Michael Mallinger

Budget-minded Automotive Enthusiast (yeah, we've all heard that before.)

The Cash Buyer’s Philosophical Dilemma – What Do You Think?

In the course of watching YAA’s YouTube videos and participating in their YouTube livestreams, I’ve taken a ton of notes on just about every aspect of negotiating a car deal. Zach, Ray, Kimberly, and Yoni have covered just about all of the questions that I’ve been able to come up with.

However, there’s still one big one that’s been gnawing at me for a long time.

It has to do with being a cash buyer. Whenever the question of being a cash buyer comes up, the solution always seems to be “be a successful cash buyer by not being a cash buyer.” By this, I mean:

1.  Finance the car.
2.  Make sure the loan doesn’t have a pre-payoff penalty.
3.  Wait for all of the paperwork to go through, and then
4.  Pay off the loan as soon as you get the chance.

If you try to be a cash buyer without doing this, you take away so much of the dealership’s margin that they’ll likely no longer be willing to give you that outstanding OTD price that you’ve taken so much time and effort to negotiate.

I understand that this is what a lot of cash buyers do, and they are able to do it successfully. However, this is also where I start to question things.

YAA’s reason for existence is to empower the consumer. In my mind, the most important sentence in Zach’s manifesto is:

“Businesses that are built on the premise of information asymmetry and inequality don’t deserve to exist in the 21st century.”

However, couldn’t you also turn this statement around to say:

“Consumers shouldn’t take advantage of information asymmetry to pull one over on a business, even one as frustrating to consumers as a car dealership.”

After all, given what I know now, any dealership is really going to have to treat me with openness and transparency for me to buy from them. Doesn't this mean that I have to answer in kind? How can I then turn around and not tell them the truth about me being a cash buyer?

I realize that a lot of folks would likely respond to me with something like this:  “Mike, this is just the way the game is played. Dealerships make more money off of some customers than others. They know this, and they accept it. When you finance and then pay off the loan, yes, they lose some profits. But those losses are offset by the significant profits they get from those customers who flop.  Don’t beat yourself up over this, because the dealerships certainly aren’t beating themselves up over it.”

But the trouble is that deep down on the inside, I myself would know what I did, and I just wouldn’t feel right about it.

What does the YAA community think about this? Does what I’m saying make sense? Or am I completely off base here?