Honda Car Forum

Hello,

I plan to buy a new sedan (probably a Honda accord or
a Toyota Camry) within a month's timeframe. I don't have
a car now, so there's no trade-in. I plan to pay full
in cash hopefully expecting the payment less than $22k
out the door for an Accord LX-SE or a Camry LE, both
with a four-cylinder engine and AT.

I have been gathering information online from websites
such as edmunds.com and carsdirect.com and finding
out "fair" market values of those new sedans. However,
I couldn't find information from them about any additional
buying power of cash buying.

Do those fair or market prices of new cars reported on
websites include the bargaining power of cash buying,
if any? Or, do I have some more room for negotiation by
telling them I am paying in cash?

Thank you in advance for opinions and advices.

kwon22@gmail.com wrote:
> Do those fair or market prices of new cars reported on
> websites include the bargaining power of cash buying,
> if any? Or, do I have some more room for negotiation by
> telling them I am paying in cash?

There isn't any 'bargaining power' for cash. New car dealers would
really prefer for you to finance the car; in many cases they make more
money from the financing side of the transaction than they do from the
margin on the sale of the vehicle.

<kwon22@gmail.com> wrote in message
news:1146435196.828310.124020@i40g2000cwc.googlegr oups.com...
>Do I have some more room for negotiation by
> telling them I am paying in cash?

Unless the dealer gets a benefit from doing the finance, they get paid
either way, which is all they want. Just tell them you don't need finance
and have no trade-in. Some dealers might be leary of a customer literally
walking in with a bag of cash.

SD

From my reading about negotiating for a car at a dealer, I
don't think paying cash on a car gives one much, if any,
actual "bargaining power." I don't think I've ever seen it
talked about in any car buying article, either.

The advantage one does get is that the salesperson can't try
to deceive you with financing numbers. E.g. I understand a
common tactic is for the salesperson to say to the buyer,
"How much can you afford a month in car payments?" That puts
the cart before the horse, compelling the (naive) buyer to
come up with a monthly figure, and then the darned
salesperson can adjust the months of paying until a montly
sum is found that the buyer can "afford." Meanwhile, the
actual price of the vehicle gets lost in the discussion!

I think the vehicle price is the first thing a savvy buyer
will identify, once it comes time to crunching numbers.

I suspect that dealerships in general actually prefer people
to finance their cars. That's where they make much of their
money, ISTM. My understanding is it's such big business that
General Motors, for one, has a whole bank yada now as a
branch of its business, called General Motors Acceptance
Corp. IIRC. (I know about it because four years ago, never
having owned a GM anything, I bought some short-term, then
investment grade GMAC bonds.)

I see a lot of posts from people saying they solicit prices
for cars over the internet (with email) from individual
dealers. It seems one can actually pit one dealer against
another as far as pricing goes (though you have to get in
writing that Dealer X really intends to sell you what you
want, etc.). I think Edmunds.com can facilitate the
solicitation of prices. One evidently can avoid most or all
of the pressure of facing a salesperson this way.

Do see Consumer Reports April Car Buying issue for the
latest tips on getting the best price on a car.

<kwon22@gmail.com> wrote
> Hello,
>
> I plan to buy a new sedan (probably a Honda accord or
> a Toyota Camry) within a month's timeframe. I don't have
> a car now, so there's no trade-in. I plan to pay full
> in cash hopefully expecting the payment less than $22k
> out the door for an Accord LX-SE or a Camry LE, both
> with a four-cylinder engine and AT.
>
> I have been gathering information online from websites
> such as edmunds.com and carsdirect.com and finding
> out "fair" market values of those new sedans. However,
> I couldn't find information from them about any additional
> buying power of cash buying.
>
> Do those fair or market prices of new cars reported on
> websites include the bargaining power of cash buying,
> if any? Or, do I have some more room for negotiation by
> telling them I am paying in cash?
>
> Thank you in advance for opinions and advices.
>

"Stewart DIBBS" <sjd@pixcl.com> wrote
> Some dealers might be leary of a customer literally
> walking in with a bag of cash.

Reminds me of a post here that not long ago reported on a
guy who walked in with a bag of cash IIRC containing exactly
how much he was willing to pay for a vehicle he knew the
dealer had. The guy then said to the salesperson: With every
five minutes that goes by, I am taking $100 off the price I
am willing to pay...

Elle wrote:
> "Stewart DIBBS" <sjd@pixcl.com> wrote
> > Some dealers might be leary of a customer literally
> > walking in with a bag of cash.
>
> Reminds me of a post here that not long ago reported on a
> guy who walked in with a bag of cash IIRC containing exactly
> how much he was willing to pay for a vehicle he knew the
> dealer had. The guy then said to the salesperson: With every
> five minutes that goes by, I am taking $100 off the price I
> am willing to pay...

Damn!! I've paid cash for cars, and agree that the dealer isn't happy
about it. The salesman himself doesn't mind, he is more assured that
he'll see his commision because financing won't fall through.

But it never occurred to me to use this technique. The only problem
is, you have to really research and have a good idea what the car will
go out the door for. Otherwise, you run afoul of the First Lesson In
Negotiating: The person who names the first figure loses. I
negotiate settlements as part of my job, anywhere from a few thousand
to hundreds of thousands, and I guarantee this is true unless you
really know what your doing. And occasionally, you'll have to be
prepared to walk out.

In article <1146435196.828310.124020@i40g2000cwc.googlegroups .com>,
kwon22@gmail.com wrote:

> However,
> I couldn't find information from them about any additional
> buying power of cash buying.

No additional power.

The additional power is in letting them think they're going to finance
the deal. They get a commission for selling the financing. If they
know they won't be selling any financing, they'll try to make that up by
keeping the price of the car higher.

<jmattis@attglobal.net> wrote
> Elle wrote:
>> "Stewart DIBBS" <sjd@pixcl.com> wrote
>> > Some dealers might be leary of a customer literally
>> > walking in with a bag of cash.
>>
>> Reminds me of a post here that not long ago reported on a
>> guy who walked in with a bag of cash IIRC containing
>> exactly
>> how much he was willing to pay for a vehicle he knew the
>> dealer had. The guy then said to the salesperson: With
>> every
>> five minutes that goes by, I am taking $100 off the price
>> I
>> am willing to pay...
>
> Damn!! I've paid cash for cars, and agree that the dealer
> isn't happy
> about it. The salesman himself doesn't mind, he is more
> assured that
> he'll see his commision because financing won't fall
> through.
>
> But it never occurred to me to use this technique. The
> only problem
> is, you have to really research and have a good idea what
> the car will
> go out the door for. Otherwise, you run afoul of the
> First Lesson In
> Negotiating: The person who names the first figure
> loses. I
> negotiate settlements as part of my job, anywhere from a
> few thousand
> to hundreds of thousands, and I guarantee this is true
> unless you
> really know what your doing. And occasionally, you'll
> have to be
> prepared to walk out.

Right. I don't think I'd ever have the guts to use this
approach. Or it would have to be a very special situation
where, like you say, for one, I knew the car cold and was
prepared to walk out.

<kwon22@gmail.com> wrote in message
news:1146435196.828310.124020@i40g2000cwc.googlegr oups.com...
> Hello,
>
> I plan to buy a new sedan (probably a Honda accord or
> a Toyota Camry) within a month's timeframe. I don't have
> a car now, so there's no trade-in. I plan to pay full
> in cash hopefully expecting the payment less than $22k
> out the door for an Accord LX-SE or a Camry LE, both
> with a four-cylinder engine and AT.
>
> I have been gathering information online from websites
> such as edmunds.com and carsdirect.com and finding
> out "fair" market values of those new sedans. However,
> I couldn't find information from them about any additional
> buying power of cash buying.
>
> Do those fair or market prices of new cars reported on
> websites include the bargaining power of cash buying,
> if any? Or, do I have some more room for negotiation by
> telling them I am paying in cash?
>
> Thank you in advance for opinions and advices.

I would recommend that you do not mention how you intend to pay for the car
until after the price is negotiated. Dealerships can make additional money
by arranging financing or leasing for the buyer and selling extended service
contracts, in addition to selling dealer installed accessories like pin
stripes, paint and interior protection, etc.
--

Ray O
(correct punctuation to reply)

I am alway quiet about my plan to pay cash for a car. But when I was buying
my Honda the salesman guessed it. I don't think it really makes a
difference one way or the other. Each part of the dealership is a profit
center and they all know how much money they need to make from a
transaction.


"Ray O" <rokigawa@tristarassociatesDOTcomn> wrote in message
news:36904$44554175$180fead6$17241@msgid.meganewss ervers.com...
>
> <kwon22@gmail.com> wrote in message
> news:1146435196.828310.124020@i40g2000cwc.googlegr oups.com...
>> Hello,
>>
>> I plan to buy a new sedan (probably a Honda accord or
>> a Toyota Camry) within a month's timeframe. I don't have
>> a car now, so there's no trade-in. I plan to pay full
>> in cash hopefully expecting the payment less than $22k
>> out the door for an Accord LX-SE or a Camry LE, both
>> with a four-cylinder engine and AT.
>>
>> I have been gathering information online from websites
>> such as edmunds.com and carsdirect.com and finding
>> out "fair" market values of those new sedans. However,
>> I couldn't find information from them about any additional
>> buying power of cash buying.
>>
>> Do those fair or market prices of new cars reported on
>> websites include the bargaining power of cash buying,
>> if any? Or, do I have some more room for negotiation by
>> telling them I am paying in cash?
>>
>> Thank you in advance for opinions and advices.
>
> I would recommend that you do not mention how you intend to pay for the
> car until after the price is negotiated. Dealerships can make additional
> money by arranging financing or leasing for the buyer and selling extended
> service contracts, in addition to selling dealer installed accessories
> like pin stripes, paint and interior protection, etc.
> --
>
> Ray O
> (correct punctuation to reply)
>