Why buying a car with cash isn’t a negotiation tactic.

August 26th, 2021 by

Many people have fallen prey to an assumption that, while possibly true in the past, is certainly not relevant in today’s market. Telling your salesman that you’re paying for your car in cash isn’t the power move that you may think it is.

the dashboard of a nice car in Edmond, Oklahoma

There’s absolutely nothing wrong with buying a car with cash. In fact, for some people it’s the absolute best way to go. What is isn’t, however, is a thing to say to your salesman in an attempt to “sweeten the deal” or barter. When you tell us that you’re paying for your car with cash in an attempt to get a lower price, it’s telling us that we might not make any money from this deal.

two people shaking hands while smiling inside a dealership

It’s critical for both parties to benefit from a transaction, and given financing provides the brunt of a dealership’s profits, paying cash isn’t the incentive to offer a lower price that you may think it is.

signing a purchase agreement at our edmond dealership

In order to stay in business, we need to make a profit from our sales. We don’t get greedy with our pricing, and we try to provide our best price up front and on our website. You’ll still get the same five-star treatment paying cash as you would were you financing with us, but it’s imperative to understand that telling us you’re paying with cash isn’t a negotiation chip in your pocket that’ll change the amount we need to make to keep this small business running.

a calculator in front of a yellow background

Here at the John Vance Auto Group in Edmond, Oklahoma,  we try to be as open and transparent through the entire car-buying process as is humanly possible, and that extends to helping dispel misconceptions about what creates leverage in your purchase. When we’re all on the same page, it allows for everyone to have a level playing field and helps erase any feelings of hoodwinking or subterfuge.

two people high-fiving in an office setting

As it can be to your advantage to finance, we did want to provide some perspective on why you benefit from financing your car purchase. One of the most important factors in your financial landscape is liquidity. The ability to use or invest your cash reserves in savings or emergency funds is worth paying an additional 3.5% in financing interest if it means you can keep your cash reserves up. Obviously everyone is coming from a unique situation, but these general principles apply to most scenarios we see.

 

It can be intimidating signing up for a few years worth of payments, but knowing that you’re financially prepared for any occurrence between now and the end of your loan is a very reassuring bit of knowledge.

 

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