Paying cash for a car - let dealer know up front?

[mccl]

I plan to buy a car soon and will pay cash.  I am wondering if I should avoid mentioning the cash aspect to the dealer until we have settled on a price for the car.  I think they probably make a commision on the loan referrals that they make to banks or credit unions.  If they know they won't get that commission, maybe they won't agree on as good a price on the car itself?  Anyone know anything about this?

 

[Cut-Throat]

I am not sure about this one. I have always paid cash and most of the time, the sales guy did not ever know how I was paying. They passed me off to finance.

One time, a sales guy asked me "if I wanted to know the payment amount".

I told him I was only making one payment, so go ahead and figure it out for me?

 

[2B]

I always talk to the fleet manager for the "credit union special." I call several dealerships for their best CU price. I then try to personally negotiate a better price with a real salesman. I've never managed to beat the best CU price at a dealership although there is a wide variety in the CU prices.

I never mention how I'm going to pay for it. When the time comes, I pull out the checkbook.

 

[retire@40]

I wasn't sure I was going to pay cash until I talked to the "finance guy" at the dealership.

After I negotiated the price, they told me they were going to get me a great financing deal.  Great to me meant 0% to whatever my breakeven % was at the time (I think something like 2.6%).  

When he started with 5%, I told him to forget it.  He wanted to know why and I explained.  He dropped it to something like 3.75% and I told him I decided to pay cash.

Edit: Oh ya, I just remembered that I even put $10K on my Citibank Dividend card when it was giving me a flat 2% payback, so I even made $200!

 

[JPatrick]

Sure they make $$ if you finance with them and it is always a good idea to just get your best price up front without regard to finance and/or trades, but that is easy to say.
Keep in mind that sometimes a dealer has a rebate for you if you finance.  Sooo, if no prepay penalty is involved, take the finance and rebate followed by a quick payoff.  Example---Last year GM had a $1000 rebate for those who used GMAC financing.  I had planned to pay cash for a car I bought,  but I went along with the deal and paid off the loan about 45 days later.  Cost to finance--about $145--net of $855 to me.

 

[FreeBird]

I have always paid cash in full on the day of purchase for all my vehicles (used & new) over the last 25 years (I really luv those Toyota Tacoma's too!) Personally, I've never seen any advantage to telling them up front whether I was paying for it today or not. A sale is a sale.

 

[73ss454]

Sure they make $$ if you finance with them and it is always a good idea to just get your best price up front without regard to finance and/or trades, but that is easy to say.
Keep in mind that sometimes a dealer has a rebate for you if you finance.  Sooo, if no prepay penalty is involved, take the finance and rebate followed by a quick payoff.  Example---Last year GM had a $1000 rebate for those who used GMAC financing.  I had planned to pay cash for a car I bought,  but I went along with the deal and paid off the loan about 45 days later.  Cost to finance--about $145--net of $855 to me.



JP is correct, some rebate deals will require you to finance with the financing arm of the manufacturer.  Paying it off asap is the right thing to do.

Also when the manufacturer is offering low finance rates such as 2.9 of 3.9 the dealer is not receiving any finance reserve monies.
Although some manufacturers do kick back a flat fee of about 50 bucks to the dealer for doing the paper work.

Don't worry, no one is going on vacation from the dealership because of your finance money.