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They make that extra X% on the loan. For a 30k car at 3% that's nearly 1k. Also, the loan could be worth more due to potential late fees, etc

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The first part isn't really helpful to me though- if the APR is 3% I'll just factor that into the price up front and then any "deal" they give me will be (theoretically) the same as or worse than paying up front. Unless I take the loan deal and then immediately pay it off, I guess

The second part might make sense if they're "betting" on getting late fees from me while I know there won't be any

There's nothing stopping you from buying it with financing, and then immediately paying it off before you incur too many interest charges. My parents do that with every car purchase. It makes the deal making process and all negotiations way smoother, while ensuring they don't incur any unwanted debt.

The last time I bought a new car with a loan, which was in 1993, the interest was pre-computed. I tried to pay it off early, but I wouldn't save any money on interest. I don't think they do that anymore, but read the fine print.

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