by Ray Shefska | Last updated Jun 9, 2025 | Car Buying
Here at CarEdge, we get a lot of emails from car buyers like you looking for advice on how to get the best car deal possible. The question “should I pay cash for a car?” Comes into our inbox daily. If you’ve managed to save up enough cash to buy a car, kudos to you. Now, it’s time to be strategic about how you use it to get the best car deal possible.
Most people assume that telling a car dealer that you’re paying in cash is a negotiating tactic and will get you a better price. Here’s the truth: it doesn’t. Saying that you’re paying with cash kills your negotiating power.
If you’re wondering, “should I pay cash for a car?” The answer is complicated. Yes, pay the full amount as soon as possible. But don’t walk in with a briefcase of cash and slam it on the salesperson’s desk.
To understand how to answer this question, we need to begin by looking at how dealerships make their money.
How Car Dealerships Make Their Money
Car dealerships make about a quarter of their profit off car sales, yet vehicle sales make up about half of their revenue. That’s because of the slim front-end margins on most car deals (especially for new cars, used cars are a bit of a different story.)
You’ve heard me say it before, and you’ll hear me say it again—selling cars is merely a means to sell other products like finance options, insurance products, service, and parts.
Car dealerships make most of their money in the service department, but when it comes to vehicle sales, dealerships make their money in the Finance and Insurance (F&I) office. The F&I office is referred to as the “back-end” of a car deal. The “front-end” is what you spend time negotiating with the salesperson. The irony is that dealers are incentivized to sell as many cars as possible (frequently at a loss) simply to make money on the back-end (and from manufacturer incentives).
If you’ve ever bought a car before, you’ve heard a salesperson ask you “do you plan to finance the vehicle?” This is because if they know you plan to finance (and especially if you intend to finance through the dealership) they know the dealership can make money on the back-end of the car deal. Every car dealership out there will ask you to fill out a credit application so they can secure financing options for you. When they do this, they bake profit into the numbers. This practice is a significant source of profit for a car dealership.
So, if you walk in and say you’re paying with cash, you’re telling the salesperson that you’re going to eliminate the dealership’s primary source of profit.
What do you do? You take out a loan.
Take Out A Loan Instead
Let’s say you have all this cash, and you want to buy your car at the best possible price. It should be as simple as buying a meal at a restaurant, right? Unfortunately, that’s not the case.
You’ll pay far more for your car if you ask to pay for it all upfront with cash. That’s because the dealership will not be willing to negotiate as much on the front-end of the car deal since you will not become a sales opportunity for the back-end of the deal (aka in the F&I office).
So what should you do? Take out a loan through the dealership and pay it off immediately (or refinance it). Doing this will get you a much lower price than paying with cash at the dealership.
Like we discuss in depth in Deal School, you want to negotiate the out the door price of the vehicle with the salesperson. By informing them of your interest in financing your purchase through the dealership, you’ll find that the salesperson will be more likely to negotiate on the front-end of the deal.
One rule of thumb is that if it’s taxable, it’s negotiable. If a fee is not taxed, you can’t negotiate it down or away. It’s important to know exactly what you can negotiate.
Here’s the essential part of the entire process: make sure the loan does not have a prepayment penalty. If it does, walk away or ask for a different lending option. Fortunately, most loans do not have a prepayment penalty. Typically only exclusive financing options from captive lenders (the manufacturer’s lending institution) have these clauses.
It’s advisable not to tell the dealer that you plan to pay off or refinance the loan immediately. Dealerships incur “chargebacks” when this happens, so let this strategy be our little secret, and not something you blurt out to the F&I manager.
When you’re in the F&I office, decide if you want any of the ancillary products like an extended warranty, and then go through with the rest of the paperwork with the F&I manager. Once you’re happy with all the numbers, pay your down payment, sign the paperwork, and drive away.
Pay Off Your New Loan
You’ve got a brand-new car and a brand-new loan. It typically takes a lender about a week to put a new loan on the books once they receive it from the dealership. Wait about two weeks, then call your lender and ask for the payoff amount. They’ll tell you exactly how much you have to pay to end your loan. Send them a check or wire transfer, and you’re done.
If you don’t have enough cash to pay off your loan immediately, look to refinance the existing loan. However, if you took advantage of a rare zero-APR financing incentive, don’t expect to find anything better out there.
Remember that credit checks within a 30 days period for an auto-loan are grouped into one “hit” on your credit, so you don’t have to be too concerned about getting your credit run once again to find refinance opportunities.
You may have done it by way of a loan, but this is the best way to use your cash to buy a car. If you skip the loan and pay for the car entirely in cash, you’ll end up paying far more than if you take out a loan and pay it off early.
Assess Your Financial Situation
Now that we’ve unveiled our master plan for how to use your cash most effectively to buy a car, we should take a step back and ask if it’s a good idea in the first place.
If you’re asking “should I pay cash for a car,” we’re assuming you have a hefty savings account and financial portfolio. However, if paying cash for a vehicle will drain your savings completely, it might make more sense to finance the loan and put a large amount down for your down payment.
It’s also worth shopping around for different financing offers. No matter what, we always recommend having a pre-approval from an outside financial institution before you go to the dealership so that you have leverage when you are in the F&I office. In some cases, captive lenders offer special financing offers (like 0% APR) that no outside lender can beat. In those cases, financing through the dealership is the only logical option.
Not Directly or Not at All
Since you now know paying for a car with cash won’t get you a better deal, you might want to reconsider the entire idea. Is this the best use of your cash? If you still think it is, make sure you take out a loan and immediately pay it off instead.
It’s vital that you don’t tell the salesperson, sales manager, or F&I manager that you’re going to pay off the loan immediately. They really don’t want to incur the chargeback.
Instead, go through the motions of taking out a loan and simply pay it off a week later. With this strategy you’ll get the best car deal possible.
by Ray Shefska | Last updated Jan 23, 2025 | Car Buying, Dealership Operations
Anyone who has ever held a job can tell you a few things that were annoying about it, even if it was their absolute dream job. Selling cars is no different; there are several things customers do that simply annoy car salespeople. It’s almost as if some people are trying to learn how to piss off a car salesperson!
If you want a smooth, pleasant car buying experience, it pays to know what customers do that gets under a car salesperson’s skin. If you want to know how to piss off a car salesperson so you can avoid doing those things, you’re in the right place. It’s time to take a look at five things customers do that frustrate car salespeople.
Come in Right Before Closing
If you’ve ever held a job that interacts with the public, having a customer come in right before you close is likely pretty high on your list of annoyances. Car salespeople are the same.
Your average car dealership is open from 9 AM to 9 PM, otherwise known as half a day. Most salespeople are scheduled to work for a fair amount of these hours.
So when you come in looking to buy a car at 8:45 PM, the salesperson greeting you will be at least a little annoyed, even if they hide it under a smile. That salesperson was about to leave the dealership and enjoy their free time, but now they might be staying until midnight to sell you a car.
Don’t get us wrong, coming in right before closing and saying you want to buy a car will make a car salesperson and sales manager happy; they’re there to sell cars. They just won’t be as happy about the lack of sleep before the next workday.
If you want to know how to piss off a car salesperson, coming in right before closing is probably the easiest way to do it. If you can, try to go into a car dealership three to four hours before the dealership closes. That gives you time to go through the sales process without making a salesperson stay at work later than they’d prefer.
Kids Running Wild Through the Dealership
The car salesperson is there to work with you to sell you a car you love at a great price. They aren’t there to babysit your kids, and they certainly aren’t there to remind you to keep your kids under control.
All too often, parents bring their kids with them into a car dealership to buy cars. There is nothing wrong with that inherently, but once the kids start climbing through showroom cars, honking horns, and spilling drinks in vehicles, it’s time for the parents to step up. Yet, parents often act like there’s nothing wrong with what’s happening.
As a reminder, most car dealerships will have cars ranging from $15,000 to well over $100,000. It’s inconsiderate for parents to let kids use these expensive vehicles for their kid’s entertainment.
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Do you want to know how to piss off a car salesperson? Bring your kids in and let them run wild. In which case, you’ll be forcing the car salesperson to remind you to parent your kids. This could lead to an awkward conversation with you about needing to come back without your kids to continue the deal. Nobody wants that.
If you want to bring your kids with you to buy a car, that’s fine. Just be prepared to parent your children when they get bored.
Bringing a Check for The Wrong Amount or Ditching the Deal
This annoyance isn’t as prevalent as it used to be, but it still happens.
You see, back in the ’70s and ’80s, people weren’t able to walk into a dealership and drive off the lot with a new car on the same day. Instead, they’d do all their negotiations and then fill out a credit application. The salesperson would call the bank and give them all of the buyer’s information, and then they’d reach a decision about a loan.
To hold the car, the buyer would leave a small deposit, usually around $100.
After the salesperson painstakingly went line by line with the bank rep to get them approved, people simply wouldn’t show up the next day to finalize the sale. That means that the salesperson missed out on a commission, and they wasted their valuable time processing a credit application.
Back then, if the buyer didn’t need a credit application and were going to pay by check, they’d often come back the next day with a check that was $50 cheaper. It seems, they figured they could save a little bit of money right at the end.
Looking to find out how to piss off a car salesperson? Put down a deposit on a vehicle and then never come back. When you put down the deposit, that salesperson cannot sell that car to anyone else. If it’s an expensive car or an in-demand car, they could miss out on other sales while your deposit is holding the vehicle. If you don’t come back to finish the deal, you better believe you’ll have a pissed off car salesperson.
This one is easy to avoid; come back to finish the deal.
Not Bringing a Driver’s License
This one is simple: you need a driver’s license to test drive a car. The number of people who show up to a car dealership and ask to test drive a car without bringing their driver’s license would astound you. It seems like common sense, yet it still happens all the time.
Wanting to know how to piss off a car salesperson? Get to the point where it’s time for a test drive and then say you don’t have your license with you.
Avoid this annoyance by bringing your driver’s license with you when you go to the dealership.
Be Confident and Honest When Saying “No”
Honesty is always the best policy, even when dealing with car sales. Being honest with the car salesperson is respectful and persuades them to continue being honest with you.
If you don’t like a car or an offer, confidently say no. Don’t start talking about needing to talk it over with your spouse. Just look the salesperson in the eye and say that the car isn’t the right fit for you or that you don’t like the deal.
Don’t be worried about hurting the car salesperson’s feelings. They hear no all the time. They heard it before you arrived, and they’ll hear it again when you leave. Just be confident and honest with your “no.”
Now You Can Start Off on the Right Foot
Every car salesperson wants to make a sale, but an annoyed salesperson is less willing to work with you. Learning how to avoid frustrating them will go far in creating a pleasant, straightforward transaction. Plus, it shows you respect the car salesperson even when you’re on opposite sides of the negotiating table.
Now that you know how to piss off a car salesperson, you’re in a good position to start things off on the right foot. Show up well before closing, parent your children if they act up, bring your ID, complete your deals, and be confident if you say no.
by Ray Shefska | Last updated Apr 25, 2023 | Car Buying, Used Cars
Whether you’re going through eBay, Craigslist, or Facebook Marketplace, you need to know how to buy a car from a private seller. We’re here to arm you with information you can use to secure a reliable car and avoid scams (which are all too prevalent on these peer to peer websites).
You’re about to learn a few easy-to-remember things about how to buy a car from a private seller that will guarantee you are purchasing a roadworthy vehicle. Our hope is that you don’t end up like Riley, or John.
Make Sure the Private Seller has the Title
You should ask if the seller has the title to the car before you even agree to meet them. In your first or second message to them on your chosen platform, ask if they have the title. If they say yes, you should inquire if the title is in their name.
That last part is vital – the title must be in their name. Something you should know about buying a car from a private seller is that some people “jump” the title. This term means they’ve purchased the vehicle from another seller and are now trying to sell it to you without putting the car in their name first. While legal, jumping the title is extremely risky.
You want to avoid someone who is attempting to jump the title because it may indicate they have stolen the car. Surprisingly, some car owners store their title in their glove box (please, never do this!). If someone steals that car that has the title in the glove box, not only do they have a car, but they also have the title. All they have to do is sign the back of the title, and they can sell the car to you.
If you end up buying a stolen vehicle, you’ll end up losing the car. It will likely happen when you go to transfer the title to your name. If you’re lucky, they’ll only take the vehicle and bring you in for questioning. If you’re unlucky, well, it could get much worse.
Of course, purchasing a stolen vehicle is a worst-case scenario. The point is that the person whose name is on the title should be the person that you’re dealing with. Even if the person selling the car claims the title is in their spouse’s name, don’t buy that car.
How to Buy a Car from a Private Seller: Get a Carfax Report
It’s simple; you need to know the history of the vehicle you want to buy. While an honest seller will tell you everything they know, they might leave something out or not know the entire story.
Grab the VIN from them before you meet up and buy a Carfax report (are those reports trustworthy?). The cost of a Carfax report is well worth it to know everything about the vehicle.
The main things you’re looking for on the report are:
- Has the car been recalled?
- Is this a salvage title?
- Has the car been in any accidents?
Another alternative to a Carfax report is to contact your insurance company. They have a wealth of information at their disposal that goes beyond what you could find by Googling the VIN.
However you go about it, be sure you have all of the information you can find about this vehicle. You need to be positive that you aren’t buying a salvage title (unless you want to) and that you are aware of every accident the car has been in.
How to Buy a Car from a Private Seller: A Mechanic Inspection
We always suggest getting a pre-purchase inspection before buying a car, whether you’re buying from a private seller or a dealership.
A pre-purchase inspection is a specific type of vehicle inspection that a mechanic performs in which they look over the car for any apparent issues. They inspect it for any signs of damage, leaks, and any parts that will need to be replaced soon.
The goal of a pre-purchase inspection is to get a well-rounded picture of the vehicle that you’re looking to buy. Depending on the mechanic, they’ll likely give you an overall opinion: “yes, buy this,” or “no, avoid it.”
Combined with the Carfax report, the pre-purchase inspection paints an image of the car’s history and gives you a glimpse into the future. You might discover that the lower control arms are going out or that the alternator is failing. This information can be used to negotiate with the seller or help you decide to avoid buying the vehicle altogether.
Something you should know about how to buy a car from a private seller is that if the seller refuses to let you have the vehicle inspected, just walk away. They could be hiding something intentionally, or they may just be a pain to work with. If they’re worried about handing you the keys to take it to the mechanic, have them go with you.
Be Careful How You Pay for the Car
Due to the price tag and people’s naivety, the private car selling world is filled with various scams. You can avoid most of them by following one piece of advice: if it sounds too good to be true, then it is.
The most common types of scams that we see have to do with how you pay for the car, such as:
- Paying with Western Union (this one is common when they don’t let you see the vehicle)
- Ask you to pay entirely with gift cards
- Want you to pay with cryptocurrency (this isn’t always a scam, but cryptocurrency is often used in scams)
You should only pay for the car with traditional forms of payment. Of course, you should only buy a car you’ve seen in person. That’s right; some scammers try to get people to pay for vehicles they don’t even have.
How to Buy a Car from a Private Seller: Arm Yourself with Information
Information is your greatest tool when it comes to buying a car from a private seller. You should know everything about the vehicle that you possibly can. You should also know simple tips, such as making sure the seller is listed on the title and not paying for the car with strange forms of payment. By arming yourself with information, you’ll be ready to buy a car from a private seller.
by Zach Shefska | Last updated Apr 25, 2023 | Car Buying, New Cars, Used Cars
You’ve heard us say it before, and you’ll hear us say it again; December is the best month to buy a new or used vehicle. End of year sales promotions are typically the most aggressive of the year, dealerships are determined to hit their month-end, quarter-end, and year-end volume-based sales objectives, and manufacturer’s budget their largest share of dollars to go towards December marketing activities. December is the best month to buy a car, truck, or SUV, but that doesn’t necessarily mean every “deal” on a dealers lot is a good one.
This year we commissioned our first ever CarEdge research project, the 2020 Negotiability Report. With our data partner MarketCheck, we analyzed nearly 2 million vehicle listing pages to determine which vehicles dealers should be desperate to sell in the ten largest cities, and Detroit (because if it has to do with automotive, then you have to include Detroit, it’s a rule).
The results were interesting. It’s incredibly clear that there is an oversupply of some vehicles in certain areas, while there is a lack of supply in others. Take for example in the Chicago, IL region. We found that half of the most negotiable new cars in Chicago are Audi’s. Could that have something to do with the fact that there are 7 Audi dealerships in the city, and maybe that is causing a bit of an oversupply? Sure. What does that mean for you if you’re in that area? Go get yourself a great deal on an Audi!
The methodology for this research project was simple. Just like we have a Negotiability Score in the CarEdge app, we calculated the same score across all vehicles in each of the eleven regions to determine what their score is. We then ranked the top ten for new and used in each region. If you’re unfamiliar with the Negotiability Score, it is a 0 to 100 score we assign to any vehicle identification number (VIN), and it is calculated by analyzing a vehicle’s “time on lot” (how long it has been listed for sale by a dealership), and the local area’s market days supply (an industry metric to determine how “in demand” a vehicle is).
To access the full report, please click here: https://caredge.com/negotiability-report-december-2020/
For links to each specific region, refer here:
New York: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_New_York
Los Angeles: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Los_Angeles
Chicago: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Chicago
Dallas: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Dallas-Fort_Worth
Houston: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Houston
Washington, DC: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Washington_DC
Miami: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Miami
Philadelphia: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Philadelphia
Atlanta: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Atlanta
Phoenix: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Phoenix
Detroit: https://caredge.com/negotiability-report-december-2020/#Most_Negotiable_Vehicles_in_Detroit
by Ray Shefska | Last updated Apr 25, 2023 | Car Buying
Having bad credit, or no credit, and wanting to buy a car is not impossible. Depending on the rest of your financial situation, you can absolutely learn how to buy a car with no credit.
We’ll be focusing on the no credit or bad credit aspects of car buying in this article. For more comprehensive advice on car buying, please look over our in-depth case study that covers the general concepts involved in buying a car.
Are you ready to learn how to buy a car with no credit, or with bad credit? Let’s get started by really nailing down the definition of these terms.
What is “No Credit” and How to Buy a Car with No Credit
No credit means you have no credit history. You have no credit profile because you’ve never established any sort of credit history. As far as the banks and lenders are concerned, you don’t exist.
Yet, here you are, trying to buy a car. You definitely exist. What do you do?
You’ll need to save up and put a ton of cash down. You’ll also need to have all your paperwork in order, along with having plenty of quality references. Keep reading – we’re about to cover all of this in detail.
What is “Bad Credit” and How Does it Impact Buying a Car?
Whereas no credit means you simply don’t have a credit history, bad credit means you do have a credit history, and it’s not good.
Bad credit, which is officially known as subprime, is a credit score that’s between 500 and 600. If you’re below 500, that’s considered super subprime and would also fit within the ‘bad credit’ label.
Having bad credit indicates to any potential lenders that you have not handled past loan obligations well. You might have taken out an auto loan and failed to make payments, or you took out a few credit cards and let them go into collections.
Either way, now you’re in a situation where it’s hard for finance managers at dealerships to convince lenders to approve you for a loan.
If your credit score is over 500, you might be able to find a lender who will loan 90% of the value of the car. That leaves you to cover 10%. If your score is below 500, they might cover 75% of the car, leaving you with 25%.
This means that you should start saving because you’re going to be expected to put more money down than someone with a higher credit score.
It’s worth noting that you should avoid visiting multiple dealerships to get approved by a lender. Doing so can harm your credit score by stacking up hard inquiries. In theory, when shopping for a similar item (a car) over 30 days, it counts as one credit inquiry. However, it’s truly unclear how the credit bureaus interpret multiple inquiries for subprime candidates.. Avoid multiple dealerships if at all possible and work with one or two.
Be realistic about the cars you are looking at. A bad credit score will decrease your buying power substantially, even if you are putting a good amount of cash down. Consider buying a certified pre-owned vehicle to get the most value out of your buying power.
Lastly, be ready to have a higher APR than what’s being advertised. For people with a subprime credit score, the average rate for a new car is 12.15%, and for a used car it’s 16.78%.
How to Buy a Car with No Credit: Put A Lot of Cash Down
If you’re looking into how to buy a car with no credit, your first plan of action is to save up as much cash as possible. The more cash you’re able to put down, the better.
If you’re looking at a $10,000 car and you have $3,000 down, the finance manager has a great argument with the lender about why they should approve someone with no or bad credit: you don’t want to lose $3,000.
Conversely, if you have $300, the argument falls flat.
People who investigate how to buy a car with no credit often end up going to “buy here, pay here” car lots. Be warned, those types of places will require even more cash down than most dealerships. Essentially, the cash down amount that they require will cover their investment in the car. That way, if you stop paying the loan, at least they got out what they paid for the car.
Sidenote: If you’re going to work with a “buy here, pay here” lot, make sure they report your loan to credit bureaus.
Get Your Paperwork in Order
Before you even visit the dealership, get all your paperwork in order. Anyone wanting to know how to buy a car with no credit should know that you’re going to have to prove that you have a job and stable personal finances. You should prepare:
- Several months of pay stubs that back up your income claim
- Utility bills that show your address
- Signed lease in your name, if renting
- 6-10 references, including names, addresses, and phone numbers of people who know you personally or professionally
All of this paperwork forms a well-rounded image of who you are, financially speaking. It helps lenders approve your request, even if you have no or bad credit.
Become a Member of Your Local Credit Union
Another way to go is to look for financing options outside of the dealership.
Joining a credit union is the best thing you can do if you’re looking at how to buy a car with no credit and want to look outside of the dealership for options. That’s because credit unions look at members with a more favorable eye than other lenders. You might be able to secure an auto loan with more favorable interest rates than if you went to the dealer, too.
Credit unions are easy to join. There are all types of credit unions, look for one in your area, and join up.
Can You Buy A Car with No or Bad Credit? Yes!
You’ve now learned that if you’re looking at how to buy a car with no credit, or bad credit, you still have options. Your lack of a credit profile, or your bad credit profile, doesn’t prevent you from owning a vehicle.
Save up for a large down payment, bring all your paperwork, and be ready to have a higher APR than advertised. You’ll be able to drive away from the lot happy.