Cash Or Loan

[ilovelexus2007]

Just curious, as a buyer, do we have more negociating power when we pay cash or take out a loan? I know finance mgr loves us to take out a loan, but what about sales manager?

[RX400h]

I don't think it makes a significant difference, since they get all the money at once, anyway. Leasing is a different story, but you should still negotiate the final price before signing.

[Jim Clark]

The salesman doesn't care. The finance manager does because they get commissions on the financing. They also love to sell the extended warranties, commissions are very good there.

With a lease, it can be difficult to tell what you're actually paying for the car. Some companies are offering very competitive financing packages. We leased one of our Audi wagons because the implicit interest was about 1%. We paid cash for the last few cars we bought.

[RX400h]

One our VPs here at work only leases (he has an RX400h and IS320) and recently convinced our CEO to crunch the numbers for himself. After an extensive number-pounding marathon, our CEO came to the same conclusion. The bottom line can always be lower if you lease (for many reasons). I didn't lease, but I may look into doing so, the next time around.