View Full Version : Wanna pay cash??
So you wanna buy a new car, but don't need the pesky payments or interest over the years, say financed over 36 months, you're gonna be paying quite a bit in Interest alone.
So what happens if you pay CASH.???
Is there a protocol the dealer goes by? Are you gonna pay more overall? Are you even ALLOWED to pay cash for something like that?? (I'm talking about NEW cars, not used)
It just seems like the dealership wouldn't make as much, and lets not forget the money the bank loses.
Anyone have info on this??
I purchased my last car with cash. Not check, not a debit card. Actual cash.
Had to take it out of the bank in two installments because of their policies. But the dealership was fine with it.
That being said state laws vary.
Dealerships love cash. They make more not less usually. The banks are the only ones who lose.
When buying a vehicle with cash, don't let the seller know you plan to pay cash for it i.e., not finance.
If they think it's going to be financed by them, they'll give you a better deal.
When the day comes to buy the vehicle, then, and only then, do you tell them it's a cash deal.
The selling price at that point is fixed...
SilverBullet432
11-16-13, 15:58
around here, if you buy a new car with cash, the cops will investigate you.
Eurodriver
11-16-13, 16:25
Honestly, your best bet is to negotiate the best deal via financing. Go in there and let them pull the old "4 square" job on you - lowering the purchase price of the car while steathily increasing the interest rate. Let them give you 18% interest if it gets you $1,000 off the car.
Then, call up the finance company and pay it off in full the next day, or wait until you get your first bill and do it online.
This is what I do every time. The dealership will usually call you up a little angry, but **** them. I hate car salesmen with a passion. They seem to think all the scams in the book are okay for them to do, but get butthurt when you pull a fast one on them like you broke some sort of code of ethics. :confused:
around here, if you buy a new car with cash, the cops will investigate you.
This. You will need an IRS form if you're carrying more than 10k as well.
filthy phil
11-16-13, 16:29
Ive bought motorcycles with cash. Once I had to walk a pretty dicey street with $11k in my pocket.
Yeah they have a form they send in if you hand them over $10k
I never heard from the feds about my monies source.
Honestly, your best bet is to negotiate the best deal via financing. Go in there and let them pull the old "4 square" job on you - lowering the purchase price of the car while steathily increasing the interest rate. Let them give you 18% interest if it gets you $1,000 off the car. Then, call up the finance company and pay it off in full the next day, or wait until you get your first bill and do it online.
If anyone does this, you best read your financing contract very closely. It is not unuasual to find penelties for early payoff and/or minimum charges. Buyer beware!
Eurodriver, I haven't seen the 4 square trick in a while. Man I had almost forgotten about that.
I paid cash for my Maxima less than 2 years ago. Well cashiers check technically. It made it harder to negotiate. They didn't take much interest in selling to me. That was at all dealerships. Maybe they thought I was full of shit when I told them I didn't want to go threw the process of credit approval.
No cops investigated me and no IRS inquires.
They kept asking me to finance. I guess because they got some kind of benifit from it.
Eurodriver
11-16-13, 17:26
If anyone does this, you best read your financing contract very closely. It is not unuasual to find penelties for early payoff and/or minimum charges. Buyer beware!
When is the last time you financed anything? Apparently this used to be a problem, but I don't think it is very common anymore.
Obviously, one should read any contract to ensure you're not going to pay a pre-payment penalty but I've bought cars and motorcycles all over the country from credit unions, Honda financing, and banks and it's never even been mentioned.
Eurodriver, I haven't seen the 4 square trick in a while. Man I had almost forgotten about that.
I know. And to think, people fall for it. One time I was going to buy a Kawisaki Ninja 650 and when I asked how much the bike was, he pointed to the square and said "$220 a month!"...when I told him I didn't want to pay that much a month and wanted the out the door price he said "Okay, okay...how does $215 a month sound?" and wrote it in big numbers with a sharpie over the $220. It just went on and on.
I literally had to ask for a manager for him to tell me the out the door price. It was ridiculous and they lost a sale because of it. There's no square for "Total price". You don't find that out until you get your truth in lending disclosure, which I found out recently most people don't even read!
If you're interested in a good read check this out. Edmunds sent a reporter undercover as a car salesman. It goes through all the tricks they use from the perspective of a salesman.
http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.html
This. You will need an IRS form if you're carrying more than 10k as well.
A FINCEN 104 Currency Transaction report is filed by the bank. From what I understand you don't need a copy if its on file. Kinda like the 105 form for taking from or bringing in more than $10,000 into the US.
When is the last time you financed anything? Apparently this used to be a problem, but I don't think it is very common anymore.
It is only a problem if one does not read their contract. And, to answer your first question, I have been in the lending business my whole adult life.
Obviously, one should read any contract to ensure you're not going to pay a pre-payment penalty.........
Probably should have said that the first time.
...........but I've bought cars and motorcycles all over the country from credit unions, Honda financing, and banks and it's never even been mentioned.
And I am happy for you, but it doesn't necessarily make it true in every situation. I have done it also, but made absolutely sure there was no early payoff fee in the contract first.
This. You will need an IRS form if you're carrying more than 10k as well.
Huh? Your bank will fill out a CTR if you withdraw more than 10k, but you don't need a damn thing.
I've never seen a finance company hand your payment in full back...however, you should always read the fine print to be sure there are no penalties for early payment.
I paid cash for my 2013 VW Passat in March. After we've arrived at the bottom line price, yes I did tell them I was paying cash/check, I wrote them a check. They checked my credit record and verified that I did have the money. They told me my check was good, I drove away with a new car.
I did the same thing in 2011 when I bought the KIA Sorrento, that dealership requested a cashier's check.
A lot of dealerships will request a cashiers check if they haven't done business with you in the past. I don't consider it an insult, just safety on their part...
SilverBullet432
11-16-13, 21:24
Well they dig around here mostly because theres a lot of drug trafficking that goes on around here, looks mighty fishy when a mescan wants to pay cash for his 60k truck lol.
I will clear up some misinformation in this thread;
1) Dealerships make money if the customer is using in house financing or a dealer preferred lender such as their captive financing source.
2) Cash is different than check. The new patriot laws are in place to catch money laundering. Checks have already been placed into the banking system and under the eyes of the IRS. Cash is not and the IRS wants to know what, where, and how the cash came into ownership.
3) Any cash amount over $10,000 will be reported to the IRS. If paying in amounts to avoid being detected by the $10,000 is considered evasion and is illegal and may result in a penalty.
Please cite the law for number 3. I've never heard of it being illegal to avoid reporting. Suspicious, and therefore reportable. But not illegal.
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Please cite the law for number 3. I've never heard of it being illegal to avoid reporting. Suspicious, and therefore reportable. But not illegal.
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I'm not googling banking requirements / money laundering laws on my iPhone but I can just assure you as working in the finance industry it is. In fact.... Even mentioning or questioning the law of reporting procedures during the transaction is cause for the banker/financier to report you to the IRS.
Our government has really gone a little too far but it is the war on (insert whatever the gov wants you to believe)
By "cash" do you mean hundred dollar bills or a personal check?
Never done the former, but I do the latter, and there was never an issue. I don't enter into financing discussions; I just negotiate the price.
And though I am not a lawyer I believe that the grounds they can push for is evasion of reporting procedure. You maybe innocent but you better have an attorney to fight the charge of they find you in noncompliance as they have unlimited lawyers to prosecute.
ForTehNguyen
11-16-13, 22:28
not sure what the appeal to paying cash is when interest rates are really low
I'm not googling banking requirements / money laundering laws on my iPhone but I can just assure you as working in the finance industry it is. In fact.... Even mentioning or questioning the law of reporting procedures during the transaction is cause for the banker/financier to report you to the IRS.
I also happen to work in finance, which is why I asked what the law is, having never heard what you said to be the law. As I know the law to read, a suspicious activity report is required (BSA), but taking out cash in any amount is not illegal, nor is taking it out at levels that intentionally don't trigger reports.
And the IRS doesn't handle CTRs or SARs. FinCEN (Dept of Treasury) does.
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Belmont31R
11-16-13, 22:48
Well they dig around here mostly because theres a lot of drug trafficking that goes on around here, looks mighty fishy when a mescan wants to pay cash for his 60k truck lol.
Whats wrong with a Mexican paying cash for a truck? Good on them. Wish I could do the same. I bought my 350Z and put 4500 down and paid the rest off as much as I could when I could. None of the car dealer's business where the money comes from.
The reporting (on the bank side) is simply because of concerns about money laundering and tax evasion. If you walk in with 10K plus, the concern is that you've evaded taxes, or you're trying to make "dirty money" clean. It used to be organized crime that had them all worked up (the BSA that covers it is from the 70s and the amounts haven't changed) and now it's terrorist financing...
I'm sure that they're not worked up that ANYONE, regardless of race, has 10K. They just want to make sure that it's not from illegal means and that the taxes have been paid.
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Belmont31R
11-16-13, 23:08
The reporting (on the bank side) is simply because of concerns about money laundering and tax evasion. If you walk in with 10K plus, the concern is that you've evaded taxes, or you're trying to make "dirty money" clean. It used to be organized crime that had them all worked up (the BSA that covers it is from the 70s and the amounts haven't changed) and now it's terrorist financing...
I'm sure that they're not worked up that ANYONE, regardless of race, has 10K. They just want to make sure that it's not from illegal means and that the taxes have been paid.
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Banks are reporting a lot more than 10K+. Look up structuring. Lots of people have been put under the Federal eyeball because they're business owners and make lots of little deposits that end up totaling over 10k yet fall into some sort of structuring algorithm. The IRS will confiscate all your money and not think twice about it.
Banks are reporting a lot more than 10K+. Look up structuring. Yes, I mentioned SARs
Lots of people have been put under the Federal eyeball because they're business owners and make lots of little deposits that end up totaling over 10k yet fall into some sort of structuring algorithm.
Only if they lie when providing KYC info to their bank as they set up their accounts. Info that banks are required to collect specifically to understand expected use of business accounts.
The IRS will confiscate all your money and not think twice about it.
Oh really? How would they do that if you've broken no laws.
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Belmont31R
11-16-13, 23:25
Oh really? How would they do that if you've broken no laws.
lol really? Ever heard of civil asset forfeiture?
lol really? Ever heard of civil asset forfeiture?
You're taking about America v. $124,000? Yeah, I've heard of it. If you don't think for a second that wasn't drug money, no amount of evidence I can present will convince you.
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Belmont31R
11-17-13, 00:05
You're taking about America v. $124,000? Yeah, I've heard of it. If you don't think for a second that wasn't drug money, no amount of evidence I can present will convince you.
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So all civil asset forfeiture cases are legit, and theres no wrongful cases?
xjustintimex
11-17-13, 01:04
Lol not sure if serious or not, we have always bought new cars with cash or a simple wire transfer since I was a little kid until now. It is actually not that taboo and the dealerships do not act like it is a big deal at all.
xjustintimex
11-17-13, 01:09
Because if you don't have to add more debt it leaves room to finance other things.. Or just not have more debt.
Voodoo_Man
11-17-13, 06:42
Local car dealers don't take cash, I've tried they refused, they said finance, buy with a credit card, they don't care, but no cash.
I bought a F250 with cash in 2000. The dealer said he had to report any cash transaction of 10k plus to the feds...I said, do what you are legally bound to do...and fill my truck up with fuel, I'm leaving. Smooth and easy transaction. Never heard a peep from anyone.
So all civil asset forfeiture cases are legit, and theres no wrongful cases?
Yes, we live in a perfect world with no mistakes... I'm sure you're aware of this.
SeriousStudent
11-17-13, 13:45
......
If you're interested in a good read check this out. Edmunds sent a reporter undercover as a car salesman. It goes through all the tricks they use from the perspective of a salesman.
http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.html
That was worth reading, thanks.
I have actually called the police to come to a car dealership, when the sales manager locked the door late one night and refused to give me back the keys to my vehicle, which I had brought for a trade-in. That did not end well for them.
Eurodriver
11-17-13, 14:07
please tell....
That was worth reading, thanks.
I have actually called the police to come to a car dealership, when the sales manager locked the door late one night and refused to give me back the keys to my vehicle, which I had brought for a trade-in. That did not end well for them.
I'm not googling banking requirements / money laundering laws on my iPhone but I can just assure you as working in the finance industry it is. In fact.... Even mentioning or questioning the law of reporting procedures during the transaction is cause for the banker/financier to report you to the IRS.
Our government has really gone a little too far but it is the war on (insert whatever the gov wants you to believe)
31 USC 5324 Structuring
It makes it a crime to break up transactions to avoid certain reporting requirements. As an example, you have $11,000 dollars in cash but do not want the bank to file a CTR. So you deposit $5,500 today and $5,500 next week.
Whiskey_Bravo
11-17-13, 14:37
31 USC 5324 Structuring
It makes it a crime to break up transactions to avoid certain reporting requirements. As an example, you have $11,000 dollars in cash but do not want the bank to file a CTR. So you deposit $5,500 today and $5,500 next week.
Yet it is probably done thousands of times each day. If I have 10k at the house I want to deposit I would more than likely be splitting it up as well. I didn't do it to avoid reporting, I just did it because I don't like carrying all my cash at once and want to split it up over the course of a couple weeks.
I also happen to work in finance, which is why I asked what the law is, having never heard what you said to be the law. As I know the law to read, a suspicious activity report is required (BSA), but taking out cash in any amount is not illegal, nor is taking it out at levels that intentionally don't trigger reports.
And the IRS doesn't handle CTRs or SARs. FinCEN (Dept of Treasury) does.
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Do what you want and try to circumvent the controls in place. It doesn't matter to me.
Yet it is probably done thousands of times each day. If I have 10k at the house I want to deposit I would more than likely be splitting it up as well. I didn't do it to avoid reporting, I just did it because I don't like carrying all my cash at once and want to split it up over the course of a couple weeks.
Yes, it certainly is and is often done for legitimate reasons. One of the elements of 5324 that the govt must prove is that the defendant knew of the reporting requirements and the transactions were done specifically to avoid them.
[QUOTE=_Stormin_;1795652]Please cite the law for number 3. I've never heard of it being illegal to avoid reporting. Suspicious, and therefore reportable. But not illegal.
http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Form-8300-and-Reporting-Cash-Payments-of-Over-$10,000
Absolutely the law. Plus, for those who think paying $9,999.00 and coming later with the balance, you still get reported. There have been stings by state regulators setting up dealerships to see if they catch it and report it.
Dealerships do make money on financing and so consider that when you are negotiating. Cash deals are deals but not the most profitable for them, so hold your cards close to your vests until you are ready. If it's a simple interest loan, you can pay it off with no penalties unless there are some written into the contract. When that happens, it's called a chargeback to the dealership. They "buy" the loan at one rate, mark that up to you higher and that's their commission.
If you can afford to pay cash, that is always the least expensive choice. And you never know when your circumstances might change and the payment looms too large...
BCM, just know that they don't make money on the back end (selling your loan to banks for less than you contacted at) so you will be paying actual cash price which can vary. Just make sure that if price is a big concern you find out what rebates exist as well as what invoice pricing as well as holdback is for that manufacturer as well as how long the specific vehicle you are looking at has been on the lot. These things can all be used to your advantage but not always. Bottom line is you will get the best deal possibly simply from the standpoint of knowing what exactly you're paying for. Most people agree to a monthly payment and nothing more and then can't figure out why they're $10k upside down two years later. This is how dealerships make money.
BTW, if you're buying new you may want to see what financing incentives the manufacturer is offering or what a local credit union is offering for special financing. Sometimes you can get 0% or even 1.9% or in that range and it makes more sense to keep your cash liquid and finance your purchase because it's cheaper to borrow the money and have the liquidity for other items. This is a purchase the gubment will know about anyway so no real way to keep it off of the books so financing should be considered at least. I too enjoy paying cash but on new vehicles lots of times you can get the manufacturer to give you money for free so might as well take advantage of it. If you're doing it for financial reasons I would also suggest trying to find a similar vehicle that is 1 or 2 years old that is still under full warranty as they've already taken the largest depreciation hit. I'm not a fan of buying new anymore for that very reason and most people who are wealthy agree and drive 20 year old whoopties.
I purchased my last car with cash. Not check, not a debit card. Actual cash.
Had to take it out of the bank in two installments because of their policies. But the dealership was fine with it.
That being said state laws vary.
Dealerships love cash. They make more not less usually. The banks are the only ones who lose.
Actually, any cash transactions over $10k at a FDIC unsured bank requires a CTR and doing this over several transactions to avoid this is considering structuring and they're required to do so as well. There is also an MCR at $3k that isn't required but can be filled out for 'suspect' transactions. The CTR MUST be brought to your attention and the MCR can be done behind the scenes w/o you knowing.
Can you tell I was in both car sales and banking in a former life? ;-)
PS BCM: If you want to discuss more specifics of what you're planning/trying to do PM me or hit me up off of the forum and I'll help out a fellow Coloradoan as best I can. :cool:
brickboy240
11-18-13, 09:55
Most of the time when I have bought used cars with cash...I have gotten a MUCH better deal than if I was to finance it at the dealership or at my credit union.
Don't buy a brand new car! That is the biggest rip-off and waste of money ever. Even at 1.95 financing...the damn things depreciate so fast, the new car is simply a piss poor place to put money. Buy a 2-3 year old used car with a little warranty left. That way, you get some coverage and some other moron takes the front-end depreciation hit. It also helps if you know about cars, know what to look for on a used car and know how to do most of the maintenance/upkeep on your cars yourself.
We buy a 2-3 year old used car, either paying cash for it or finance it through our credit union for maybe 2-3 years, then drive the piss out of the thing for 8-10 years and take very good care o it along the way. We have better places to put our cash than a friggin car...like investments or real estate. You know...things that actually appreciate in value rather than go down like a car. We work for ourselves...not the auto dealerships, banks and finance companies.
Seriously...buying a brand new car is a total waste of money. No financial consultant worth his salt will ever tell you to buy cars brand new.
-brickboy240
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