As I recall some years back, my sister was in the situation to buy a new car with cash and she was advised to finance it first and then pay off the loan because she could get the car for a better price if she financed it as opposed to buying a car with cash. You know, the whole car salesman game you have to play when buying a car...right! Other than that, I don't know...maybe others would know. I think you'd get more replies if you asked at The Kitchen Table...it's a lot more active. http://ths.gardenweb.com//forums/kitchentable/

It may help your credit history to take out a loan for the car and then pay it off early. Check for the rules of how the credit ratings are calculated.

Credit history is not an issue. Interest rates are so low i dont think u get a better price....i negotiated the purchase without them knowing if i would finance or not. they apparently make money on doc fees. $300 FOR A NEW LICENSE PLATE!!

They claim they are not making a dime on pushing the paperwork...yea right....

Unless you anticipate large future expenses, I'd pay cash and perhaps try to negotiate a slight reduction for paying that way. As to holding cash as leverage in case things with car go south, you are obligated by law to pay and must resort to Suing for the whatever problem while still making your payments. It shows the judge that you are the one acting In Good faith by keeping your end of deal, no matter what.

Have been able to shop rates at 0.00 Apr as of the past few purchases and since I do get at least SOMETHING on savings accounts I cannot justify tieing up that much of liquid assets when I can get a cash free loan.

Zero financing OR $2500 discount. Usually something in that range. So u drop 2500 off purchase price and finance remaining balance. Payments usually equal out. Unless it a terrible car where dealer gives u a rebate and low financing. Like a Mitsubishi. RTD. Ever hear that. Rebate to dealer.

We paid cash...might finance an extended warranty---guess that's another topic!

The loan is totally unrelated to any issues you may have with the vehicle. Even if the manufacturer used a drinking straw for the gas line and the car burned up in your driveway, you'd still be responsible for paying back the loan. That wouldn't preclude you from legal action against the manufacturer but the two are unrelated.

As for paying cash, there's a few things to consider. First off is if you have enough cash reserves for an emergency. Having a paid in full car in the driveway is nice but might not do you much good if you're being evicted from your home. Maybe split the difference, with a healthy down payment to keep the payments low while still having some ready cash should the need arise. Beyond that, it's really a simple question of if you can get a greater return on your money by investing it than you can borrowing money. In all likelihood, the difference is going to be pretty small and you have to also consider the tax implications of any return on investment. Obviously a history of on-time payments has a positive effect on your credit rating, which is important now for a lot of things beyond borrowing money.

I might suggest not mentioning that you are considering paying cash until you've agreed on a purchase price for the vehicle. Dealers do make money off of financing, so they may offer a slightly better deal if you finance the vehicle. If you are going to finance the vehicle, it's a good idea to do a little loan shopping before walking into the dealership. Loan rates can be negotiable, just like the price of the car.

Some years ago I was buying a new car and did a little shopping before hand and knew I could borrow money at, say, 6%. The dealership was offering 8%. I asked if that was the best they could do and I got the usual pained look from the finance guy like I was taking food out of the mouth of his child. When I told him I'd be back in a couple of days with a check, amazingly he could match the rate.

I find it to be much cheaper to pay cash for anything. However, dealerships and banks are buddies. Selling a loan is also part of a salesmans job in the larger single car brand dealerships that typically sell new vehicles. If I had cash for a new vehicle I'd probably go with the slightly used low mile route with a factory warranty. That allows for plenty of bartering room since it was most likely a trade in (or dealer auction) vehicle. Cash has much more pull in certain situations such as that. I'd never take the financing route if at all possible.

It all depends on your options being offer to you!. New car sales now involves selling their total package - financing, extended warranty, gap insurance, maintence/service plans for oil changes, inspection, accessories, all of which can be in your loan and it is just another few dollars a month for your 84 month car loan!.

If you can avoid the F&I now called the "business manager" heavy sales tactic; (LOL), in most cases , after you negotiated the price of the vehicle and trade in(s) if you have one, tell the F&I person, salesperson you just decided to play "cash" and watch the expression on their faces!

Or just internet shop the best price and be prepared to say a bunch of no no no's before signing the ridiculous amount of paperwork! This worked well for us on our prior 3 purchases... up until our last purchase where we got involved at the dealership...not sure what I was thinking! The funny thing was they tried to sell me some 3rd party extended warranty for 3k..on a new car....after said 'be honest...does anyone ever buy this'....the show was over and we were out in 20 minutes. Funny thing ...I was and still interested in a warranty...but a genuine factory one...they likely lost a sale on that.

300 for license plate? Uh, u mean yearly vehicle tabs? That's the tax u pay yearly to drive on the roads u pay tax dollars to fix. And pay the dmv salaries to issue the tabs. Sort of self fulling there. Friend got his car towed cuz he was 1 month late on tabs. Blamed it on state not mailing his renewal notice. Duh. Look at ur plate every so often.

No that was the fee they charged to get me a new plate and put it on the car. It's half that at the last dealer. Registration is 40 a year. As to which tax goes to fix roads it's hard to say since they say they collect the $ for one thing and use it for something else....like social security. My neighbors in NJ just got hit with a .27 a gallon additional tax...supposedly for roads then found out the dollars might go other places...now it's on the ballot to vote on whether or not to allow those dollars to be used for anything other than roads.