can you get car cheaper with cash payment

[Autumn]

Yes, paying with cash can often get you a cheaper car, but it's not a guaranteed discount and depends heavily on the dealership's business model. The primary reason is that dealers frequently make a significant portion of their profit from financing incentives offered by banks or the manufacturer's captive finance arm (like Toyota Financial Services or GM Financial). These incentives, often called a "dealer reserve" or "finance reserve," are kickbacks the dealer receives for originating the loan. By paying cash, you eliminate this profit stream for the dealer, which can make them less willing to negotiate on the final price.

However, the strategy isn't as straightforward as it once was. Some dealerships now build their business around volume bonuses from manufacturers, meaning they are motivated to move cars quickly regardless of payment method. In these cases, they might be more interested in a fast, simple cash sale. The key is to negotiate the final out-the-door price of the vehicle first, without mentioning how you plan to pay. Once you've agreed on a price, you can then reveal your intention to pay with cash. This prevents the salesperson from inflating the price to compensate for lost financing commissions.

It's also worth considering opportunity cost. If you have the cash on hand, compare the potential discount from a cash payment against what you could earn by investing that money elsewhere. Alternatively, you could take a low-interest manufacturer incentive (like 0.9% APR for 36 months) and keep your cash invested.

Tactic	Potential Savings	Dealer Preference	Key Consideration
Cash Payment	$500 - $1,500+	Lower	Removes dealer's financing commission.
Using Manufacturer Financing Incentive	$2,000 - $5,000+	Higher	Often the best overall deal, even with a loan.
Outside Bank Loan	Varies	Lowest	Gives you leverage; dealer may try to beat the rate.
Leasing	N/A (monthly cost)	High	Cash is not applicable for a standard lease.

Ultimately, the best financial decision requires researching current incentives and being a shrewd negotiator. Focus on the total cost of the vehicle, not just the payment method.

[DeCatherine]

From my experience, cash is king only if you play your cards right. I never lead with the fact that I'm paying cash. I let them think I'm going to finance because that's where they make their real money. I haggle on the total price until we're both happy. Then, right before we sign, I say, "You know what, I've decided to just write a check." They're usually annoyed, but the deal is already done. It’s saved me a nice chunk of change more than once.

[AliyahLee]

It's a common myth. Dealers actually prefer you finance because they get a kickback from the bank. So, waving cash around might not get you a better deal. The smarter move is to see if the manufacturer is offering a special low APR, like 1.9%. Sometimes that rebate is worth more than any cash discount. Do the math on the total cost—interest included—before deciding. Your goal is the lowest total cost, not just the lowest sticker price.