In the market for a few year old Prius (13/14) with low miles. Any suggestions on getting the best deal? I'm selling my car private party so no trade in. I have cash but was going to finance a good part of it just to take advantage of the low rates. Is it true that dealers make more on the financing end and offer better savings if you take out a loan? One guy is asking me what monthly payment i'd be comfortable with -- and I heard that is a red flag. Any help is suggested. Been a while since i went car shopping. And i guess a follow up to this? Would i get a better deal if i finance the whole thing? And then pay down the principal in a month or two?
I don't think I'd consider myself an expert on this, but when I bought mine I had the price worked over email before I ever stepped foot in the dealer. The old line of thinking is cash buyer is better, and that is how I have always done it, but they have told me several times they would prefer me to finance for the reasons you described (I still didn't do it as I don't like the idea of a car payment). I think your idea about a quick payoff is a good one, just read the contact and make sure there is no early payoff penalty or anything. And only deal in the final number, you might get a good payment only to find they expect $xxxx down or the loan is 2 years longer than you thought. Especially if you pay it if early - the payment doesn't mean anything to you. I'd also recommend working with the out the door (they seem to like to call this drive out now) cost, so you can watch out for fees, etc.
It depends on if the dealer has any financing deals available. In general, if its financing with the brand itself, then yes, the dealer gets some sort of incentive. However, used cars don't get the same treatment in general as they have higher financing terms. And in my experience whether to finance or buy with cash has never influenced the dealer either way in terms of negotiating the price. You just get what is promised in the advertising for that financing term. For example on a new Prius, 0% financing for 60 months. The dealer left it up to me if I wanted to finance or not. My opinion is dealers prefer financing because the bank pays them. If your check bounces 3 days after you drive it off the lot, the dealer now has to repossess a used car. If you don't pay your loan, it's the banks problem. And finally, I just got a used car loan for 2% from my credit union. The dealer offered me 5%. I can pay cash but chose not to because I want to fully fund my Roth IRA and 401k. I can make much more than 2% in my retirement accounts compounded by the next 3 decades before I retire. Inflation is higher than 2% so I am just going to pay that loan off as slow as possible.
If I've got cash I'll pay cash. If I don't have cash I'll wait till I do. Pretty much the only exception was when we got our house. I'm not espousing this, just not bright enough to be clever.
Yeah it's sort of like i have the cash--the financing is more of a convenience thing--selling my other car, tax refund, moving around cash etc etc but i am mostly of the same mindset...well except for the house--which there was no real getting around the fact that I needed a mortgage. one of my biggest problems...haha..and glad to have my wife keep me in check as well.
I think cash is the way to go, too, if you can spare it. When we did get car loans in the past because we needed a year to accumulate the funds, we paid off the loan from the dealer or credit union as fast as we could. Just don't like the idea of a payment on an asset that depreciates so quickly. Having negotiated a good cash deal for our third Prius a few weeks ago makes me a firm believer in cash, especially when the dealer's sales are down due to bad weather, etc. But do work with the out the door price so that you know the final number at the outset and the dealer understands that that amount is as high as you will go, especially including dealer fees, taxes, licensing, etc.
