Buying a car with cash means you don’t need to commit to financing your car, won’t risk defaulting on a loan unexpectedly, and can be the best way for someone with credit issues to purchase an affordable used vehicle. The process of shopping around and negotiating for a car you’re going to pay cash for is somewhat different than walking onto a new car lot with an eye toward financing. The following tips will help make sure you get the best deal possible when paying cash for your next car.
1) Research within Your Budget
The first step toward buying a car with cash is researching the cars that meet your driving needs and are available within your budget. Unlike with the budgeting process for a financed car, you need to work around the money you've been able to save up instead of what you can afford to spend monthly on car loan payments. Keep in mind the money you will need to spend on registration, title, insurance and other car purchase expenses while determining your budget. Use local classifieds, websites and word-of-mouth recommendations to narrow your field of options to only those cars you can afford to pay for with the cash you have on hand.
2) Know the Car’s Value
Once you have finished researching the car you want to purchase with be sure you know its current fair market value before you start negotiating the cash deal. Some dealerships are extremely aware that substantial portion of their potential profits come from financing fees, and there is no chance of you defaulting and the dealership regaining ownership of your vehicle down the line. For this reason, you need to make sure you are not being charged more for the car in a cash deal than you would be if you were using a car loan. The Kelly Blue Book value, both available online and in the printed version, will tell you a car’s worth both with dealerships and with a private seller.
3) Negotiate Wisely
The most important aspect of smart cash car purchase is never revealing the amount you are able or willing to spend to the seller, either a private party or a dealership salesperson. This is why knowing which cars fit your budget based on their fair market value before you are face-to-face with the seller is so vital. Test drive the car you are considering, discuss how much the seller is asking for, and use the information gathered in your research and experience testing the car to negotiate the price down if necessary.
Purchasing a car using cash is a good option for those with credit issues, or someone who simply isn't interested in obtaining a car loan. While shopping for a car you are going to pay for in cash, be aware of accurate values and how to delicately negotiate the best possible price.
