I feel like this is an exceptionally dumb question but, does paying in “cash” limited to paying with paper currency? Or would paying for something, say a vehicle, in full and with a debit card also qualify? so, basically, does not paying with credit or in payments qualify?
Also, paying in full with a debit card is a preferred method for a car dealership, right? Would that be something that one could offer in negotiation in order to bring the price down a bit?
Thanks for anyone who answers this. Much appreciated and have a good day.
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It’s a colloquial phrase and so it’ll mean different things in different contexts. If the taco truck says “cash only”, they mean banknotes and coins, and not electronic payment like debit or credit. But for big ticket items like cars or houses, “cash” doesn’t generally mean physical coins and paper, it just means the currency is all transferred up front, and isn’t paid using credit, financing installments, etc. No debts were incurred in the purchase. And yes, some dealers may offer you a lower price when you pay this way,.
In this context, it would be paying in full at the time of purchase. Not financing. Physical cash, debit card, checks, bank transfers would all count.
I don’t know if they’d take debit card, that hadn’t actually occurred to me. I just bought a car with cash recently and used a paper check. The other big option brought up was an ACH transfer.
Do not bring this up until you’ve agreed on a price already, it won’t help you and will probably hurt you. You won’t get a discount and in fact may be charged more. Dealerships make more money when you finance through them. You let slip that your paying cash, and that extra money is gone.
This is context dependent.
When you’re just buying a hot dog at a corner grill they mean literally paying with physical currency. This avoids the transaction fees associated with credit/debit cards.
When you’re making a large purchase, a “cash buyer” doesn’t actually have $70,000 in cash in a briefcase (usually) but rather have arranged some debit or transfer rather than needing to finance the purchase on credit.
It depends on the context… if it’s a restaurant or market stall, “cash only” would mean physical currency.
When it comes to larger purchases like a car or house, “paying cash” means having all the money available up front vs. needing to apply for a loan to pay for the purchase. But it doesn’t mean walking into a car dealership with $50k in 100 dollar bills. It just means you’re going to write a check, wire the money from your bank or whatever vs. needing to get a car loan.
For small transactions, including most everyday purchases, paying in cash specifically means using physical money.
For very large purchases, like cars and houses, you sometimes hear about “paying in cash” meaning that you paid for it without using a loan. This doesn’t necessarily mean you used actual physical money: debit cards, bank drafts, or even checks can qualify. But this sense of the term is generally only used for very large purchases, the kind that most people would have to take out loans to buy.
> Would that be something that one could offer in negotiation in order to bring the price down a bit?
Actually, no. Most dealers get a cut of the financing, and you paying cash cuts them out of that, especially if you’re buying a new car (which have very thin profit margins).
For why ‘paying in cash’ has advantage for large items, if you are buying a house and have the total amount in cash, it means you don’t have to secure a mortgage. It can happen such that a buyer puts in an offer, then the bank rejects it. So for the seller if they got two identical offers, the cash offer has a higher chance of going through.
You are correct in saying that if you pay with the cash that is on your debit card you are still paying in cash.
There are only two options. Paying in cash or financing with credit. You can either pay $5,000 up front, or pay in 10 installments of $550, interest included.
Paying with a credit card would be ideal if your card limit is high enough and, also very important, you can pay off the card debt right away from your account. Purchasing this way will give you certain safeguards offered by your card and provide you with a very generous amount of card use bonus points.
Check and paper cash does not cost the vendor money to process. Debit and credit cost the vendor for each transaction.
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