Buying a New Car With Cash

by Mark S.
(Lexington, MA)

Question: Justin, I am in the process of buying a new car. I am planning on paying cash for the car, or at least giving them a check from my bank or other loan agency (not sure they accept personal checks). My fear is that if they find that out upfront they will not give me a good deal, knowing that I am not going to be using their financing.

When is the right time to reveal this? After we have already agreed on a price for the car? When I am in the F&I Room? Or upfront? I guess my question is will it matter to them, and if so, when should I reveal that?

I could agree to their financing and then just immediately pay it off (assuming they don't have early payment penalties - but I've heard they guard against this).

Answer: Hi Mark. Buying a car with cash is actually one of the best angles you can use to get a good deal. In my car buying guide that is actually step #2, arranging your own financing to Buy Like a Cash Buyer and that's why I recommend people use

This is something that you can tell them right up front. It should not negatively affect the discount that you get. My main suggestion would be to focus on getting the sales price where you want it to be. Be sure when you are reviewing the contract that there are no unwanted products/services "stuffed" into your out the door amount.

Your cost should include Sale Price, TT&L, a Documentation Fee (usually in the $250-$400 range) and that's it!
Of course, if you decide to buy an extended auto warranty or other products/services there will be charges for those, but be sure you know exactly what you're getting and how much it costs before you leave the finance office. All in all this should be an easy process, but don't hesitate to contact me if you've got any further questions.

Question: Thank you so much for your reply. This is really helpful! I am in the process of looking for a MINI Cooper, and I have been doing a bit of research, but it is really helpful to have the advice of an expert.

From what I have been reading the best bargaining position is to do it through email without going in to the Dealership, but everyone I contact immediately tries to get me to come in in person to discuss. As you mentioned, given I will not be financing with them that should hopefully save some money.

I've heard that MINI's tend not to sell for much below MSRP, but I am definitely going to see what I can negotiate. Thanks again for your feedback Justin.


Answer: Yeah, with MINI's you're probably not going to be able to buy them for invoice, but if you get multiple quotes online with Yahoo! Autos, then that will definitely help to get the dealers competing.

As for trying to get you to come into the dealership, that's very common. They lose money trying to negotiate deals via email or over the phone. I don't think dealers have the option of not giving you quotes if you go through Yahoo! Autos.

Good luck,

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