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Taking a look at some GM incentives this morning...these stand out:



November 2015 Malibu sales decline brings December incentive increase to $3500 + $500 lease conquest.

2014 Impala gets a big boost to $2500 and a $500 lease conquest.

Long in the tooth 2015 Equinox gets $1750 + $1500 lease conquest.

2015 Traverse gets $2250 + $1500 lease conquest.

2015 Tahoe has a $1250 owner loyalty incentive.

2014 Buick Verano gets 0%/60 Months PLUS $1500

2014 Buick LaCrosse gets 0%/60 Months PLUS $3000

2014 Cadillac ATS has $3000 incentive, $1000 bonus cash and $1000 owner loyalty (MY2004+).

2014 Cadillac CTS has an incredible $4000 incentive, $1000 in bonus cash and $4000 in owner loyalty (MY2004+).

2014 Cadillac XTS gets $5000 cash back and $2000 owner loyalty (MY2004+).

==================================================

NOTE: Above incentives are valid in the New York area. Check HERE for General Motors incentives based on your local zip code.
 

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Does anyone in the US actually pay cash for a vehicle? Or are the majority of new vehicle sales financed in some way?

I am moving to the US in January. I normally pay cash for a vehicle, as it puts one in the strongest negotiating position, so one gets the best price. Plus, the lack of interest is a saver. But all these "incentives" and "lease conquests" and zero-percent deals confuse and confound me. Is paying cash for a new vehicle in the US a fool's game? Am I better off taking advantage of cheap finance deals?

Surely there would be a cost to me somewhere along the way? Or would the interest earned on the unspent cash counter out any additional financing costs?
 

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Discussion Starter · #5 ·
Does anyone in the US actually pay cash for a vehicle? Or are the majority of new vehicle sales financed in some way?

I am moving to the US in January. I normally pay cash for a vehicle, as it puts one in the strongest negotiating position, so one gets the best price. Plus, the lack of interest is a saver. But all these "incentives" and "lease conquests" and zero-percent deals confuse and confound me. Is paying cash for a new vehicle in the US a fool's game? Am I better off taking advantage of cheap finance deals?

Surely there would be a cost to me somewhere along the way? Or would the interest earned on the unspent cash counter out any additional financing costs?
The answer to your question can be complicated based on what the manufacturer is offering, or simple, based on what you are willing to pay.

Some advise - Always take the cash from the manufacturer, and then try and couple the savings to a loan from your local bank. I have a vehicle on order for January delivery, will take the cash in effect (if any) at the time, and get a 1.87% loan for 72 months from my local bank.

So the short answer to your question is: "Both".
 

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I normally pay cash for a vehicle, as it puts one in the strongest negotiating position, so one gets the best price.
Are you sure about this? Whether you pay cash or finance, the dealer still gets the full purchase price upfront and the buyer makes payments to whoever holds the note.

If you have access to free cash or even cheap cash why would you use your own? Also, I'd say that financing through an automakers captive lending arm would more likely result in getting a better deal.
 

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Cash used to be king a long time ago, but Dealers and manufacturers make a lot of money off loaning you money. So...given that interest rates are generally at historical lows it may make better sense to take a low interest loan and then invest your cash that has a rate of return higher than the loan amount. It all depends on your personal situation. Maybe make a healthy down payment followed by a cheap loan? That is what I always end up doing. I hate having a loan but I do not want or have that kind of cash lying around to just pay cash for a new car.
 

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Does anyone in the US actually pay cash for a vehicle? Or are the majority of new vehicle sales financed in some way?

I am moving to the US in January. I normally pay cash for a vehicle, as it puts one in the strongest negotiating position, so one gets the best price. Plus, the lack of interest is a saver. But all these "incentives" and "lease conquests" and zero-percent deals confuse and confound me. Is paying cash for a new vehicle in the US a fool's game? Am I better off taking advantage of cheap finance deals?

Surely there would be a cost to me somewhere along the way? Or would the interest earned on the unspent cash counter out any additional financing costs?
The breakdown for new vehicles:

Leased: 29%
Purchased: 71%
- Of purchases, 26% are classified as "cash" but if a person writes a check off of their HELOC account, (so they can deduct the interest) it really is financed.
 

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2015 Cadillac XTS Platinum, 1989 Merkur XR4Ti, 1989 Merkur Scorpio
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It's always a good weekend to buy a GM vehicle.

Does anyone in the US actually pay cash for a vehicle? Or are the majority of new vehicle sales financed in some way?

I am moving to the US in January. I normally pay cash for a vehicle, as it puts one in the strongest negotiating position, so one gets the best price. Plus, the lack of interest is a saver. But all these "incentives" and "lease conquests" and zero-percent deals confuse and confound me. Is paying cash for a new vehicle in the US a fool's game? Am I better off taking advantage of cheap finance deals?

Surely there would be a cost to me somewhere along the way? Or would the interest earned on the unspent cash counter out any additional financing costs?
The easy answer is always take free money if you can get it... but make sure it's actually free. There's usually some cost.

I had one freak occurence where free really was free.
Got a cash advance check offer once that was no fee, no interest, no nothing for one year.
One time only, I've never seen it before or since. I couldn't believe someone sent my such a thing... just sign and here's money.
So I bought a '99 Chevy Tahoe (this was around 2007, so it was 8 years old or so) with it.
I balance transfered it twice, again, no fee, no interest, no nothing. Then I paid it off. Got free money for three years.
 

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I read that quote all the time, but it only matters if you plan on buying a vehicle and selling it as soon as you drive off the lot.
Unless you are keeping the car for 6-7 years you eventually will eat the depreciation. And of course if you keep it that long you are 3 -4years out of warranty and are paying full boat for all repairs. Except for limited production high end niche models, a car is not an investment. Hence this is why I have been leasing since 1989. I am always in a relatively new car, always under warranty and simply set a budget for what I want and I'm good. There is no inherent value in "owning" something you are upside down on till the wheels fall off. Paying cash is a loser since the depreciation will eventually bite you and you have forfeited the interest you would have gained had you left the money in the bank or in a blue chip investment. It is true you avoid the interest on payments, unless you get a 0 - 72. Admittedly, leases are not a good deal for those who put on well in excess of 15,000 miles a year or really abuse a car...which is never my case. I have never had to pay for excess wear and tear and always turn in a car that looks virtually showroom new every time. I simply hand in the keys and get a new set of keys in return on an all new ride. Painless.
 

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Or your neighbor brings this one home........... (9 months old, 9K miles and $20,000 off MSRP)

http://www.cars.com/vehicledetail/detail/620324192/overview/
Damn if I was going to be in the US for more than another year, I'd be all over that. I assume the big depreciation is because its classified as a "rental" even though its actually manufacturer vehicle (although, maybe that means it was treated even worse!)
 

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Unless you are keeping the car for 6-7 years you eventually will eat the depreciation. And of course if you keep it that long you are 3 -4years out of warranty and are paying full boat for all repairs. Except for limited production high end niche models, a car is not an investment. Hence this is why I have been leasing since 1989. I am always in a relatively new car, always under warranty and simply set a budget for what I want and I'm good. There is no inherent value in "owning" something you are upside down on till the wheels fall off. Paying cash is a loser since the depreciation will eventually bite you and you have forfeited the interest you would have gained had you left the money in the bank or in a blue chip investment. It is true you avoid the interest on payments, unless you get a 0 - 72. Admittedly, leases are not a good deal for those who put on well in excess of 15,000 miles a year or really abuse a car...which is never my case. I have never had to pay for excess wear and tear and always turn in a car that looks virtually showroom new every time. I simply hand in the keys and get a new set of keys in return on an all new ride. Painless.
Yeah, I hear you on that and am into the leasing model myself. As a rule of thumb you want to buy things that appreciate in value, and lease things that depreciate in value. I usually trade my vehicles every 2 or 3 years.

I only meant that as a practical matter, nobody buys a new car only to turn around and immediately sell it at a huge loss.
 

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Unless you are keeping the car for 6-7 years you eventually will eat the depreciation. And of course if you keep it that long you are 3 -4years out of warranty and are paying full boat for all repairs. Except for limited production high end niche models, a car is not an investment. Hence this is why I have been leasing since 1989. I am always in a relatively new car, always under warranty and simply set a budget for what I want and I'm good. There is no inherent value in "owning" something you are upside down on till the wheels fall off. Paying cash is a loser since the depreciation will eventually bite you and you have forfeited the interest you would have gained had you left the money in the bank or in a blue chip investment. It is true you avoid the interest on payments, unless you get a 0 - 72. Admittedly, leases are not a good deal for those who put on well in excess of 15,000 miles a year or really abuse a car...which is never my case. I have never had to pay for excess wear and tear and always turn in a car that looks virtually showroom new every time. I simply hand in the keys and get a new set of keys in return on an all new ride. Painless.
Well stated, I lease a lot too, but I don't lock myself in one way or another, sometime lease rates are whacked and I just buy.

Had a co-worker with a 2002 Sierra, he drove the wheels off it, (10 years and 140,000 miles) we figured his cost(s) vs. mine it came out like $10 or $15 more a month for me to lease than it did for him to buy, and the last 4 years he was driving an old clapped-out truck.


Damn if I was going to be in the US for more than another year, I'd be all over that. I assume the big depreciation is because its classified as a "rental" even though its actually manufacturer vehicle (although, maybe that means it was treated even worse!)
I know right, that is crazy $$$ off.
 

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Yeah, I hear you on that and am into the leasing model myself. As a rule of thumb you want to buy things that appreciate in value, and lease things that depreciate in value. I usually trade my vehicles every 2 or 3 years.

I only meant that as a practical matter, nobody buys a new car only to turn around and immediately sell it at a huge loss.
I think the BIG turn off for LEASING is the notion that you are PAYING forever for a car VS Buying you will see and end of payments and have something but most people will NOT keep the car long enough to ENJOY the payment free time
My shift manager HAS his/his wife's cars scheduled for the next 10 years or so based on payments IE HE buys a NEW one AFTER HER payments end, and when HIS end SHE gets a NEW one ETC

but as a Mechanic Warranty is of LESS concern then it would be to a LOT of NON-mechanical people
 
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