A car dealership makes most of their money off of the financing.

> I asked for their cash price and they wouldn't give me one

When I bought a car from a dealer, the dealer told me that what I wanted was impossible. So I walked out and got in my car, and started to back out. The salesman came running out and agreed to my terms.

The trick to making a good deal is a willingness to walk away.

P.S. My accounting teacher used to work at a used car lot. He explained to me that poor people tended to screw themselves by not understanding how financing works. He'd try to explain it to them, and they'd accuse him of trying to screw them, and they'd go for the more expensive option.

I tell this story to people who say that learning math in school is irrelevant.

I also remember a Frontline episode years ago on 401k plans. One company had an identical plan for all employees. The reporters discovered that the higher paid employees had better returns on the 401k plans. Why was it that the lower paid ones did poorly with them? It was they did not understand how to manage investments.

Up in my neck of the woods, it depends.

I paid cash for the last two used cars I bought. As used cars go they weren't particularly expensive and it wasn't a big deal. Both purchases came from dealerships that also sold and serviced things like brand new Hondas or Chevrolets.

For one of those cars, the paperwork was completely finished and I drove off in that new-to-me car without me even giving them a dime. (I did promise in writing that they'd have a check in a few days, and I did make good on that promise.)

There's also used car lots that work with real financing companies. They broker the financing deal and get paid for it. That works, too. (I've financed cars at these places, too; this also went smoothly.)

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But then, too: There are buy-here, pay-here used car lots. These are traps for the poor, and they love their particular financing game.

At these places: The loans are designed to be very upside down and they therefore hold all of the cards. They'll sell a used car for years of weekly payments of $120, and if/when the payments stop then they just turn the car off remotely and have someone go pick it up.

After that, it's cleaned up and sold to the next guy for $120 a week.

It's a very profitable way to conduct business and nobody of any substantial means and sane mind would ever buy anything there at all.

But they don't check credit, and they don't report credit. So as ugly and expensive as it is, for some folks that's the only way they can get the car they need to try to survive in the society that they were born into.

Even worse: they want people to fail to pay it off, so they get half the debt amount and then get the car back to do it again.

In the US, a lot of car dealerships make a good portion of the profits from a car sale from the loan. E.g. the lender gives the dealer a kickback on the loan and that is a good portion of the total profit. It's somewhat analogous to how US airlines make their profits from credit card deals and selling miles.

There are two kinds of lots. 'normal' lots will sell a car, and the financing comes from a finance company. could be a bank, could be a credit union, could be a business that provides money to car purchasers. the normal lot has markup on the price, and also gets a kickback from the finance company. the car buyer does not pay, the finance company has a problem.

'buy here, pay here' lots sell a car, and do the financing. They buy cars at auction, fix them if they have to, then sell them. The down payment money usually covers the auction cost of the car. Then every 2 weeks, the buyers drops by with a payment. The buyer stops paying, the car is repossessed. And then it is sold again. The dealer wins in both directions; the buyer pays a lot of money in finance charges, and if it is repossessed then you don't have to buy new inventory at the auction.

Poor people with bad credit way over pay for cars both ways. One a little worse than the other.