the bat that I know what I am talking about. It saves a lot of time. If they start screaming or saying you have to decide NOW, leave immediately. If they are acting that way before they get your money imagine how it would be afterward?

We have always had a trade in with substantial value and we live in a close knit community so the dealer has always accepted our check but I can see how they might need some confirmation of funds before letting someone drive off the lot. Checks are easy to write but having the money in the bank takes skill. Congratulations on having that skill.

Being free of debt makes you feel secure and happy!

Slightly Goofy

 

[d1gitman]

If you buy a new car every 2-3 years either way, leasing can be a good option. Unfortunately, everyone I know who leased a car did it because they couldn't afford to buy the car they wanted, and they were just looking for a lower monthly payment.

we fall into the, want a maintenance free car. thus the typical 3 yr. leases work well.

as far as people who lease in order to have a lower monthly payment for a car they want vs. conventional purchasing and getting a 'lesser' vehicle, i still reiterate that a vehicle, no matter what method you pay for it, is an expense. it all comes down to what your budget is for that expense.

is it wrong to buy groceries and gas on one's CC? or must they pay cash because buying by CC must mean they want more food & gas than they can afford. Maybe a person utilizes their CC in order to get points/mileage and the fact is they can afford what they buy and do pay the bill off.

also, paying cash for a car ties up capital that could be used for other things like investments, etc...

again, there is no right or wrong to paying for transportation, just what works best for each individual.

 

[C.Ann]

Paying cash or financing at a reputable Dealership is not going to make a difference in your price, discount, rebate , or otherwise- Actually a customer paying cash is a higher risk than those financing- Especially today since 9-11

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Absolutely not true.. I paid cash for my car in 2006.. The dealer had a set price in mind and I had a set price in mind.. He refused to budge - until I told him I was paying cash.. At that point he immediately came down to the price I was willing to pay..

I believe I used a personal check for the deposit and then a cashier's check for the balance when I picked up the car..

 

[d1gitman]

on a different note, my methodology for car shopping has changed over the last few years. i attend the auto show each year in Boston to do my hands on research. it is so much more convenient than to deal with salesmen and traveling from dealership to dealership.

when i do lease a vehicle, i do all the negotiating by internet & phone. once i have found the deal i am looking for, then i make an appointment with that dealer and bring copies of our internet correspondence. i then take a test drive an voila, the deal is done! i have done this for our last 6 vehicles and it saves so much time and aggravation. all the salesman has to do is make sure i find a color i like and test drive it.

 

[tlbwriter]

as far as people who lease in order to have a lower monthly payment for a car they want vs. conventional purchasing and getting a 'lesser' vehicle, i still reiterate that a vehicle, no matter what method you pay for it, is an expense. it all comes down to what your budget is for that expense.

is it wrong to buy groceries and gas on one's CC? or must they pay cash because buying by CC must mean they want more food & gas than they can afford.

Well, if you're putting groceries on a CC and not paying it off every month, then yes, you're buying more food than you can afford.

My point about buying more car than you can afford was that these are people who did not want to replace their car every 2 or 3 years. They intended all along to get a conventional loan and buy the car outright when the lease expired. This is a more expensive way to buy a car. Yes, you can budget for that, and if you can afford it, that's great. But if you're leasing for 3 years in order to be able to afford to take out a 5-year-loan on that 3-year-old car at the end of the lease, you're spending an awful amount of money on finance charges.

 

[d1gitman]

Well, if you're putting groceries on a CC and not paying it off every month, then yes, you're buying more food than you can afford. No, that wasn't the statement.

My point about buying more car than you can afford was that these are people who did not want to replace their car every 2 or 3 years. They intended all along to get a conventional loan and buy the car outright when the lease expired. This is a more expensive way to buy a car. Yes, you can budget for that, and if you can afford it, that's great. But if you're leasing for 3 years in order to be able to afford to take out a 5-year-loan on that 3-year-old car at the end of the lease, you're spending an awful amount of money on finance charges.

Not always true. If you get into a lease on a good deal and the buyout price at the end is right, and one can get a good interest rate on the buy, then it might not be as expensive as one thinks. we have only bought 1 of our leases at the end (we have leased 10 vehicles). in that particular case, what we paid in total for leasing and paid for the buyout was less than the sticker of the car when it was new, including interest. also, at that time, it seemed that for a comperable vehicle new, the prices had jumped up significantly than from when we had originally leased it. furthermore, there were no good lease programs or 0%-5% interest terms being offered on vehicle purchases in the vehicle class that we had bought. so in the end, we decided to buy our own used car (what better car to buy used than the one have have already driven and know the history of). we haven't bought our other leases because each time we changed vehicles, we also changed the type of vehicle. i think blanket statements that leasing is more expensive is not always true. maybe often true, but not always. putting pen to paper and doing some analytical math (i am a cost estimator by profession) can yield facts over opinion. in the end, a car is nothing more than an expense. it doesn't matter how you slice it, it is money spend for services rendered, because eventually in time the car will be worth absolutely $0.

 

[tlbwriter]

i think blanket statements that leasing is more expensive is not always true.

Which is exactly why I did not make such a blanket statement.

 

[Dashzap]

I would have loved to read your post but no paragraphs!

I tried to read it. Really. Even highlighting alternate lines. Gave up half way through.