When people say they "pay cash" for a car...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Usually certified check from bank.

Why? Why not just cut a regular check? That’s all we’ve had to do to pay for cars that cost between $55k and $75k. Is there something I’m missing?

Until about 4-5 years ago, you had to do certified checks. Now dealers have a way to verify the funds so regular checks work. Without verifying, they are not trusting you have $50K+ in funds and giving you the car

That is not true.

Car dealers have no issues accepting large personal checks. This is not new.

[Anonymous]

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

This.

But only when they offer 0% loans.

It is foolish to waste money on interest on a car loan unless that is your last resort.

Have a monthly car budget that is slightly below your means. Wait for a longer term 0% offer. Pay a large cash deposit to bring your monthly car payment below your budgeted car allowance budget. Pay 2 payments your first payment so you are one month ahead of payments. Put the rest on autopayment, and build credit without overspending or blowing past your budget. While you are paying off your 0% car loan, put a little away each month to rebuild your cash deposit for your next car. Rinse. Repeat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

Don’t you have a credit card? That’s enough. Why pay extra on a car when you don’t need to.

You need to brush up on how credit scores are calculated.

Credit cards are less valuable debt and fixed term loans are more valuable debt that raises your score.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

Don’t you have a credit card? That’s enough. Why pay extra on a car when you don’t need to.

You need to brush up on how credit scores are calculated.

Credit cards are less valuable debt and fixed term loans are more valuable debt that raises your score.

Not having a mortgage isn't a smart way to raise acredit score. Mortgages are cheaper than car loans.
But regardless, someone wo paid off a house is extremely unlikely to have credit costs impacted by a car loan.

[Anonymous]

Anonymous wrote:I gave them a couple thousand in cash and wired the rest. They wanted the cash in order to let me take the car before my wire cleared.

Don’t come at me- I’m not wealthy or out of touch but I’ve never financed a car. When we couldn’t afford nice cars, we just paid cash for what we could afford. You pay so much more over the life of a car when you finance it. Insurance costs a lot more too. I know neither set of parents financed cars either. IMO house mortgage should be your only debt.

Insurance only costs more because coverage is required for damage to the car. It's not a higher rate for the same coverage.

[Anonymous]

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

Huh? It’s nice for what reason?

I guess if the dealer is offering very low cost financing (ie less than what you can earn on a money market).

For example, it’s a no brainer to take advantage of a 0% offer.

[Anonymous]

I did this yesterday. I wrote a check from my personal account for 60K.

[Anonymous]

Cash App.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Usually certified check from bank.

Why? Why not just cut a regular check? That’s all we’ve had to do to pay for cars that cost between $55k and $75k. Is there something I’m missing?

Until about 4-5 years ago, you had to do certified checks. Now dealers have a way to verify the funds so regular checks work. Without verifying, they are not trusting you have $50K+ in funds and giving you the car

That is not true.

Car dealers have no issues accepting large personal checks. This is not new.

We just did this with a car dealership in Bethesda that everyone knows. We have bought a car for cash with them before and we took that car to them for service for 7 years, so maybe they just trusted us. But, they didn't even run our credit and we wrote them a personal check. I can't remember if they did more checking the first time we bought with them, but the car was sitting in my driveway 30 minutes after I wrote that check, so it definitely had not cleared the bank.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Usually certified check from bank.

Why? Why not just cut a regular check? That’s all we’ve had to do to pay for cars that cost between $55k and $75k. Is there something I’m missing?

Until about 4-5 years ago, you had to do certified checks. Now dealers have a way to verify the funds so regular checks work. Without verifying, they are not trusting you have $50K+ in funds and giving you the car

That is not true.

Car dealers have no issues accepting large personal checks. This is not new.

Well in my experience with a 750+ credit rating and purchasing 8+ cars with "cash" over the last 25 years, it's only the last 2 (in last 2 years) that the dealer didn't require a certified check. The most recent were able to "verify" the funds electronically now. So just stating my experiences with $50K+ vehicles. We always do the max on CC they allow (which varies from $2/3K up to $10K max we were allowed) then write a check for the rest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

Don’t you have a credit card? That’s enough. Why pay extra on a car when you don’t need to.

You need to brush up on how credit scores are calculated.

Credit cards are less valuable debt and fixed term loans are more valuable debt that raises your score.

Not having a mortgage isn't a smart way to raise acredit score. Mortgages are cheaper than car loans.
But regardless, someone wo paid off a house is extremely unlikely to have credit costs impacted by a car loan.

Correct.

I was responding to the person who said that credit cards alone are enough to give you a high credit score.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Although we can pay cash, we take out the longest loan available, put both our names on the installment contract, put down a large down payment to make the monthly payment roughly $250. With our house paid off, it's nice to keep some type of credit ongoing in our name.

Don’t you have a credit card? That’s enough. Why pay extra on a car when you don’t need to.

+1
This is silly - especially on a long loan, you should add up what you're actually paying for the car and look at the crossover for what you will still be paying vs what it's worth. That would be depressing. You don't need a car loan to keep your credit up as I assume you have at least one credit card, insurance bills and house utilities. This actually adds zilch to whatever you are aiming for

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Usually certified check from bank.

Why? Why not just cut a regular check? That’s all we’ve had to do to pay for cars that cost between $55k and $75k. Is there something I’m missing?

A personal check could bounce. A certified check carries a guarantee from the bank that the funds are available and set aside to cover this specific transaction.

I guess if the dealer thinks you’re going to bounce a check…

I’ve never had this issue, even with checks in the hundreds of thousands range.

[Anonymous]

Anonymous wrote:Usually certified check from bank.

Funny: when we bought our last car, I also expected needing a certified check, but they were like: regular check is fine. If it bounces, we know where you live. (<- car dealer sense of humor.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:Usually certified check from bank.

Funny: when we bought our last car, I also expected needing a certified check, but they were like: regular check is fine. If it bounces, we know where you live. (<- car dealer sense of humor.)

+1. I wonder though if there is some racial profiling going on. We’ve always just written regular checks. But maybe that’s easy as a suburban white family.