To Pay Cash or Not to Pay Cash, That’s the Question

If you're weighing whether to pay cash, consider these factors:

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¶Is the vehicle you want available with a zero-percent loan, in a length that equals the years you will keep the car? If so, then check out the interest rate you would get on a savings or money market account during that time. You may be better off keeping your money in the bank.

¶Many auto companies offer a one-pay lease, which allows you to make a single payment equal to what you would make in lease payments over several years. Again, check out the interest rate (also called the money factor) that this lease carries.

¶If you've decided to pay cash, shop online first. Find out the going prices in your area. Get quotes from area dealers, print them out and take them with you.

¶Be clear with the dealer that you are paying cash. If the dealer does not honor the price given because you are paying cash, leave.

¶If you are financing elsewhere so that you can bring cash to the dealership, give the dealer a chance to match or beat the rate you are getting. They may have a lower one, especially if you have good credit.