How many times have I heard someone ask for a discount because they are paying “cash?” Millions of times it seems. And I’m always tempted to ask, “you mean instead of paying with chickens or goats?” I realize that the question is being asked in regard to financing. But the time has come to explain to the world that there is no advantage to a dealer by taking “cash” (which never means a bag of hundred-dollar bills). In fact every bank out there will pay a dealer a referral fee just for sending finance business the bank’s way. So the reality is that from a dealer’s point of view, they would prefer that every deal is financed. Obviously this hasn’t trickled down to the level of “common knowledge” quite yet.
I believe the reason that so many people still recite the cash price mantra is because many people also have a mistaken belief that if they pay off their car with monthly payments, that the dealer doesn’t get fully paid until they’ve made all their payments. They believe that the dealer would much prefer getting paid now in cash rather than getting a bit every month. Of course, nothing could be further from the truth. When a finance contact is set up with a bank, the bank pays the dealer in full for the car – in cash!
So remember, the only thing that a dealer accepts as payment is cash, whether it’s from you or from your bank.
