How to buy new car for cash...
September 13, 2013 4:28 PM   Subscribe

I plan on buying a car in the next few days, for cash. My question is when do I pull out the checkbook and announce that I am not financing but want to pay by personal or cashier’s check? A few more details, of course...

I will be following the excellent advice on how to negotiate for the price I am willing to pay...

My financial institution will not issue cashier’s checks on the weekends.
Is it reasonable for me to negotiate and sign papers this weekend but not deliver a Cashier’s Check until Monday or Tuesday?
I would actually like to pick up the car on Wednesday.
When do I tell the Salesperson this information?

Will they request a deposit to hold the car & price?

In CA, [Los Angeles County] what pieces of ID does a dealership need for a cash purchase? My CA Drivers License?
My Social Sec. Number?

Will they want to see my bank balance by logging in on their computer?
Would a ATM receipt from the morning be sufficient?

Thanks for your experience/advice!
posted by calgirl to Work & Money (19 answers total) 8 users marked this as a favorite
Best answer: For what it's worth, I simply paid with a personal check and drove the car away. I asked if the salesperson had any preference in payment. The salesperson indicated there isn't significant risk for the dealership, because if I had intended on stealing the car, the dealership already have sufficient information to take the car back from me.

As a general question here, you seem to think there are "rules" to buying a car. There aren't. Simply tell the salesperson what you want to do... and do it. So long as money gets to their account, the dealership isn't going to complain about how the deal is architected. If you want to pick the car up on Wednesday, show up on Wednesday with a check for what you want the price of the car to be and drive it away. The more you visit the dealership and the more you plan the transaction, the more you show the dealership you are vested in the transaction. The more vested you appear, the more the dealership will attempt to charge you for the car.
posted by saeculorum at 4:35 PM on September 13, 2013

My dealer took a personal check for deposit and a cashiers check for the balance. No advice on when to break it to them that you are paying cash, i had a no haggle price. They wanted me to finance for a month to get some incentive, but i declined. You'll have to weigh offers like this.

Typical advice you read on the internet is to negotiate the final price first, and rebuff any attempts to start the negotiations on a monthly payment. And to announce you'll be paying cash after everythings decided, since they make significant money from the financing.
posted by TheAdamist at 4:39 PM on September 13, 2013

You want to get the best deal possible? Use FightingChance. Seriously tips the balance of power in your direction. You will know you got the best deal you could get.

I've used this, my daughter has used it. Will not ever buy a car without it again.

When I bought my last new car this way, one of the salesmen I talked to on the phone said they read my email to the entire sales team. They got a huge laugh because I was telling them information they didn't even know.

Oh, and yes it will explain when to tell the dealer you're paying cash.
posted by trinity8-director at 4:45 PM on September 13, 2013 [10 favorites]

I've done this twice and paid with a personal check both times. They're a dealership, not Craigslist. They'll figure out how to get your money out of you if you write a bad check.
posted by jabes at 4:47 PM on September 13, 2013 [1 favorite]

I tried to buy a car with a personal check and was scoffed at. They actually looked at me like I was crazy and said that no, they'd need a cashier's check. Don't rely on a personal check as your payment method.
posted by brainmouse at 4:48 PM on September 13, 2013

I paid for my last new car with a personal check. It was a fairly expensive car (not 6 figures, but close), and they didn't bat an eye, nor did they ask to do anything like call the bank, see statements, etc. Easy.
posted by primethyme at 4:50 PM on September 13, 2013

I bought my current car with a personal check. In fact, we drove it off the lot on the day we picked it out (a Sunday, I think), and I went back a few days later with the actual check. We had filled out a credit application for them to hold on to in case we didn't turn up, and they gave it to me to destroy when I provided payment.
posted by Lulu's Pink Converse at 5:14 PM on September 13, 2013

I too paid for a brand-new car with a personal check. Admittedly, it was for a bit over half of the total price, then I financed the rest; but no problems whatsoever. I just whipped out my checkbook, wrote the check and handed it over.
posted by easily confused at 5:37 PM on September 13, 2013

I bought a car in Los Angeles County (Santa Monica Subaru) a few years ago and paid with a personal check. The only ID they asked for was my driver's license (but thinking back, I believe they had already photocopied it when I took the car for a test drive). They even allowed me to future date the check 3 days so I could transfer the money into my checking account.
posted by aviatrix at 5:39 PM on September 13, 2013

Best answer: My husband used to sell cars.

I just asked him. He said...well, let me scoot over and let him take the keyboard:

Ok do you have a trade also? If so use that too.

here's what to do: Negotiate the price not the payment. Let them think you are going to finance this will cause them to put the profit on the "back side" removing it from the "front side" the back is warranties, undercoating, financing etc. The front side is profit on the vehicle dealerships are very willing to give away the sales person's commission by removing this profit. So you negotiate the price of the car, letting them think they are getting profit on the back. Then once the price is set you hit them with your trade and cash. An alternative is to negotiate the same, signing for whatever interest they want to hit you with (thinking are making a huge profit) and pay the car off the next day. Also understand the time of the month matters. If the sales throughout the month are good they buy at the first of the month when they are after numbers sold hang the profit in these months the last week is made up of profit taking and there will be no good deals at the end of the month. Again also buy your vehicles on a rainy Tuesday night. They'll be desperate to get "a mark on the board".
posted by St. Alia of the Bunnies at 8:09 PM on September 13, 2013 [4 favorites]

Best answer: I bought a car in LA County and paid the deposit with a personal check, no questions asked. Also, there won't be any rainy Tuesdays here for at least a couple months. :-)
posted by amapolaroja at 12:16 AM on September 14, 2013

Check with the dealership ( anonymously if you prefer) as to whether they accept personal or cashier's checks. We recently paid cash for a one year old car and the dealership did not accept cashiers checks. Personal checks only--they subscribe to a service that clears personal checks immediately and transfers it into their account (essentially a debit service). When asked why not cashier's check--they said they lost one BMW and a Mini to bad cashiers checks as they can not be immediately verified. BTW, I agree, negotiate the price and then state payment method.
posted by rmhsinc at 4:48 AM on September 14, 2013

I paid cash for the last vehicle with a debit card, having already stopped by my bank a few days prior and gotten the limits lifted off it. Only as we were driving it away did I realize I should have charged it on my credit card instead and got a crapload of points, then paid it off when the bill came in.
posted by Mary Ellen Carter at 6:15 AM on September 14, 2013

I had cash on hand, but I financed it anyways. And then I paid it after three months. I can't remember why, exactly, I did that (it was in 2007), but I think the dealership might have been a little more comfortable with it given my circumstances.

At the time, I didn't have great credit because I had next to no credit history, so perhaps that might have played into it (building a credit history, although the account didn't stay open). But I had also just won on Jeopardy, so I was more than capable of just throwing cash at them.

Point being: there may be reasons to do it like that.
posted by Madamina at 7:02 AM on September 14, 2013

We paid cash for a new car in 2010, and waited until they'd done the "lets see what the interest rate/lowest price we can get you" stuff was over, and also after we had agreed on what the trade in was worth. I wrote a personal check and drove it away that day, but it took the check a week to clear since we had to transfer the money around. They had collected enough info about us to be fine with us leaving with it.
posted by Mimzy at 8:19 AM on September 14, 2013

Best answer: We bought a new car last month, and our paying the whole thing in cash would actually have cost us MORE than financing part of it.

Essentially, they pointed out that they'd give us $1500 off if we financed through them instead of paying cash. We looked at the paperwork and saw it explicitly stated that there was no penalty for paying the amount off early, so we financed the minimum amount ($5000), paid the rest by wire transfer, and sent them a check for the amount that was financed just last week. They made around $50 off of us in interest, and we got $1500 knocked off the price of the car.

Also, by the time we finished negotiation at around 6PM and were ready to call the bank and arrange a wire transfer for the part that wasn't financed, we found that the department at the bank that does that closes at 5PM, although every other branch closes at 7, and they didn't tell us that when we called in earlier in the day to find out how to do it. The salesman, wanting to get the sale confirmed, I believe, told us to go ahead and drive it home, and transfer the money the next day, which we did.

Of course, they already had all our info and our credit reports and whatnot, but we did spend the next several hours going "They just let us drive off the lot! For no money! Like we were grownups or something!"
posted by telophase at 6:26 PM on September 14, 2013 [1 favorite]

Response by poster: This is all great advice...thanks especially to Mr. Of The Bunny.
I do know that paying cash is NOT a bargaining chip, but I wanted a sounding board for WHEN, exactly, I need to get this information on the table.
My instinct when dealing with salespeople is to be very upfront and to put all of my cards down on the table and to walk away when necessary.
Obviously, this will not work for new car purchasing!
thanks as always...
posted by calgirl at 6:37 PM on September 14, 2013

Best answer: Another former salesman here (and there is plenty of other advice in my posting history if you want some). To answer your specific questions:

When do I pull out the checkbook and announce that I am not financing but want to pay by personal or cashier’s check?'

As long as you're convinced it won't be a bargaining chip (and I don't think it will be), it doesn't really matter. Once you've agreed on the price, the salesperson will probably ask you how you're going to pay for it so they can get the deal ready for the finance office where they try to sell you more stuff and take care of the official paperwork for you to buy the car. If they don't ask, after you've agreed on the price is probably the best time to bring it up. The finance manager will be kind of ticked at the salesperson if you go into his office and no one knows that you're paying cash until then.

They'll either take a personal check for the whole price and you can take delivery then if you want. Or, if you don't want to take delivery that day or they require a cashier's check, you'll write them a check for a token deposit (usually $100 when I was a salesperson) and the finance manager will do their song-and-dance and tell you how much the cashier's check needs to be made out for. Once you have "money in the till" they won't sell the car to anyone else. If, for some reason, you change your mind you can still get your deposit back.

They might take a personal check because it probably takes longer to do the title work than it does for your check to clear. If it doesn't they still technically own the car and they'll come and take it back. I actually went with my dad (who has almost been in the car business long enough to have taken horses in on trade) once to take back car where that happened and the guy had been dodging them instead of bringing the car back.

Is it reasonable for me to negotiate and sign papers this weekend but not deliver a Cashier’s Check until Monday or Tuesday?

Totally reasonable but they'll probably have you go over and sign the bulk of the paper work on they day you're actually taking delivery.

I would actually like to pick up the car on Wednesday.
When do I tell the Salesperson this information?

Sometime between when you answered the big closing question (some form of, "If the numbers work, will you buy the car?") and enter price negotiations and when you go into the finance manager's office.

Will they request a deposit to hold the car & price?

Yes. The aforementioned $100 and you'll get it back if you change your mind.

In CA, [Los Angeles County] what pieces of ID does a dealership need for a cash purchase? My CA Drivers License? My Social Sec. Number?

Just your driver's license, but I wouldn't be surprised if the title application needs your SSN.

Will they want to see my bank balance by logging in on their computer?

Almost certainly not. If they have some reason to question whether or not you have the funds, they'll ask for a cashier's check.

Would a ATM receipt from the morning be sufficient?

It can't hurt but I doubt it will be an issue.

You can totally have them take out a loan and then pay it off immediately, just make sure that there isn't a pre-payment penalty or origination fee. If you wiggle them into giving you another $100 of the price but then have to pay a $150 origination fee you're not saving anything. You'll also want to call the bank right away on Monday to pay it off.
posted by VTX at 7:29 PM on September 14, 2013

Best answer: Oh, and I asked my dad (as he was a finance manager at one point) and if you take out the loan and pay it off within 30-days, the dealership doesn't get paid so don't tell them that's your plan.

Also, it takes two-three weeks for the paperwork to get processed at the bank so you won't really be able to pay it off for a until the bank knows you have a loan with them and the interest will be accruing all the time.

Lastly, on a new car, the money that the dealer makes for financing the car is some percentage (his best guess is 0.5%) of the amount financed but capped at $200 so even if you can get a better deal this way, it won't be all that much better.

Those numbers apply to a Honda finance through Honda Financial (my dad currently works at a Honda dealer). If financed through some other bank, the dealer makes money based what percentage they sell you on the loan over and above the "buy rate" that they get from the bank.
posted by VTX at 7:56 PM on September 14, 2013 [1 favorite]

« Older Coaster no-go doesn't have to blow!   |   What is the name for the irregular objects that... Newer »
This thread is closed to new comments.