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Originally Posted by jmjj215
That doesn't really hold water. The dealership gets cash either way. Whether you borrow from the bank and give them borrowed money, or pay them outright with your own, they're still getting cash. You can get pre-approved for a car loan and have the 'cash' right there in front of the dealer to psychologically have the upper hand, or you can have pulled it out of your car fund at ING. It's still just cash to the dealer.
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What I meant by that is I know car dealers. I should, my brother owns a dealership. Basically, I can take a check for $10,000 and get more car than if I ask them to finance the $10,000 for me. If you finance a car (especially through them), then they know you don't have a whole lot of money...so why cut you a break? (words from my brother).
Granted, I see what you are saying and I guess you could make a little more money that way but I am getting older. Debt is the last thing I want. What if die tomorrow? Sure, life insurance will pay the debt. But that's one more thing my wife has to deal with. Plus, like I said. Me, personally, choose no debt and paying cash for everything. I don't buy new cars anymore. Used cars with cash.
In fact, the BEST way to get a car at the lowest rate (from a dealer, anyway) is to call up 2-4 of them and say I have $XX in cash. I want XYZ car with XYZ options. I have called three other dealers. Lowest bid wins.
Plus, another thing. I live in a small city. Almost all of the car dealers use the same finance company in town! So, IF I were to use on-site financing, they all know I am getting from the same place. So they know I can't bluff them. Granted, I could borrow the cash and show them the cash.
But lets look at reality again. Honestly, how many people get a 2.5% rate for the entire length of the car loan? Maybe you do but keep in mind, the car dealers have to make something. So they jack those cars way up and then offer 0% or 2.5% to make you think you are getting a deal.
Give me a $4,000 car from the newspaper that I pay from checking over a $18,000 car costing 2.5% anyday.
Besides, why stop at a car? Why not get a CC and pay for all of your food too. That way, you can put your grocery money in savings at 4.25% and pay off your CC each month. Let your grocery money sit for 28 days drawing interest....lol
People do it...and maybe make a little. But the earnings don't justify the risk and work for me personally.