I tend to assume cash is more desired by a dealer, especially one that is hurting financially. However, when they finance it, they get more money for it, right?
Which one puts me in a better negotiating position for a used vehicle?
I am probably really going to pay cash either way, I just want to know if I should withhold that information or mention it early?
Money talks. The last time I bought a vehicle, it was for sale for 6 grand. (95 sportster, a different market than a car) I talked him down to 5500 because it was old and the tires were bad, then told him that I had 5G cash. He could take my offer and I’d ride it home, or I would go off and spend my cash somewhere else. I rode it home.
I’m still riding it.
Dealers can make a lot of money off an uneducated buyer who doesn`t know what kind of rate he can get. So if you go in just hoping to get the dealer to finance, he may be able to sell you a loan for a few percent more than your credit justifies. That would make him a extra money without respect to the selling price, just like pushing overpriced warrantees can.
On the other hand, as an educated car buyer you might go in and say, “here’s my loan approval from my bank at 4%, if you can match or beat the rate I’ll finance with you and drive off with the car today”.
In that case he knows you’re approved, knows he can’t screw you on interest rate, and knows he can almost certainly match your bank’s rate. So I am just a consumer but I don’t see why that situation would be any different than cash in terms of negotiating the price. On the other hand, you should never do the first uninformed option.