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Buying a car in cash

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Prospect
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Posted: #1
Hey guys, I rarely post but just looking for some advice on  something. Has anyone ever bought a car in cash? I'm looking to buy something in the 15k-25k range and I know the IRS requires the dealership to report any transactions over 10k.

Let's say I've had a good year betting with a local, have saved much of my winnings and am in position to do this. I know I could just as easily finance the car, make payments with my winnings, ect ect, but I'd love to just buy lump sum and not have to worry about the car payment.

Obviously the money hasn't been made from a job and I don't want to get hassled by the IRS.

Should I make a series of cash deposits in the bank until my funds are built up to the 15k-25k level and then make the purchase so it looks legit or will my bank be asking questions as to how I have come into so much cash to build the account to that level?

As you can see, with no experience in this, I'm fairly ignorant with regard to how to proceed. If anyone out there has any experience with this I would appreciate any insight I could get. Thanks in advance guys.


 
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Posted: #2
I bought my daughter a 2010 Jetta in cash 2 years ago for graduation plus was tired of her borrowing my car all the time.

My income is all documented though so don't have any experience with cash transactions "off the books".

I didn't know car dealerships have to report 10k+ cash transactions similar to banks.
 
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Posted: #3
Thanks for the response, I know there are some dealerships that don't report it because it's apparently a huge hassle for them but legally they are required to.
 
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Posted: #4
I'm not how helpful this is - but I do know if you buy in cash, you can get a much better deal than if you were to finance. I was able to save $2500 just because I bought a car in cash. So after you figure out the logistics of laundering your winnings (that I can't help you on)...definitely buy in cash, it will save you money.
 
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Posted: #5
Yes any cash transaction of 10K+ gets reported the dealership must do this because they do get audited.

 What you can do is put a down payment of $9999 and finance the rest. When you get your payment book payoff the car in a month or two. You will pay minimal interest because it is a simple interest loan. 

Just tell the dealership this is your plan. The dealership should not mark up the rate. If they do mark up the rate and you pay it off that early they get charged back. Just something they would like to avoid and helps if you take a bit longer to pay off.
 
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Posted: #6
Thanks Kaufee, that is what I had heard and is even more reason to do this. One would think I could make a bunch of $1,000-$2,000 deposits over several months and be ok but not sure what bank policy is on that or if I'd run into anyone questioning me.
 
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Posted: #7
Quote Originally Posted by tep:

Yes any cash transaction of 10K+ gets reported the dealership must do this because they do get audited.

 What you can do is put a down payment of $9999 and finance the rest. When you get your payment book payoff the car in a month or two. You will pay minimal interest because it is a simple interest loan. 

Just tell the dealership this is your plan. The dealership should not mark up the rate. If they do mark up the rate and you pay it off that early they get charged back. Just something they would like to avoid and helps if you take a bit longer to pay off.


Thanks very much.
 
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Posted: #8
Paying the car off in a few months is your plan not avoiding form 8300.


Or just write a  personal check. That avoids the reporting as well. It is not considered cash.
 
Prospect
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Posted: #9
Can I deposit enough cash in the bank to cover it and not have my bank asking questions as to where that came from?
 
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Posted: #10
Banks are the same 10k+ gets reported. Just make the deposits smaller. 
 
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Posted: #11
Sweet, so like I wondered above, a series of 2K deposits over a few months won't get reported.
 
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Posted: #12
Always wondered why paying in cash entitles people to discounts.  I'd think the dealers got a kickback from the financing.  Why would they prefer cash?
 
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Posted: #13
Do you have a beater for possible trade??? I paid 13,500 for a clk 430 benz (huge mistake) back when I had a life and money.... Paid 11k cash and he gave me 2500 trade for my car.... But on the books he had it read 9500 cash+ 4000 trade.... Most of these guys will make it out out any way you ask them to.... Don't have to worry about them losing sleep....


BOL and congrats on new ride 


What ya thinking about buying???
 
Captain
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Posted: #14
PUT 9K DOWN AND FINANCE THE REST FOR 12 MONTHS WITH A SIMPLE INTEREST LOAN. THEN MAKE TWO ADDITIONAL PAYMENTS UNDER 10K EACH OVER THE NEXT TWO MONTHS FOR THE BALANCE. YOU WILL PAY MINIMUM INTEREST BUT THAT WILL KEEP THE IRS OUT OF YOUR BUSINESS. HOPE THAT HELPS.
 
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Posted: #15
Well played, Tep
 
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Posted: #16
Any insight on how much dealerships will negotiate down on used cars.  Im looking at Honda Accords in the 15k range.  What can I get them down to.  Never bought from a dealer before
 
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Posted: #17
wvu06, sorry but you are getting bad advise. It is not the 10k cash transaction threshold that is the problem it is the IRS when an audit comes around on your personal finances how do you explain this money. I dont' think you are saving yourself any hassles by not having it reported. 

As much as you want to you aren't going to impress the car dealership by walking in with some crisp $100 bills. As much as you get a hardon and feel good about it they don't care it is just another transaction. Actually the cash is more of a hassle for them.

Like some of the other posters have said make a large down payment on the car then pay it off over the course of the year in less than 10k payments. The interest you are paying on the loan isn't going to hit you very hard while at the same time you will be building up your credit. 

If your income was legally reported then just write a check no big deal. 




 
 
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Posted: #18
Quote Originally Posted by tep:

Paying the car off in a few months is your plan not avoiding form 8300.


Or just write a  personal check. That avoids the reporting as well. It is not considered cash.


Cash or check.  CTR, Currency Transaction Report--they have to file one with the IRS.  Doesn't mean you would be audited, but the IRS would give it a look.    Anything over $10,000.   It is up to the dealerships discretion.  You COULD pay $9500 on Friday, and come back Monday and pay $5500--assuming a purchase of $15000, and the dealership would NOT be required to file this report.  Bol.
 
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Posted: #19
Cash is no different than a check.  Have to file if OVER 10,000.
 
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Posted: #20

yes, any business dealing in a cash transaction has to report anything over $10k to the IRS. and yes the IRS can come back and question you as to how you came about the money. as long as you can show that you have reported the cash as income and paid taxes on it, you will stay out of trouble.

but let's think about the cash transaction in the first place. although you would be without a monthly car pymt, it may not be smart to invest that much money because in doing so, you will be losing the earning potential of the cash. you may be better off putting down a nice down pymt so that the monthly pymts are low. run the numbers and see what is best.

 
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Posted: #21
Quote Originally Posted by bandit1010:



Cash or check.  CTR, Currency Transaction Report--they have to file one with the IRS.  Doesn't mean you would be audited, but the IRS would give it a look.    Anything over $10,000.   It is up to the dealerships discretion.  You COULD pay $9500 on Friday, and come back Monday and pay $5500--assuming a purchase of $15000, and the dealership would NOT be required to file this report.  Bol.


The dealership has to report the entire transaction. If the purchase is 15K, that's what they will report.
 
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Posted: #22
Thanks a lot for the responses guys.
 
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Posted: #23
Being a Dealer, my advice would be to put $9000 down with a reputable dealer with whatever payment structure and pay $ 2000-3000/mo til it's paid off. Everthing over the scheduled payment is interest free.
 
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Posted: #24
Quote Originally Posted by ApacheM:

Being a Dealer, my advice would be to put $9000 down with a reputable dealer with whatever payment structure and pay $ 2000-3000/mo til it's paid off. Everthing over the scheduled payment is interest free.


Thank you very much sir, I appreciate the response.
 
 
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Posted: #25

This one appears simple, for a 24K car, open 2 checking accounts at 2 different banks with $8000 each, pay the the dealership $8000 cash plus the 2 checks for $8000 from different banks, NO ONE ASKS ANY QUESTIONS.  I am a CPA, and this has been done before - screw the IRS and invading your privacy, and my way won't cost you a penny more than the purchase price.

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