NEVER Pay Cash for Cars! (Here's Why)

Why you shouldn't pay cash for cars (especially at the dealer)
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Go ahead and pay cash for your car if you want to, but here are a few reasons why you might not want to. Paying cash for a car is a great way to stay out of debt, but sometimes if might not be the best way to leverage your cash.
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#honestfinance #carbuying

[@HonestFinance]

Enjoy the video! Comment below if you've got any questions, thanks :)

[@metaltera86]

Wife and I did this exact thing. We planned on paying cash for our 2020 grand Cherokee at a dealership but knew better not to tell them that. We went through financing and negotiated a great deal (with a full tank of gas added too) and all we have to do is pay the remaining balance before the first payment is due and no pre payment penalty of course

[@victropolis]

Let's compare always financing and constantly having a $500/month car payment and always owning and constantly saving $500/month for your next car. If you lose your job and you can't make your car payments, you lose your car, possibly still owe money on it, damage your credit, and damage your ability to purchase your next car on credit. If you lose your job and you own your car, you simply stop staving for your next car until you find another job. What are talking about here is the risk aspect of debt that Dave is always talking about. So, there is ALWAYS risk with financing, unless you always have money in the bank, available to pay the loan. We all like to think everything is going to be ok and nothing bad will ever happen to us, but that's just not realistic.

[@HonestFinance]

So true. It’s amazing how much can change in only a few years whether good or bad financially

[@hopefulincalifornia8615]

I wanted to add I have been told if you pay the car dealership anything over $10,000 in cash they fill out a form to send to the IRS .

[@kwlhk82]

It’s called CTR report

[@HonestFinance]

That’s a great point. I didn’t know that

[@Gio-nl7eg]

Why does this even matter though?

[@rubenmoreno5731]

@@Gio-nl7eg cause people take advantage of the government and get money under the table or are just criminals. They dont pay tax on that money and they cant have it in the bank cause the bank is always reporting too the IRS. So to avoid getting in trouble they hold large sums of cash outside the bank and pay for things off the books with cash

[@kirklagasse213]

@@Gio-nl7eg it really doesn't it just makes you more likely to be audited. So unless you're worried about the Irs it doesn't matter

[@MsHinds-cp1oq]

So you can make a down payment on the car & agree to a financing option but then pay off the rest the next month and save more (especially if they offer you a deal)?

[@HonestFinance]

Yup. As long as the terms allow you to pay it off without penalty

[@bobbyhendrix8536]

What if you have a poor credit score & can't finance a used car. Is it reasonable to pay cash!?

[@orlandorodriguez8507]

Great Video! I remember when I didn't see the value in car payments vs cash. I keep it simple--if it goes down in value it doesn't deserve my cash. If it goes up in value (or better yet cash flows) then it gets my hard earned money💰. It isn't that hard to beat 1.9 to 3 percent which is usually what I pay on a car loan.

[@dingdong5601]

Where are you getting these insanely low rates?

[@HonestFinance]

They’ve gone up quite a bit over the past 2 years

[@orlandorodriguez8507]

@@dingdong5601 A few of my local credit unions. Most I pay is 4 percent loans.

[@Hayycassie]

A few years ago, my dad was purchasing a new car at the dealership and I couldn’t understand at the time why he wouldn’t just pay off the car in cash. I loathe monthly payments/ being in debt like the next guy, but my dads strategy was having the cash to pay off the car invested in appreciating assets. I realized later how genius this strategy is and now I’m doing it too. Obviously you need to have the money in the first place, but if you do and you have a low interest rate on the car, it’s the strongest strategy imo. My dad ended up paying off the car with his capital gains. Anyway, great content on your channel! Keep it up thanks

[@dominickmmamotsosi6999]

Thanks. That's the best strategy

[@DanielaRojano]

*Can you suggest/talk about car insurance, like which is affordable?*

[@HonestFinance]

That’s a great idea. Thank you

[@donkeykongsdad1312]

I tell u hwhat

[@maxphilly]

And even if it wasn't fine by you it makes 0 difference lol so you could've just left that out all together haha 😆

[@HonestFinance]

😎

[@maxphilly]

@@HonestFinance I knew you'd see it my way

[@grandmagrandma4626]

Hog wash. Pay cash if u have it and be DONE 👍👍👍👍

[@sumtingwong8768]

"Honest Finance" yet uses click bait

[@Dematsa]

Honestly you wrong way to spread misinformation about buying a car

[@crow-vz5lx]

You can't leverage anything you don't own. Not paying cash for cars is so stupid You honestly think having a car payment every month is smart?! The difference between how you think about paying cash and the smart people do. Smart people don't use EVERYTHING they have in their account to buy a car. They buy quality USED cars. Because cars are not an investment like how you try to think. If you can save 25k then you already know how to budget. Smart people would use 10 k cash for a car. And 10-15 k for ONLY emergencies. Your plan is an old dangerous plan that has been around forever. Your strategy isn't smart. I need to add to this since after reading the comments below they're either fake or people are really this dumb. No car is an investment there are very rare cars that are. Even your precious BMWs Lexus Mercedes they all crash land in value. You're going to take a car and the moment you drive it off the lot , (depreciation)do you think you can turn right back around and sell it back to them for the same amount no way. Think about that for a second why do you think that is. You think it's smart to borrow money with an interest against something that goes down in value are you paying double for the same piece of crap. We'll have money from to pay it off. No you don't. Borrowing money is a fools game because you assume everything will stay the same and there will be no roadblocks no hiccups no job loss no pandemic no disturbance.. no brains

[@nathanneiding9501]

I think it’s a good strategy if you’re buying a car that you have the money for and you were going to just buy it outright..You get a better deal for the car because you can negotiate one and they think you’ll just make payments when you just make one and own it..

[@nathanneiding9501]

I would never buy a new car, I’m buying one that’s a few years older.. You just have to watch out for a pre payment penalty in your loan through the dealership..