How to Buy a Car With Cash

by Barb Nefer

Buying a car with cash means that you don't have to worry about qualifying for a loan and potentially paying a high interest rate. What you may not realize is that paying with cash may negatively affect your bargaining position. According to the Auto Advice website, many dealers count on making extra money from the financing; if they know a buyer plans to pay with cash, they may not be as willing too negotiate. You can still get a good deal if you follow certain steps when buying a car with cash.

Do your homework before visiting dealerships and determine a fair price for the type of car in which you are interested. If you are buying a new car, you can get invoice information from websites like Kelly Blue Book and Edmunds. If you are buying a used car, you can find comparable vehicles on Auto Trader, Autobytel and Craigslist.

When you start visiting dealership to look at cars and the salesperson asks how you plan to pay, tell him you haven't decided yet. If he presses you, say that you'd rather focus on finding the right car first and that it's too early to talk about the payment.

If the salesperson asks how much of a monthly payment you can afford, tell her that you are only interested in talking about the actual price, not about payments. Salespeople like to discuss car prices in terms of payments because they can more easily mask hidden costs.

Negotiate a final price for the car and get it in writing before telling the salesperson that you will be paying cash. If he tries to back out of the deal, be prepared to walk out of the dealership. You may love the car, but there are plenty more at other dealerships. No car is worth being overcharged.


  • check If you get pre-approved for a car loan from your own bank or credit union, a dealer will view this in the same way as a cash deal. Even though you are financing the purchase, he won't earn any additional money from the transaction if you arrange it on your own. Follow the same steps that a cash buyer would and don't tell the salesperson that you are pre-approved until you have negotiated a final price for the car. Some dealers will try to boost their profits through dubious charges added on top of the negotiated car price. The most common is the documentation fee, which can run several hundred dollars. Dealers will claim it covers paperwork, but it is really profit. In some states, they will claim they are required by law to charge it. This may be true, but they can deduct the amount from the price of your car to offset it. If they refuse to do so, walk away from the deal.

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About the Author

Based in Kissimmee, Fla., Barb Nefer is a freelance writer with over 20 years of experience. She is a mental health counselor, finance coach and travel agency owner. Her work has appeared in such magazines as "The Writer" and "Grit" and she authored the book, "So You Want to Be a Counselor."