My Experience Buying a Used Car with Cash

In January, my husband and I knew we needed to get a new car. Jim had driven his 1990 Toyota Celica into the ground. With 212,000 miles on it, the Celica had served us well, but the repairs were becoming too expensive. We had received a small inheritance when my father-in-law passed away, so we decided to pay cash for a new-to-us car. Don’t worry. We didn’t use the entire inheritance on the car. We used a huge chunk to pay off debt, and we kept an additional amount for an emergency fund…the same emergency fund that is getting is through the difficult financial times we face today. But on to the story.

Our Car Buying Story

1. Figuring Out What We Needed

We sat down to discuss the kind of car we needed. We narrowed it down to buying an economy car or a minivan. The big advantage to an economy car, of course, would be improved gas mileage. However, we had issues with carseats, and the Celica had not worked well for us in that sense. The advantage of a minivan was mainly the ability to carpool. With two kids in soccer, that was pretty important to us.

In the end, we decided to go with a minivan. At the time Jim had a secure (we thought) job where he didn’t need to drive much, so gas mileage was not as important as it would have been if he were driving a lot on a sales job. My kids are really involved in soccer and church activities, and it’s always nice to be able to haul their friends around.

2. Doing the Research

The next step was researching different makes and models of minivans. I polled my minivan-driving friends about their cars. My husband talked to people he knew. In the end, we narrowed it down to the Kia Sedona, the Honda Odyssey, and the Toyota Sienna. The Odyssey and the Sienna were obvious choices. Everyone raves about them. They’re also quite expensive. However, we found a lot of people who were happy with their Sedonas, too, so we added the cheaper Sedona to our list.

We then bought a one month subscription to Consumer Reports. The online edition provides a lot of information about used cars. It cost us about $5, and we were able to access crash-test reports, reports on how the used cars held up over the years, and strong points and weak points about each used car we were considering. It was a$5 that was very well spent.

We also bought a three month subscription to Carfax. We were considering buying through a private party, and with Carfax, you can see the owner history of the car you are considering. It’s important to know if the car has a history of an accident, or if it’s been listed as totaled. Also, cars with a single owner tend to be in better shape than cars that have had several owners, so you can use that as a bargaining chip. I think the subscription cost us about $15, and it was also well worth it.

We looked up the Kelly Bluebook price for the vehicles we were considering. We needed a ballpark figure for negotiating a fair price, and Kelly Bluebook is a great free tool for coming up with a figure. We then set a budget. We came up with a dollar figure that we thought would get us a decent minivan, and we determined that we would not spend more than that.

3. Shopping

It was time to start shopping. We test drove a couple of Sedonas first. They drove OK, but we didn’t think they were very comfortable. The advantage of the Sedona is that we would be able to afford a van with lower mileage than the more expensive Honda or Toyota. The disadvantage is that we weren’t too impressed with the Consumer Reports data on the Kia.

A few days later, we found a Toyota Sienna in our price range. It was at a dealership that my husband had worked at a couple of years ago. We took the Sienna for a test drive, and immediately liked it much better than the Sedona’s we’d driven. On the test drive, my husband made sure to mention to the salesman that he’d worked at the car dealership before. That let the salesman know that my husband knew the bargaining techniques they’d use.

We also took our children along for the ride. We wanted to make sure that Sam’s booster seat worked well in the minivan, and that Liz was safe and comfortable in the seats. Having children along can be an advantage or a disadvantage when you’re bargaining. If you’re going to be distracted by your children, it’s better to take a test drive with them, and then leave them at home for the bargaining. On the other hand, children can annoy the salespeople into trying to get you to sign a deal quicker, which can work to your advantage. :) We kept our kids along for the bargaining process.

4. Negotiating

We decided we liked the van enough to try to work out a deal. We had seen the van advertised in the paper, so we had already looked up the Carfax Report and the Kelly Bluebook value on that particular van. It had higher than average mileage, so that worked in our favor. It also had more than one owner, so that was another bargaining chip in our favor.

We let the salesman know that we were buying with cash and that we were not at all interested in financing. The salesman gave us the rundown on the advantages of buying a Certified Used Vehicle. We listened, and then made an offer. It was not our highest dollar amount. The salesman talked to his manager, and came back and said they couldn’t go that low.

We talked a bit more, and we offered an amount between our first offer and our highest amount. Again, the salesman talked to his manager and said they couldn’t do it. We made our case, using the information we had gathered from Carfax and Kelly Bluebook and made our final offer. Again, the salesman came back and said he couldn’t make the deal. I said that we were ready to walk away, so he went to talk to his manager one more time.

Then he pulled a trick that is typical in sales. He told us that they had just gotten a Mazda MPV that we might be interested in. Of course, they hadn’t even had time to clean it up yet, but we could be the first to look at it. We had a look, and the van was a mess. Crackers on the floor, upholstery stains…it was filthy. This technique is used to make you overvalue the clean car you’ve already seen. We weren’t biting though.

We went back into the dealership and reiterated our final offer. By this point, the kids were getting restless. They had been playing in the play area, but they were ready to go by now. The salesman talked to his manager and said they couldn’t make the deal. I turned to my husband and said, “Let’s go.” The salesman got kind of panicky, and went back to talk to his manager again.

They came back with an option for us. We could either up our price by $500, or we could drop the Certified Used Warranty. We opted to drop the warranty and signed the deal.

Why did we drop the warranty? The certified used warranty was for three months, but the dealership had a two month warranty. $500 was not worth an additional 30 days of warranty coverage for us. The big advantage of the Certified Used Program is the inspection the car must go through before it can be sold as Certified Used, and the van had already passed that inspection. So we were already getting the biggest advantage of the program, even though we weren’t paying for it.

You do have to watch it with these programs, however. My brother bought a certified used vehicle and later found out there was rust damage on the bottom of the car. In retrospect, our one big mistake was not having our minivan looked at by an independent mechanic before we signed the deal. It worked out for us though, as we have had no problems so far. But I would highly advise anyone who is buying a car to get it checked out by your own mechanic before signing the deal.


In the end we walked away with the car we wanted for the price we wanted. We did several things right.

  • We did lots of research
  • We set a firm budget that we both agreed on
  • We were willing to walk away from the deal

And we did one thing wrong.

  • We didn’t get the car checked out by an independent mechanic

We’re happy with our purchase, and our Toyota Sienna has served us well for the past 10 months. The best thing about it? No car payments!

Do you buy new or used cars? Don’t have a car? What’s your experience with buying cars? This project is going on all week, so feel free to write a post, and I will add your link!


By , on Nov 13, 2007
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. Rick:

    I’ve been told time and again: NEVER DISCLOSE THAT YOU ARE PAYING CASH!!! However, I have an idea that would work:

    If your shopping for a car (and intend to pay straight cash (no financing), first and foremost, HAVE THE CAR CHECKED BY YOUR MECHANIC! That’s a given. Give the impression that you will finance the vehicle, then haggle, haggle, haggle!!! Once you’ve locked in your price — YOUR price, not the dealer’s — say “I changed my mind…at that price, I’m paying CASH!” lay out your money (be it cash or cashier’s check for your amount) on the table, and demand the keys & title. I don’t think the dealer can balk at that…after all, a deal is a deal!

  2. Jamey:

    I concur: Be ready to walk. I negotiated the price on a CPO Honda Fit Sport (<21k mi; manual). I had done tons of research on the price of this car, as well as gotten a range of trade-ins for my 2004 Mini. I kept mum on how I was going to pay–again, get the price first; let the dealer think they're going to make up some lost sales revenue on a financing deal. But when negotiations bogged down, I said one simple phrase to the salesman when we were $800 apart, and nothing more: "If this isn't a good deal for you, then DON'T take it. In fact, you'd be nuts if you did. But I did the research and we both know that my offer is fair–and I don't even know how much you paid for this car."

    Another good tactic is to know how long a car has been in the dealer's inventory. After 90 days, the clock is starting to tick. They pay for used cars with borrowed money, so every month a car sits on the lot is a month more the purchase money is tied up. And lastly, if you can wait till late summer to start looking, you can get a boost when the next year's models come out. My 2010 Fit suddenly became 3 model years old, instead of 2; also, a glut of pre-owned Fits came onto the market off-lease after the expiry of 36 month leases initiated in 2009.

    The key is to do your homework–know what the car is worth before you start talking price. Know what your trade-in is worth–and have it professionally cleaned inside and out before you bring it in. And be prepared to walk if the deal isn't going your way.

  3. Diana:

    The key is being willing to walk out. You cannot fall in love with the vehicle before you buy it.

    It also helps if you’ve been looking at a couple of other dealers–this is not the last good vehicle available to you.

  4. Erinn:

    Wow! I could use some of these techniques. My husband and I are very young. We have a 1 1/2 year old daughter, that’s it :), and we are 20 and 21. But, my husband’s job requires him to deliver parcels to people, and he requires his own vehicle for doing it. It’s an outstanding job, so we need two cars (1 for me and my errands/school and caring for baby, and 1 for him and his job). So we are looking for a new car with a budget of between 6-9 thousand dollars. We’ll be able to pay with cash. I was obviously worried because I thought that maybe we would end up with a car that needed work and we didn’t know about it at first, and here we are, just having paid quite a bit for it. My worries are at ease :) Hopefully, we can use some of the tactics that you have provided to make a wiser decision when we start actually going to buy here in about a month. Thanks for all your info!

  5. Briana:

    Great Article! And thanks for the tips, information, and advice overall. I’m 19 and Have been on my own for quite a while, and I’m tired of riding the bus down here. I’m ready for a car and plan to use these ideas as my basic to-do list!

  6. subharmonic:

    another helpful tip is use the website of companies that sell used cars. carmax comes to mind first but there are plenty others. the value is that it can give you a sense of value based on the market/area. Dealers also use the black book rather than the kelly blue book. and nada price guides.

  7. Great story. I’d be interesting in what other tricks cars salesmen use also, if you want to write a post about that. I definitely don’t think most cars salesmen are bad people, but I still would like to know their tricks.

    • Sweets:

      Here are a couple sales techniques:
      – pretend to have something in common with the customer. ex: They may say they have the same shoes or shirt that your wearing at home. Sometimes they’ll ask how much you paid then say they paid more. A more indirect approach is to try to guess what type of music you may like. I had a sales guy say to another sales guy, in front of my girlfriend and I, “Hey did you leave Maroon 5 CD in that mazda? then he turned to my GF and asked her if she liked that one song, etc.

      -When it comes time for the price haggle you may notice they sit you at a dirty table. Ours had a spilled soda on it. They do this on purpose so that you’ll be slightly uncomfortable and be quick to agree to the deal. Best thing you can do is look totally comfortable and aloof. They’ll eventually clean it up.

      -when the sales guy finally does sit across the table from you, you can throw him off by moving where you sit or by standing up and moving around occasionally. Try pulling your chair around to the side of the table, or next to his. Stand up, stretch and appear distracted. Don’t act in an expected manner. Trust me it can help.

  8. Eric:

    This was all great information. I wouldn’t have thought about bringing in my own independent mechanic to check the car. That’s a really smart thing to do.

  9. Smart. Healthy. Rich.:

    Overall it sounds like you did a great job researching your car and getting the best deal possible. One thing that I would recommend though is not telling the salesperson up front that you are going to be paying in cash. Many dealers will be more willing to flex on the purchase price if they think that you might be financing with them.

    Settle on a purchase price first, then tell them that you’ll be paying in cash (the same is true if you are planning on trading in your old car).

    – Brandon

  10. I can’t justify the expense of a brand new car. The minute you drive out of the yard you have already lost value.

    We have done well with used cars, mine is 11 years old and was an ex-demonstrator when we bought it, it has needed very little work over the years and done many thousands of kms.

    Our other car was a real bomb, dirty, shabby and we paid $2000 for it, it was a fantastic car! I used it for years just to run around town in and we sold it for $1500 after 6 years of daily use.

  11. Lynnae:

    @Louise – that’s awesome that you used a $2000 for so long and still managed to sell it for $1500!

    @Brandon – that’s good to know. I never would have thought about not mentioning that we were paying with cash until we decided on a price, but when I think about it, it does make sense.

  12. I like the negotiation techniques the dealerships use (showing the old car, etc.). Thanks for sharing that info. :)

    I agree w/ Brandon that not informing the dealer about your payment option or trade-in can be a good option and can get you a better deal sometimes.

    The last time I bought a car I did everything “wrong” according to the textbook, but I still came out with a good deal. First, I bought a brand new car, then I told them upfront I had my own financing and I was trading in a vehicle. I think I got a good deal though because of the way I handled the deal. I basically walked into the dealership very well informed and gave the dealer a fair offer that would allow them a profit, give me a good car, and give me fair value for my trade-in. The entire process only took a couple hours – because I told them that was all they had to make the deal or I would leave!

    I’ll have to write a blog post about it. :)

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