How to Buy a New Car With Cash

Buying a car for cash can be a smart move.

Buying a car for cash can be a smart move.

Buying a new car is the perfect way to get the reliable transportation you need, but the thought of years of car payments is enough to deter many would-be car shoppers. If you can buy that new car with cash, you can save yourself a lot of money on interest and free yourself from all those car payments. The key to buying your next new car with cash is to determine where best to get that money.

Gather all of your investment statements and make a list of all your assets. List the balance in each account and the interest rate you're earning.

Determine which of your accounts contains enough free cash to purchase the new car you want. Visit your local car dealer and make a deal for the car you want to purchase. Depending on the dealer, you might be able to negotiate a good discount by paying cash instead of financing the transaction. You can also lower your purchase price by shopping around and pricing cars on the Internet, even if you plan to buy the car locally. Arming yourself with an ad from an online dealer can help you negotiate a lower price. Finding out what the dealer paid for the car can help a great deal as well. Consumer magazines such as Consumer Reports can help in this regard, as can car value guides such as Kelley Blue Book and Edmunds.com. If your new car purchase can wait, you can get a lower price by waiting for the new model year to start and buying a leftover vehicle on the dealer's lot.

Cash in the account that is paying the lowest rate of interest. This will maximize the value of your cash payment and minimize the impact on your overall portfolio.

Deposit the cash from your investment in your checking account. Use the proceeds to pay for your new car and drive away.

Items you will need

  • Investment statements


  • Compare the returns you're receiving on your cash to the interest rate you can get on a new car loan. For instance, if you're earning 5 percent on your cash and you can finance a new car for only 2 percent, paying cash would not make sense.

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About the Author

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance writer since 2003. Her work can be seen on Credit Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.

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