When you walk into a dealership, one of the first things you’ll be asked is how you intend to pay for your new car.

When the dealer starts yapping, just explain that you intend to pay in cash. Now saying you’ll be paying in cash doesn’t mean you’re going to open up a briefcase with bricks of money inside. It just means that you’re not interested in the dealer or manufacturer financing.

In some cases (if you have perfect credit, if the car is about to be replaced by a newer model) dealer-sponsored financing might be a better deal, but most of the time it’s not. You can usually find better deals on car loans at credit unions and banks.

Telling the dealer that you’re not interested in their financing accomplishes two things:

• It takes away an opportunity for the dealer to pad the deal with extra profit (dealers are, as you may suspect, a wily bunch, and they have ways to slip in various fees and charges into the financing arrangement)

• It allows you to focus on the actual and total purchase price of the car , which is far more important and useful than focusing on the monthly payment figure.

Once you get the financing talk off the table, you can get down and dirty with your dealer and negotiate the purchase price of the car. Here are a few factors to consider when thinking about auto financing:

1.) Resist the temptation to lease
Leasing is a fancy way to say “renting.” When you lease a car, you have to give it back at the end of the lease, or buy it from the dealer at a predetermined price. When you take a loan out to buy a car, you pay it off and then the car is yours free and clear. The only payments you’ll have to make after that are for gas, repairs and insurance.

Lots of people lease. Smart, respectable people lease. It’s not a terrible thing to do, but it’s not the best way to buy a car. Why? You’ll always be making payments. Lease a car for three years and, when three years is up, you’re looking for a new lease (or shelling out thousands—or tens of thousands—to purchase the car you’ve been driving). Read more about car leasing here.

2.) Consider “Factory Certified Pre-Owned” Cars
“Certified pre-owned” is French for “used.” But it does come with some extra assurances about the car’s condition. Going pre-owned can be a really smart move—most cars drop 18% in value in their first year. A certified pre-owned car is one that has been inspected and fixed before it goes out on the used market, and comes with a manufacturer-backed warranty, like new cars do.

Want to Know More?

• How to Get the Best Deal
• Sizing Up Your Future Car Loan
• Grilling Guide: Questions to Ask When Financing a Car