Is a car purchased from a used car lot lower when paid for by cash rather than financed?

The sales price is $40k.

You either pay 40k then or finance 40k over X years, which will cost more.

Buddy of mine's philosophy was to negotiate a financed price then demand the same price via cash. Idea being that the car companies would go lower on their price if they were getting a cut of the finance deal. That was new cars and probably 25 years ago, so YMMV.

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Is a car purchased from a used car lot lower when paid for by cash rather than financed?

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If you are talking about agreed purchase price then no. The used car lot makes money off of financing. If you tell them you are paying cash then they actually might try to stick at a higher price because they know they won’t make finance charges off of you.

New cars it’s sometimes better to get it financed because there may be incentives to have it financed which reduces the purchase price. Then when the first note comes, just pay it all off. You just have to make sure that the loan doesn’t have a penalty for early payoff.

If you do a cash buy the dealer might go lower because they’ll cook the books.

Usually, yes.
You should not finance anything with those types of places.
To be clear, I'm talking about the "Buy here, pay here" type dealers.

The simple answer is cash/check payment is not a positive for a dealer since they make money on the backend also. You should not let them know you are a cash buyer until after the OTD (out the door) price is finalized. Deflect any discussion of financing.

Unless it is a buy here pay here type of dealer they aren't getting their money monthly, it comes from the company writing the loan so there is no incentive in time other than a few days.

Never flaunt being a cash buyer or already bought at the bank that just lets them know they have to get all their profit on the front end.

Never discuss what payment you are looking for and never say yes to any of their queries about if X will get you to go over the curb today.


Go in with a set number in mind and don't bend on it, it is easy to do but if you weren't willing to pay a higher amount sitting at home why should you change your mind? Go in do the test drive, don't let them pull your credit (even a "soft pull"). If you still want the car sit down and negotiate toward a OTD price, deflect financing. Refuse to pay for any of the bullshite add-ons (unless you actually want them) just barrel through to the OTD price. If you can come to an agreement then steel yourself for the F&I round. Just barrel through all the extended warranty bullshite and get to the point you write a check. If you want an extended warranty do your research and have a price for the ones you can buy to compare to the dealership options. You have to walk in fully ready to walk out on any deal.

Knew a guy that when he was ready to buy a car (new or used) he’d find what he was looking for then go to 3-4 places

He’d tell them to give him their lowest possible price.

Afterwards he’d pay cash and buy from the lowest priced place.

He said a few times other places would call him back and ask why he didn’t let them beat the lowest price he got quoted. He’d tell them I asked for your lowest up front if you could do better than you didn’t give it to me to start with.

If we are talking about a dealer, telling them you will pay in cash is a huge negative to them as they make money on both ends of the deal.

Usually if you talk it out, they will want you to take their financing for X number of days until you pay it off in full to get the lowest possible price.