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I have paid cash (actually cashier's checks from my bank) for every new car that I have ever bought, and that goes back as far as 1971.
My most recent car purchase--with good old American cash--was in September, 2010, and nobody at the agency blinked an eye when I produced a cashier's check for ~$30k. If this was reported to the Federal Government, I have no idea (nor do I care), and no G-men have paid a visit to my house.
Over the years, I have saved a small fortune on finance charges--much to the dismay of the car salesmen.
You can pay anyway you want, but if you walk into a dealership and buy a new $25k car with a suitcase of cash they need to fill out forms that reports the transaction to the government. This is to check the possible source of the money and is part of the anti-terrorism regulations. If you walk in with a bank check this is not needed as the bank will have already done due diligence on the source of the funds.
So, yes you can pay cash but not without having to report the transaction and list the source of the funds. If you pay via bank check, you can avoid that.
I always pay cash, hate the thought of paying interest, any interest. I put my money in the stock market, with stocks paying dividends as high as 15% (yes, there IS risk) and when we do buy a new car, we pay cash, but about half of it is "other people's money" not mine.
My advice to all is to do your best to get ahead of the game if you can, as paying interest only makes your poor/poorer. We got ahead of the game about 30 years ago (I'm 63 now); instead of making car payments why not pay yourself. It takes discipline; you cannot go out and finance cars, boats, RVs and the like and get ahead of the game. RENT the boat or RV for a day or week and then walk away from it with your credit rating intact and your net worth still strong.
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I am blessed that a very good friend owns a Ford dealership. I have been buying Fords since the early eighties from him, and my transaction is always painless. My friends brother is the sales manager and I deal directly with him. He knows not to even mention financing (I PAY CASH), extended warranty, window etching, paint sealant, polyglycoat, fabric protectant and whatever else is available. The only time we ever financed is when Ford has an additional rebate for those who finance. When they do, we finance the least amount possible that will still qualify us for the rebate. When I get our first finance statement, I pay the loan in full. The last time we did that, we got an additional $500.00 discount from Ford, and I believe we paid about $45.00 in interest or $455.00 net to me.
I always pay cash, hate the thought of paying interest, any interest. I put my money in the stock market, with stocks paying dividends as high as 15% (yes, there IS risk) and when we do buy a new car, we pay cash, but about half of it is "other people's money" not mine.
My advice to all is to do your best to get ahead of the game if you can, as paying interest only makes your poor/poorer. We got ahead of the game about 30 years ago (I'm 63 now); instead of making car payments why not pay yourself. It takes discipline; you cannot go out and finance cars, boats, RVs and the like and get ahead of the game. RENT the boat or RV for a day or week and then walk away from it with your credit rating intact and your net worth still strong.
Mike--What you wrote is my exact practice and my philosophy.
We are even the same age. Hmmm...separated at birth?
In addition to wise investing and paying cash for my cars, I maintain the cars flawlessly, wash and wax them regularly, and keep them garaged. I also tend to park at the far corners of shopping mall parking lots and then walk a long distance to the stores, just to prevent careless and inconsiderate folks from putting dents and dings in my car's flanks. Both the car and my health benefit from this practice.
And, because I take such good care of my cars, I tend to keep them for 8-10 years, and get rid of them only because I have gotten bored with them and/or because I want new safety and convenience features When I trade them in, I get a very good price for them because they are in such good mechanical condition and because they look so good.
My parents have always paid cash for their vehicles and I was taught that if I didn't have the money to pay for it outright, I didn't need it. So I still pay by a personal check whenever I buy a car (of course I don't tell the dealer this).
I don't like the idea of having payments at all, it scares the hell out of me. If something ever happened with my job (knock on wood), I would NOT want to have to worry about making car payments on top of other bills I have. Trade up every 3 years, take a little depreciation hit, but have a nice new car under warranty.
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