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  • Why buying a car with cash may not be the best idea

    AUTHOR: CARLEADO DATE: December 13, 2020

    What they do not understand is the dealer may actually prefer a financing deal as the majority of the money made on a car sale is on the financing end. A cash deal would not generate the same revenue for the salesman so they are likely to give a smaller discount. Salesmen will never say this, instead they will offer a very small discount which many people take thinking they are getting a deal. Now, we are not saying that financing a vehicle will cost less. In the long run it will cost you more just based on the cost of borrowing money (interest), but the upfront cost of the vehicle may be a better deal if you finance through the dealership. Many dealerships will even sell cars at cost or at a loss to reap the rewards of the financing deal that would cost you more in the long run. So if you have the disposable cash to spend on a vehicle then by all means that is the best option. But if you are making a cash offer for the sole reason of getting a better deal, then it may not be the best move.