Yes, they want your money, but car dealers would really prefer that you finance your next vehicle. Dealers get a cut when they help you arrange a lease or a loan. Cash transactions give them less room to sell you extras, such as extended warranties or rust proofing. In some cases, those extras add up to 70 percent of the profits a showroom makes. And as car sales sag, these things matter more than ever. Yet more and more consumers are paying with cash--some 11.7 percent for the first half of this year, compared to 8 percent for the past several years. One reason is the wide selection of small economy cars, which are often purchased as a second vehicle. Many consumers already have loans on the first. Also, many cars are bought through the rewards of investment profits or by tapping home equity.
Source: New York Times
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