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I am planning to buy a car with cash this weekend - first time car shopping on my own! I've found a decent used car and scheduled a test drive with a dealership, hoping to make a purchase. They've already lowered the price for me via email/phone negotiations, and the salesperson said there's potential for further discounts after I go there in person. To be honest I am pretty happy with their quoted price as it is, so I'm fairly confident of walking out with a new (to me) ride.

What I'm confused about is how a "cash" transaction actually works, particularly if I am not certain of the final price of the car. Should I get a cashier's check for my starting offer, and withdraw cash to cover the difference for the price they've already quoted me? Don't withdraw cash, put the difference on a credit card? Get several smaller cashier's checks - e.g. if they told me 14.5 and I wanted 14, get 10k, 4 x 1k, and 500 cash? (That way if it didn't work out and I went with something cheaper I wouldn't have to go back to the bank.)

I am not totally comfortable carrying around the entire amount in bills, although I could if it really is the best option. I never carry a balance on my credit card and would pay it off immediately if used for this.

7 Answers7

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I have in the last few years purchased several used cars from dealers. They have handled it two different ways.

  • They accepted a small check ~$1,000 now, and then gave me three business days to bring the rest as a cashiers check. They also insisted that I submit a application for credit, in case I needed a loan.

  • They accepted a personal check on the spot.

Ask them before you drive to the dealer. Of course they would love you to get a loan from them.

mhoran_psprep
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You could write a personal check after the final price has been set and you're ready to purchase. Another option would be to get the final price - then walk over to your bank and get a cashier's check.

Michael
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I usually get a cashiers check to cover about 90% - 95% of the expected amount (whatever I think is just below my wet-dream-price), and bring the rest in cash. That doesn't require so much cash to be carried. Alternatively you can write a personal check for the exact reminder, or go to the bank for the reminder after the deal is made - with the majority already paid in a cashiers check nobody would disagree.

Aganju
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When you pay cash for a car, you don't always necessarily need to pay cash. You just aren't using credit or a loan is all. A few options you have are:

  • Actual cash currency
  • A cashier's check
  • Bank deposit

Obviously no dealer expects anyone to just have the cash laying around for a car worth a few thousand dollars, nor would you bother going to your bank or credit union for the cash. You can simply get a cashier's check made out for the amount. Note that dealers may not accept personal checks as they may bounce.

After negotiations at the dealer, you would explain you're paying cash, likely pay a deposit (depending on the price of the car, but $500 would probably be enough. Again, the deposit can be a check or bank deposit), and then come back later on with a cashier's check, or deposit into a bank account. You would be able to do this later that day or within a few days, but since you've purchased a new car you would probably want to return ASAP!

Tas
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You can pay with a cashiers check or personal check. You can even pay cash, or combine payment methods. However, in the USA if you give the dealership $10,000 or more in actual cash, they will be required to fill out a form 8300 with the IRS.

Bert
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The very first time I bought a new car I wrote out a personal check for $5000 (this was a looong time ago!). And got a call from the sales person that he had called the bank and was told that I did not have that much money in my checking account! I explained that I had just that day transferred money from savings to checking. The sales person accepted that and there was never a problem after that.

user62501
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Ask the dealer to drive to the bank with you, if they really want cash.

Klaws
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