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| Saturday, July 28, 2007 |
| More paying for cars with cash |
 The New York Times article: On Paying for Cars With Cash reports more people are skipping the loan and paying for the new car with cash.
But, to some dealers’ chagrin, cash deals are up in 2007. Some 11.7 percent of buyers paid cash for cars in the first half of this year, versus about 8 percent over the last few years, according to a survey by CNW Marketing Research, which studies car buying habits.
[...]
Because many consumers purchase small vehicles as second and third cars, and have a car loan for their primary vehicle, a number are choosing instead to pay cash rather than take on another loan, Mr. Spinella said. That is particularly true for women buyers, who account for about 42 percent of cash-paying customers.
Cash-paying buyers, who tend to be wealthier than typical consumers, are often reaping investment profits. This year, 34.8 percent paid for their cars by selling stock, the most common source of cash, compared with 31.8 percent who took money out of their savings, Mr. Spinella’s data showed.
Indeed, at brands like Mercedes-Benz, Volvo, Audi and BMW, as many as one-third of transactions are cash sales. My car is seven years old and was purchased with a car loan. In fact every car I have ever owned has been a finance purchase. My hope is that when I eventually replace my current car (I paid off the loan years ago - early I might add) I will be able to pay with cash. |
| posted by Boston Gal @ 10:37 PM *
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| 9 Comments: |
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I purchased my car with cash and it was entirely to save money. I did an end of the month fax attack to 12 dealers for the specific car I had in mind looking for the best price and naming the features/options I wanted (or more importantly all the one I didn't). I went with the one that would give me the best deal, under invoice even, and didn't want some "hidden" charges in the financing. Cash is best.
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Only once have I had a car loan, cash is the way to go. Last year, I bought a Volvo I saw on Craigslist and I absolutely love it!!!
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"(...)a number are choosing instead to pay cash rather than take on another loan, Mr. Spinella said. That is particularly true for women buyers, who account for about 42 percent of cash-paying customers."
The stats are completely opposite: it means that 58% of cash-buying customers are men. So it's especially true for men, not women.
De factor, a minority of cash-paying customers are women.
Unless there are some people out there who are neither men or women and buying cars....
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I would love to buy my next car with cash and since I don't drive much anymore nor need a new car there is a possibility here. The financing even though it might be a small % adds up over the 3,4, or 5 years you have the loan; why not save up if you can and save yourself the money.
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LOL @ the 42/58% comment. I noticed that too when I was reading and was wondering if men made up less than 42% of all-cash car buyers, who made up the other ~20%? Transgenders I guess ...
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While the 58/42 is poorly worded, it might be that women are more likely than men to pay cash over credit, IF, out of all purchases, men make more than 58% of them. Then the comparison is not between women and men making cash purchases, but between women making cash and women making credit purchases. And between men making cash and men making credit purchases.
And keep in mind that in many marriages, negotiating for a car, no matter who will drive it, is done by the husband.
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I had to reread the sentence with the 42% stat a couple times because it's definitely unclear. But what I think they're trying to say is that it's mostly women who are paying for new cars with cash while they are still paying off loans on another car. The men who pay with cash mostly do not have loans on other cars to pay off. The 42% stat doesn't really add anything to the sentence, My guess is the journalist probably had a note from the editor -- "give me some statistics!" and that was the only stat the journalist could find.
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The quote says that women, who make up 42% of cash buyers, are particularly likely to pay cash on a small second or third vehicle to avoid another loan (in addition to the one they already have on their primary vehicle).
It never says that women in particular are more likely to pay cash.
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Hm... can't tell if my comments are being posted or not... please delete if I am double posting.
The 58/42 is definitely poorly worded as someone else said. But I think the meaning is this -- It's more true among women than among men that cash purchasers are paying in cash for their new cars because they already have debt on another car and don't want to take on another loan. The 42% stat is misplaced and doesn't add anything to the sentence because it only tells us what percentage of the cash-payers are women, not what percentage of people who purchased for that reason are women, or what percentage of the total population paid with cash because they didn't want to take on an additional loan.
For example, if there were 100 people last year who payed for cars with cash, 42 of them would be women and 58 would be men. But there may have been 98 different reasons people chose to pay with cash. Then, the most common reason would be the reason that only 3 people answered -- that they didn't want to take on an additional loan -- two responders being women and one a man. The 42% stat should have been put someplace else in the article.
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I purchased my car with cash and it was entirely to save money. I did an end of the month fax attack to 12 dealers for the specific car I had in mind looking for the best price and naming the features/options I wanted (or more importantly all the one I didn't). I went with the one that would give me the best deal, under invoice even, and didn't want some "hidden" charges in the financing. Cash is best.