A car enthusiast posted a video claiming that paying for a vehicle in cash does not help to negotiate with dealerships, prompting many viewers to disagree. 

On Dec. 23, a TikTok user (@roadtripra) argued in a video that many prospective car owners are misinformed. 

Does A Cash Offer Lower The Price Of The Car?

According to this TikToker, the short and simple answer is no.

“When you go to a car dealership or car dealer, and you offer them cash as if it’s some incentive for them to sell you the car cheaper, you’re wrong,” he begins.

He argued that the financing process on the car dealerships’ end is not impacted by cash sales. 

“Just because you take cash to the car dealer doesn’t mean there’s a benefit for them because you’re buying the car cash right now,” he shares. “Because either way, even if you buy it on credit, the bank is still gonna give them cash for the car.”

He emphasizes that it doesn’t matter for them since they’ll get the cash either way.

“So it’s not like they need to give you a discount because you’re paying for it all at once,” he adds.

He explains that this is partially because the dealership never owned the car in the first place. 

“They don’t own the car anyway. After you buy the car, they have to pay for the car that you just purchased,” he says.

However, many comments disagreed with his analysis. 

“Nah brother. I ALWAYS negotiate the best possible price, pinning them against every dealer local and statewide,” wrote one comment. 

“I’ll finance with them. Then pay it off the next day just to take advantage of every rebate,” another added. 

Does Making A Cash Offer Provide A Discount? Why Or Why Not?

It is true that in the modern-day car sales landscape, making a cash offer does not automatically give you leverage for a lower price. This is largely because dealerships don’t benefit from cash the way many buyers assume. 

When a customer finances a car, the dealer is typically paid in full by the lender shortly after the sale. This means the dealer receives cash either way.

In fact, dealerships often make more money on financed deals through lender kickbacks, interest-rate markups, and manufacturer-backed financing incentives. This is why cash buyers can sometimes be less attractive. 

Dealers may actually be less motivated to discount a vehicle if they know upfront that a buyer is paying cash, since financing is a major profit center for them. Edmunds notes that dealer-arranged financing can generate thousands in additional revenue per deal. So this reduces any incentive to reward cash buyers with a discount. 

Did Cash Offers Ever Serve As An Incentive?

While paying in cash at dealerships often led to discounts in the past, this was never a universal rule by any means. Decades ago, dealer financing kickbacks and manufacturer incentives were less significant to a dealership’s bottom line.

This meant that dealers sometimes offered small discounts to cash buyers simply because a cash sale reduced paperwork, eliminated the risk of loan denials, and guaranteed immediate payment. That could marginally improve a dealer’s cash flow and reduce the administrative burden of financing. Today, that dynamic has almost completely flipped.

So while paying cash used to occasionally be a bargaining tool in limited circumstances, it’s no longer a reliable incentive in most car-buying situations because dealership profit structures have shifted toward financing incentives and backend revenue streams.

Motor Biscuit reached out to @roadtripra for comment via TikTok direct message.

@roadtripra When you make a cash offer for a car. #usedcar #cardealer #carsales ♬ original sound – Roadtrip Ra