Why are dealers pushing financing new cars?

Hello. I’m a bit frustrated. I’m in the process of buying a new truck. I’ve gotten several bids from competing dealers. However I am wanting to pay cash. The dealers are fixated on me getting financing when I have told them I’m wanting to own the truck outright free and clear. They are still stubborn and quoting higher prices just because I want to pay cash. What the heck are they doing, are they wanting to lose a potential customer? Is this a new thing, dealers wanting customers to finance a car even if they can/want to pay cash? Go figure!!

It’s a sales commission. They make money on the financing. Never tell the dealer you are paying cash. In fact usually it makes more sense to finance it and then pay it off in a month or two. Everyone is happy then. Doing it your way is like leading with your chin and then wondering why you got hit.


If you can get 0% financing go for it!

We got an extra 500.00 off by using Nissan 0% credit . All the dealer asked for was that we make 4 payments before paying the vehicle off . That way they got a bonus payment from Nissan credit .


I got an additional $500 off when I agreed to finance mine. Then paid it off 60 days later.

Yep. I financed my last car because they knocked a grand off the price. I paid off that loan a month later.

My mom thinks like OP. “I have cash in hand, and I’m gonna tell them because they love cash buyers.” No they don’t, because they make less profit off of cash buyers. There’s no convincing mom, though. Hopefully OP is more malleable. :wink:

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When my son bought his Hyundai…the dealer would give him $1,000 off…but he had to keep the loan for at least 6 months.

Dealers get incentives from the banks to push financing through them.

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Yeah, I thought it very strange that my dealer didn’t want me to keep the loan for any length of time. They said as long as I took out the loan, they’d get the credit so they didn’t care. I only made one payment before paying it off.

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Dealers get frustrated with me because I keep the car price, financing and extended warranty as separate items to negotiate. They always try to blend them together for a low monthly payment for a lot of years. One time I financed a car when GM offered a rate lower than the bank was paying on savings accounts. The other time was when I bought my current Caravan from Enterprise and they offered a sweet financing deal. I did pay it off early . I never get the extended warranty, but play them along until I get the best deal on the car price.


Funnily enough, I almost always get (or have whoever I’m advising get) the extended warranty. Why? Because I have yet to fail to get the dealership to agree to throw in a clear bra if I buy the warranty. The warranty is usually a few hundred less than the clear bra, and that clear bra is valuable now that every car has paint going all the way down to 6 inches above the road.

It’s a win win - it costs the dealership vastly less than they charge to install the clear bra, and the warranty costs them absolutely nothing to sell, so they can show an enormous profit on that, and a break-even on the clear bra (they always write it up to show their cost on the clear bra and deduct that from somewhere else in the transaction). Meanwhile, I get the only post-sale accessory I care about at a discount, and a warranty that’s probably worthless, but for my purposes free.

Dealers have been doing this forever. It’s nothing new.

Bought a used car a month or so ago, lowest interest rate they could get was 5.69, 2.69 from credit union, no grief no hassle. Got a few perks, no big deal. Only financed half of the price, will probably pay it off soon.

Asking why dealers are pushing financing is not that different from asking why dogs lick their nether regions. In both cases, the answer is…
Because they can.


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The games really began once my dad said he was paying cash, ended up at the right price including the trade in eventually but it was a real battle. Not the easy buying experience that was expected buying from a Costco dealer but i’ve found similar complaints about that dealer.

I looked into costco, $500 off, could do better solo while I was shopping, just my 2 cents.

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It wasn’t my call but it looked like the local dealer had the same internet pricing without going through the other hoops. Truecar would have only saved me $50 when I bought the Subaru.

Dad went more for Costco’s customer service than the lowest deal.

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Like @SteveCBT, the few times I’ve bought a car I kept the components of the deal separate. Whoever both treated me with respect and agreed to the best price on the car made the sale. Only then did I discuss how I would pay.

Each time I was able to pay the least by not financing. But I had both cash in the bank to pay outright and had secured full approval in writing from a bank for a loan if needed. That way I could evaluate which method of payment worked best – cash, bank loan, or financing through the dealer.

For one new car I got best price available between five dealers and only then revealed I had cobbled together two separate special rebates not advertised and only available in an overlapping ten day period plus a third rebate built up on a particular credit card. Net price ended up being about $8,000 less than the going local average best price. It’s unlikely I’ll ever pull off that a good a deal again.

Two important things to remember; do your homework ahead of time and be willing to walk away from a bad deal. I walked away from one dealer last time I bought a car when I was brazenly lied to about the supposedly new, unused, undamaged, clean car I negotiated for only to have a seriously damaged and sloppily repaired vehicle with filthy interior and over 400 miles on it trotted out and presented to me. Then the excuses and attempt to keep me from leaving began. I flat out said they’d blown their one chance to be honest. No second chance. No deal.


Dealers get frustrated with me because I buy cash and NEVER EVER will buy an extended warranty.


Does the dealership some times roll in the total of the finance charges into the pay off sum?

No, the payoff is typically calculated based on “the rule of 78’s”. Bear in mind that the payoff is calculated by the financial institution, not the dealership.