Do Car Dealerships Accept Cash? (Getting The Best Deal)

If this happens to be your first time using cash to pay for a new set of wheels, you may not understand how it all works. Before we get too ahead of ourselves, we need to answer the obvious question, do car dealerships accept cash? 

Physical cash will not be accepted by most car dealerships. Instead, you should pay with a personal check or using verified funds such as a Cashier’s Check. This will be the safest option of payment for both parties. 

There will be dealerships that would accept cash, however, it is not recommended to walk into one with a briefcase full of cash. 

Alternatively, you should test drive the car you want to purchase, set a price, sign the deal and use your checkbook to get the deal finalised. Avoid the suitcase just for the sake of looking cool!

Do Car Dealerships Accept Cash (Getting The Best Deal)

6 Tips To Get The Best Deal Possible Using Cash

Now that you know you can use a Cashier’s Check, this leads us on to how to get the best deal in a dealership. Using cash will give you options and negotiate power. 

These are the top six tips for negotiating the best deal possible when using cash at a dealership.

Research Cars

Before you even think about entering a dealership, you should research the sort of car you are looking to purchase. If you do not have a car in mind then you should think about what you are using it for and go from there.

Is the car just for you or do you need to drive your family around? Do you need it to get around town or are you interested in long trips?

You should also decide whether you want a new car or a used car. Used cars will cost less and lose their value at a slower rate than new cars but there will be less options to choose from and these cars will typically have a shorter warranty.

Don’t Reveal That You Are Paying Cash

Choosing to finance a vehicle is the best case scenario for a dealership when selling cars. Why? It gives them a revenue stream.

In other words, if you want to get the best deal possible, don’t announce that you will pay cash right away. In fact, don’t reveal it until the very last moment.

When a dealership offers a good deal on a car because they assume you will be financing, they are making a mistake.

It is not my intention to suggest that you lie. You should be honest with a salesperson if they directly ask if you will pay cash or finance. To trick them isn’t the goal since it’s their livelihood. Just saying, you don’t have to announce it unprompted.

Negotiate Your Out The Door Price

There is no tax, title, or fee included in the sale price of a car. When you pay cash, if you do not factor in these costs, you will almost certainly go over budget.

Whenever you negotiate a deal with the dealership, make sure you negotiate the ‘out-the-door price’ as well. Make sure you use that phrase exactly. Including all additional costs, this is the total amount you are willing to pay.

Because these additional costs only add a few dollars to a monthly payment, it’s easy to overlook them when people finance a car. Nonetheless, when you pay cash, you need to know the exact amount that you will be paying – even to the cent.

Buy At The Right Time Of Month And Year

Salespeople, and dealerships as a whole, will often receive incentives if they sell a certain number of cars each month. This means that towards the end of the month, they will be more inclined to negotiate on the price of your car to suit their incentive quota. 

Therefore,if you want to receive the best deal possible, you should wait until the end of the month before you purchase your car.

However, it is not advised to wait until the last day of the month because by this point, they may have little incentive to give you a good deal. 

Dealerships as a whole will often receive yearly incentive deals. Therefore, to again improve your chances of getting a good deal, then you should wait until the last few days of the year.

Stand Your Ground

Everyone is a sucker for that new car smell. When you walk into a dealership full of new, shiny cars, it can be easy to forget about your budget and splash the cash on a new car.

As well as this, you have salespeople that will be trying to convince you into buying more expensive cars. So how are you supposed to stick to your budget? The answer is simple. You need will power, and you are going to need a lot of it. 

When you reach the point of paying cash for your car, do not flirt with the idea of financing. Don’t be tempted by the smell of a new car that is outside your price range. Remember your budget and stick with it with all your might. 

Having cash grants you power, use it.

Reject Add-Ons And Warranties

This may surprise you, but one of the lowest profit items in a car dealership is the cars. Yes, you heard that right. Dealerships make most of their money from financing and through warranties and add-ons.

Although these might sound enticing, as a cash buyer you should avoid them,

Just think about it, if warranties were not incredibly profitable, they would not offer them to you. If you happen to have a fault within your warranty then it may feel good, but if your warranty costs more than fixing the issue, then is it really worth it. 

Furthermore, do you believe that dealerships just randomly come up with the price of their add-ons? No. The prices are set based on large amounts of data to ensure they are highly profitable. 

The benefits of paying cash means that the dealership cannot sell you a warranty as you are paying for everything in full. If your cash should go to anything, it should be to the car and not to add-ons that you will most likely never use.

Frequently Asked Questions

Does Using Cash Grant You A Better Deal?

Using cash will get you a better deal. Firstly, you will not be paying interest on any car loan which will save you money.

Secondly, being a cash buyer means that you will be able to move through the process quicker than someone that chooses finance. This is especially helpful when you are negotiating with a private seller.

Do Dealerships Prefer Cash Or Financing? 

In correlation to what was mentioned earlier, dealerships often prefer financing due to the increased profits they can make on these deals. Financing allows for the incorporation of add-ons and warranties which further increase the profit on the sale.

Additionally, financing allows dealerships to sell more expensive vehicles than a cash buyer would typically be able to afford. 

Are There Risks Involved In Using Cash?

Buying a car with cash and handling large amounts of money could tempt employees to steal your funds. Whilst it is unlikely for dealership employees to commit theft, it is safer to keep on site cash to a minimum or just use electronic funds, especially in the transfer is in the tens of thousands of dollars. 

Final Thoughts

You should fully know by now why it is more effective to pay for a car using a cash payment. Therefore, if you have the funds to be able to facilitate purchasing a car with cash, I heavily advise you to do this. 

The important thing to remember when purchasing a car with cash is choosing a budget and sticking to it.

Walking into a brand new showroom full of high end cars can make it very easy to be tempted into buying a car that is out of your price range. Be responsible and pick a car well within your budget.

Deborah White