Even with a decent finance rate of say 2.99%?
Doesn’t seem to be any disadvantages, but curious of opinions
When you say cash, are we talking about hypothetical greenbacks from under a mattress, or paying outright in some cash equivalent (e.g. wire or cashier’s check)?
Trying to understand if you question is transacting in cash or purchasing and owning a car outright- on the latter you already mentioned the lost opportunity cost of that money, that and owning what is usually a depreciating asset are the only things that come to mind. Plenty of upsides.
Paying outright
Sure
Often there are rebates specific to financing / leasing that you may not get if you pay cash or bring outside financing
So it would be wise to weigh the cost associated w all different ways and potentially finance / lease then buy it out
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Often, even if you want to pay cash, youre better taking a dealer financing option then paying it off immediately. Dont want to cut off a dealer income stream that they could otherwise leverage to give you a bigger discount.
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Can you elaborate on why one would be better off instead of just paying outright from the jump?
Better discount on financing.
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Dealers sometimes get some sort of kickback from financing. Cut off that kick back and theyre going to make up for it in a lower discount.
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If you pay outright on a Lease (other than 1 pay) you just opened yourself on a ton of loss of everything if car is in an accident
If you pay cash for a Purchase, the dealer gets no kickbacks and will possibly raise the price.
This is going to vary from bank to bank and dealer to dealer but as a data point: I was offered an additional $225 discount for financing ~$42k vs paying in full.