Why CASH is NOT KING at Car Dealers - Kevin Hunter The Homework Guy
If you've tried to buy a car lately and you've seen different car prices if you want to pay cash for a car, you know that CASH is not KING at car dealers anymore. Kevin Hunter The Homework Guy breaks down how to pay cash at a car dealership in 2025.
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Kevin Hunter shares insider knowledge on why cash is no longer king at the **car dealership** and how this affects your buying power. Learn about potential **car dealer scams** and how to navigate **car negotiation** to protect your **consumer rights**. Get essential **car buying tips** from an industry expert!
VISIT OUR WEBSITE: https://thehomeworkguy.com
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Facebook: https://www.facebook.com/thehomeworkguy/
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HASSLE FREE CAR BUYING SERVICE Available now! Click here to get started: https://thehomeworkguy.com/thg-team-car-buying-service/
💰 PART 1: WHEN CASH WAS KING
There was a time — and I lived through it — when dealers rolled out the red carpet for cash buyers. No financing paperwork, no lender delays, no rejections. If you brought cash, you were a dealer’s dream. You walked in, made a deal, signed a few documents, and drove off the lot. It was fast, it was easy, and it was the most pleasant way a person could ever buy a car.
This was especially true before the mid-2000s, when dealers made most of their profits on the car itself — meaning… on the sale price of the car. They focused on volume and inventory turnover. A quick, clean cash sale meant a happy customer and money in the bank. No lender back-and-forth business, no chargebacks, no credit risk. But then, slowly, things started to shift.
PART 2: ENTER THE DEALER'S NEW PROFIT MODEL
Today, the car business isn’t built around the car. It’s built around everything BUT the car — I’m talking about Financing, so called extended warranties, add-ons, aftermarket products, insurance packages, and more. And guess what? Cash buyers just skip almost ALL of that.
Let me break it down for you:
✅ When you finance through the dealer, they make what's called a finance reserve — a cut of your interest rate. That’s often worth hundreds or even thousands of dollars on a typical car deal..
✅ When you lease, they make money on both the money factor markup and the lease-end fees.
✅ When you buy extended warranties, prepaid maintenance, or paint protection, that’s all profit — and dealers aggressively sell those to people who are financing because it’s easier to bury these expensive items in the monthly payments.
But when you pay cash? It’s simple. You sign, you leave. They can’t hide anything on you. They can’t squeeze add-ons into a monthly payment or steer you into marked-up financing. So dealers see cash buyers as a threat to their backend profit machine. And that machine has become the heart of their business.