Is credit better than cash
05-01-2013, 05:31 AM
#11
Super Member
Join Date: May 2011
Location: Oregon
Posts: 1,614
Years ago, I used to be a loan officer and did car loans at a credit union for members. I would walk people through what to do and NOT to do when looking at cars, and then explain how financing goes at a dealership. They 'shop' your loan to a variety of lenders, who offer 12-15 different options....many of which have higher rates and 'rebates' to the dealership. Of course the dealership isn't going to offer you the lower rates, they give you one of the higher ones so they get the rebate on the financing. Cash is the absolute best from the consumer point of view. Haven't paid interest on a car in many years -- I have other uses for my money!
05-01-2013, 07:22 AM
#12
Senior Member
Join Date: Aug 2011
Posts: 727
Originally Posted by Peckish
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.
05-01-2013, 08:32 AM
#13
Super Member
Join Date: Jan 2010
Location: Pacific Northwest
Posts: 9,269
A car salesman wouldn't even deal with me because I wasn't in debt up to my chin with credit cards. He told me I had no paper trail to follow....I told him I was saving the trees by having a paper trail. ....LOL
I even explained to him I was just starting my company and I didn't need another payment in the out going expense box at the end of the month. Uncle Sam and the state already had their hand out I didn't need their hand crowding in. He still said no. So I went across the street and they were more than happy to deal with me.
I even explained to him I was just starting my company and I didn't need another payment in the out going expense box at the end of the month. Uncle Sam and the state already had their hand out I didn't need their hand crowding in. He still said no. So I went across the street and they were more than happy to deal with me.
05-01-2013, 09:00 AM
#15
Super Member
Join Date: Jan 2009
Location: PA
Posts: 2,879
Originally Posted by quilterCDN
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.
05-01-2013, 09:05 AM
#16
Super Member
Join Date: Jun 2010
Location: Bay Area near San Francisco
Posts: 1,213
Originally Posted by true4uca
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.
05-01-2013, 10:30 AM
#17
Super Member
Join Date: Jan 2011
Location: Nevada
Posts: 6,958
Originally Posted by catmcclure
Is there a charge for paying off the loan early? What are the finance charges? If you can pay it off early and the finance charges are less than the freebies, finance and pay off next month. If the finance charges equal cost of "freebies" then it's a no-brainer.
DH and I have done both: we bought a used car on credit, then paid it off with cash within a month (no penalty) and right now, we have a no interest loan on our newest car [2 years old and we bought it new] - we debated paying it off, but it would lessen our available cash and we are paying no interest. We could still pay it off at any time.
It depends on what is best for you and it's true: freebies are usually not free. We paid cash for a used car for our son, which included 2 years of "free" oil changes. However, the dealership makes him cool his heels for several hours and is very rude to him, so he went to Jiffy Lube. Apparently, this dealership is rude to all it's patrons, whether they buy a new or used car.
05-01-2013, 08:12 PM
#20
Super Member
Join Date: Sep 2010
Location: Myrtle Beach, SC
Posts: 8,099
Always pay cash if you can...no payments! I absolutely hate making payments on anything, so only buy cash - sort of - we use our credit card for purchases and then pay it all off at the end of the month.
For those making payments on cars - when the car is paid off, keep making the payments, but make them to your bank account. Don't treat it like you just got a raise unless you MUST to keep a roof over your head and food in your stomach. I did that after I paid off my first new car years ago. When it came time to get a new car (old car was aged 10+ years), I had the money in the bank. And I kept making the payment into my bank account.
Enjoy your new car!
For those making payments on cars - when the car is paid off, keep making the payments, but make them to your bank account. Don't treat it like you just got a raise unless you MUST to keep a roof over your head and food in your stomach. I did that after I paid off my first new car years ago. When it came time to get a new car (old car was aged 10+ years), I had the money in the bank. And I kept making the payment into my bank account.
Enjoy your new car!
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