DON’T PAY CASH AT CAR DEALERSHIPS! (Here’s Why)
You should NEVER pay cash at a car dealership if you want the best deal! This video explains why…
If you’ve saved up money to buy a car in cash, congrats, that is a GOOD thing!
However, most people think that paying for a car with cash is actually a negotiating chip when it’s not.
Dealerships are not incentivized in ANY way for you to pay cash for their car (other than kickbacks and sales bonuses from the manufacturer).
You paying cash will actually result in you potentially paying MORE for the car!
Watch until the end to hear how I prefer to buy cars!
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My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos are a reflection of my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort in every video that I make. I also believe in complete transparency and open communication with my audience.
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*Do you pay cash for cars, or do you finance and invest the difference?*
Question… does the dealership make money from the simple act of opening a loan? So even if we pay it off within that first month, is the dealership still making some sort of $$ from starting the paperwork?
For cars under $10k I pay cash. Anything above that I like to get low interest loans and no money down pay huge payments each month
I pay cash. However on my motorcycle I financed, because it was 0% finance.
7:59 never get GAP through the dealership. If you want GAP, either go to your credit union or better yet your insurance carrier.
Pozdrav brate Srbine 🙂
Lowkey so much value in this video
Thanks Brian!
*HighKey…
Greeaat video, learned a lot…
Unreal. 🤦♂️ what a stupid video with stupid information. But ya go ahead and buy a car from an individual party.
Not at all
What I took away from this segment was rich people buy assets and poor people buy loans.
– 👍 Spot on brother fantastic video.
Hadouken Hadouken or… rich people don’t NEED loans, because they’re…RICH
Depending on what rate you get your financing, it may sometimes make sense to go with the financing for instance 0 percent (if your lucky) to say 1.9 or 2.9%, say rather than pull from your 401k or if your really savvy like me and index fund, they net between 5-10% for the amount you have in there. Your money better serves you in the index/401k, then if you were to take it out and pay cash to avoid the 2.9% (average financing for good credit).
This is a HUGE takeaway, thanks for this insight
I took out a totally unnecessary loan for a car in January. Low interest rate and didn’t put a single dollar down cause my credit is perfect. Didn’t need a loan but figured it might be smarter to keep the extra cash on hand for other investments…
Fast forward to June… More than doubled all that cash on the stock market and my loan interest rate is now less than most inflation projections because of covid stimulus money printing.
A Car is one of the fastest depreciating assets around
Amazing advice, I paid cash for a used BMW at a dealership and fell into the same traps you outlined in this video. It is old school thinking to believe that telling them you are paying cash will help you negotiate!
All the dislikes are from car dealerships salesman 👨💼
plus ppl from a family with no cash for decades. To build a debt-free and disciplined positive cycle, all family members will have to sacrifice spending and quality of life, and after 2-3 generations they eventually have enough cash reserve. But do ppl enjoy suffering and waiting decades? Absolutely not. Most will demand everything right now, not waiting even a day. It’s hard to go back to the pre-credit-card ages.
I disagree with your comment. I’m a salesperson and I agree to what he said .. i tell my custumers about this all the time
@@mingchi1855 Agreed, but it only takes one generation to change. My wife and I both came from families where our parents were in debt their whole lives. It motivated us so when we got married we worked our tails off to get high paying jobs and live way below our means. Now we have automatic savings where $xx automatically gets transferred to a car savings account. So much of what “normal” people spend goes to interest on things they can’t afford to impress people they don’t even like.
@@jake9167 Congrats on your success. Not everybody can sustain the “damage” from social media and peers. If someone tries to harm my feelings by showing their belongings, I simply do not regard them as friends. It’s bitter pill to take but solves a lot of problems.
@@jake9167 So you try to impress people on youtube instead . Kudos
I am a Dave Ramsey follower, so when I saw the title I decided to watch the video, but I knew I was gonna have to leave a comment about how debt=risk blah, blah, blah. I stand corrected, this is very solid advice, I still believe that when I have the money to buy a car I will do it with a private party.
“Dave Ramsey follower!” You have my sympathy.
The most powerful 4 words when negotiating the sale price and the fees, “That’s not good enough”. Don’t be afraid to walk away if the offer isn’t good enough. Great video – thanks!
“That’s not good enough” was a line from Schindler’s List.
“Okay sir, we can give you this $30,000 car for free.” That’s not good enough.
@@jonathancorcoran9427 you were given a brain for free. I guess that wasn’t good enough.
@@iseehowitis9382 Was making a joke.
until you out smart yourself and walk out on a phenomenal deal haha. i see it all the time.
Love this man! So many people walk in to a dealership and just bend over and still think they got a “good deal”. Thanks for the ammo I’ll definitely be using this.
“Where we service you with no lube” lmfao
I briefly caught that. Could have a couple of directions with that comment 🙂 It was a subtle quick comment.
Lmaoo who else went to the comment section immediately after hearing that?
Lol
Well presented. Best advice I ever got and has proved true regarding dealership salesmen is ” don’t hesitate to walk”….what you’re saying along with that mindset is the way to go.
I always make sure the ODO price is locked in at the salesperson’s desk, and I ask for a breakdown(tax, delivery, document etc.). If it changes(+), I’ll walk. Also, you can negotiate interest rates. Get a print out of a low rate from your credit union/bank and ask them to match it.
ODO price?
@@elliottpeabody1287out the door price
In general sales people are not authoried to lock in prices. Maybe you live in a country that is not the usa.
@@tommak6516 This pertains to the US. I worked in car sales during college. It doesn’t matter who has to sign off, but yes typically it has to be a sales Mgr. My point is if they can’t present the accurate final cost at the salesperson’s desk, no need to go any further. By final cost, I’m referring to total price if you’re paying cash. Interest rates/payments are typically handled in the business office but have seen exceptions there too.
Ok so story time-
My cousin, who is blonde, played up the “I’m a dumb blonde girl and do not know anything about cars” trope when she went to the dealership to get a Lexus. She did so many stupid things like open the trunk and said “Oh my god! Where’s the engine?” Or she pretend to not be able to open the door “bouncing” her Ta Ta’s the whole time in front of the salesman.
When it came time to buy the car she played up the dumb blonde thing again and they offered to finance in house with this ridiculous rate. Like 20% or something in exchange they took thousands off the price for her to make it look like she got a deal.
The next day she came back in her business suit and paid off the loan. THEY WERE PISSED. She is one of my favorite cousins.
I walk in with $100 bills sticking out of all my pockets and pretend to be drunk.
Car loans are simple interest not compound interest, which means they add the interest of the total term of the loan to the principle of the loan right there from day one, divide the total amount by the number of payments and that is the amount of your monthly payment, regardless of when you pay it off you end up paying the same amount: the total principle + total interest.
@@had2043 I never heard that before?
@@had2043 unless you think a customer is an idiot and try to skirt around. I don’t know how logistically it happened but it did. I’m not sure what your comment is suppose to prove other then that Lexus did not do their due diligence.
@Brad Olson that is what I thought unless there a stipulation where there a penalty. Bc I posted this question before n never read an answer. Go through the whole salesperson spill get the lowest n just pay it off the next month.
I’m 50 yrs old and owned a small dealership for years. Of course if your a dealer you’ll go to auctions and buy cars. I’ve been out of the car business for some time and what this man is saying is gold. I do exactly what he said at the end of this video and have been for many years. I also set my alerts on CL and always look for high-end 1 owner cars. I almost felt as if he was giving away trade secrets but then I remembered, I don’t have a dealership and am not selling cars for a living. You should thank the creator and then thank this man who made this video. Valuable info you wouldn’t know without his generous effort to teach you. Peace.
When you are car shopping, are u paying Kelly blue book value or are the sellers selling to you for less than book value? If Kelly book says a Hyundai Tiburon 2003 GT great shape gets $5000 but it’s got 156k miles, I believe for each year, 12,000 miles is the average car miles – so 2003 average miles in 2022 is going to be about 144,000 miles on it. If the car has 156k miles, you subtract $1000 for each 12,000 of miles off the price. So, I would offer the person $4000 instead of $5000 because of the milage. Obviously, I’m going to look at other factors as well but is this an approximate method for figuring out a fair price on a car? Kelly’s blue book for a starting point.
nice
I love how you say thank The Creator. I hope you meant God that’s awesome. This guys videos are fantastic. Jesus is Lord!!!
@@maxwellmarlin880 No, God didn’t make this video, Marko did. I’m not even sure god has a video camera.
God made Marko and blessed him with intelligence and the ability to learn.
One of the things I learned is to wait for that final week of the month because that’s when dealerships are trying to sell cars the most because the following month they have to pay insurance on every vehicle
“No Lube Cheverolet”. That was low key hilarious
I pay cash because
1. I’m trying to avoid debt
2. I don’t want to spend all that extra money in interest
Loved the end of the video! Wife and I just did a private party car purchase and saved so much on a decent vehicle! Keep up the great work!
Bought a car last year at a dealer. I asked about financing, worked on what bottom-dollar would be etc. After we settled on the price, I just switched it up and wrote a check. The finance guy got pretty forgetful and uncomfortable but I sealed the deal my way (I planned on paying in full before we even started the process, I just didn’t let them know that until it was all done).
We did the exact same thing when we bought our new Highlander last year. We also negotiated the bottom line price via financing, and then wrote the check. They weren’t thrilled, but we had the price we’d wanted in writing.
I was wondering how this works. I can see doing it Marko’s way but I guess doing it your way I suppose the dealer could get upset but why would I care about that. What I don’t know, could the dealer cancel the deal at this point? That’s my only fear and it may be unfounded and I may be over thinking it 🙂. I’m paying for my next car in full, either financing and paying off in 30 days or by whipping out the check book.
I would like to know if the dealer can cancel the deal. What “in writing” do I need exactly?
I’m not sure how it would be at every dealer, of course…but from the moment the sales guy said hello, until everything had been worked through with the finance manager, I honestly told them that we weren’t sure if we were financing or paying cash. And honestly, the bottom lines either way weren’t terribly far apart.
@@NunoGabriel the dealer or you can cancel the deal at any time if you haven’t already taken possession of the vehicle. Either way, you should get your money back. Any steps beyond that with you in possession of the vehicle turns the tables. Beyond that, I’m not sure what we’re talking about.
Unrelated. I’m not an envious man… but the hairline is impeccable 😂😂
Superb video, and you explained exactly what I did to get the best deal on a new car from a dealership. 1. Leave all options open (new/used, finance/pay cash, trade-in/no trade-in. 2. Be non-committal until the very end. 3. Negotiate the PRICE OF THE CAR ONLY until you agree on a price; then finance it for one or two months, and then pay it all off after 2 months. This is absolutely the best way to get a great deal on the car (finance manager thinks you are financing the car and gives you a break on the price, then you pay it off in 2 months so you don’t have to pay exorbitant interest rates).
Another thing: never start negotiating the price on first visit to the dealership. Most of my car purchases happened over a period of 4 or so months so they knew I was serious; and I usually bought at the end of the month so the dealership was incentivized to sell in order to reduce carrying costs of the vehicle over another month.
Yet another thing: always have a holdover comment to use as leverage (something you honestly don’t like about the vehicle in question – but don’t absolutely have to have). You can use this for leverage when negotiating price. For me, it was style of wheels, or a particular feature they didn’t offer which other dealerships (or vehicles) did – could be something as simple as rear heated seating, ventilated front seats, or wireless charging option.
All these things (plus trying not to show too much enthusiasm) will help you to financially negotiate the best deal.
Again, thank you, Marko, for a superb video!
I never return to a dealer and no negotiation should take more than 5 mins.
How does paying the loan off in 2 months affect your credit? That’s my biggest concern