Is credit better than cash
 

DH & I have been saving for a newer car. Just got a great buy (Fiat) on one we could pay cash for. No deal for cash but if we financed we could have our choice ( managers special) of a lawn mower, BBQ or power washer. LOL. Didn't need any of those.

What is the interest rate? If it is more than 0%, do the math. It may be cheaper to purchase your own BBQ or power washer.

I would find out if there was a penalty for early payment on the loan and how long you had to maintain the loan before you could pay the balance... Some places make you keep a loan for a minimum of a year before you can pay it off w/o a penalty. If that's the case figure out how much it would cost you in interest - you may find you can by one of those three items for less on your own... just a thought. If there's no penalty, grab the deal and then pay it off as soon as possible *grins*

Cash is always better than credit for the consumer. The freebies aren't "free" - they are built into the payments somehow (interest).

As Dave Ramsey would say "Cash talks" I just recently lost my job and company vehicle, so I went on the hunt for a personal vehicle, I went to tons of dealers, now i was not looking 'brand new' but something used in good condition. I found that the larger dealers would not deal, but the smaller dealers and some a few miles away were more then happy to discuss cash with me. Dealers get kick backs by having people finance, and leasing is the worse. Go check out www.daveramsey.com you cannot go wrong with his advice ;)

Credit IS better than cash - for the dealer!!! They make soooo much more money if you finance through them. We recently shopped for a car and some of the dealers actually became quite hostile when they discovered we already had our financing set up through our credit union. Oh, and DO NOT tell them you already have financing until after you've agreed on a price and have it in writing.

This is also DH's thinking as well. This was a bigger dealer & I really got the impression they really preferred credit ( think kickback to them).

years ago, I sold cars. being new to the dealing, I thought cash was better you see, the sales person whos selling would get a cut of the financing. I could sell the car and make no commission because I sold it 100 over list, and still turn a commission of 200-500 off the credit part of the deal, the loan that was sold to you.. I soon found out that I would prefer my customers to pay by credit.

Pay cash. But having just purchased a new van, YESTERDAY, I cant pay cash so I took out a loan. This is my second car from this dealer and after crunching the numbers, I feel that I was treated fairly vs. the quotes from other dealers that I have not bought from. Chek out Kelly Blue book and Endmonds for pricing and "true" car values. I spent the last few weeks comparing and pricing vehicles, crunching numbers with the online calculators etc. go to the dealer informed and prepared. Look at AutoTrader to see comparable vehicle pricing too.

Exhausting but worth it.

Sandy

My DH and I faced a similar problem a few years back. We financed the car and then after paying one payment, we paid the entire not off. It boosted our credit (which was already good) and we got the special offer. This was suggested by the car salesman.