What is the difference between Cash Deal vs.One Pay
Cash Deal vs. One Pay
By definition, a “Cash Deal” should mean the customer is paying “All Cash.”
In practice, it means the customer is settling with the dealer using trade equity (with the associated good title /net of payoff to any lienholder) and the difference is “CASH” on delivery.
When a “Cash Deal” is completed, the dealer has everything the buyer is obligated to provide, and the buyer has everything the dealer is giving him.
A “One Pay” contemplates that the sales process requires “One Payment” more to complete the process.
The buyer will provide his trade (with good paperwork) and maybe a down payment (maybe not) but the dealer is waiting for the check from the buyers Bank or Credit Union.
“One Pay” deals have Lienholder information – “Cash Deals” have no lien holder.
One Pay deals require a different Finance Company being printed on the Title as lien holder. Although it could be a lienholder that the dealer uses regularly, chances are it’s the “Brotherhood of Electrical Workers Credit Union,” and the dealer will never title another vehicle to that lien holder. Hence, we need a One Pay Lienholder.
The difference in these two contracts is simple:
- If it’s a “Cash Deal” the system is looking for a down payment that balances the outstanding balance and there is no term, no amortization, and no APR. The amount financed is zero.
- If it’s a “One Pay” there is a Term of “1”, not necessarily amortized, probably without an APR, but there is a balance due and the One Payment should be at least equal to the Amount Financed (the only time it should be more is if the dealer is charging interest for the term the money remains due – but this is very rare). Most of the time the finance manager will change the days to first payment under F&I to “3” or “5” or “7” days. That way when the contract prints the buyer is on notice that the balance from his finance source is expected in less than a week.
There may be times when a “Cash Deal” is “papered” as a “One Pay.” This happens when the buyer brings the check from his credit union when closing the deal. The dealership treats this as Cash but the title being prepared for an outside lien holder means it was really a “One Pay” deal.
The other side of that coin is the “One Pay” where the buyer turns in his trade and paperwork and any cash down but is picking up the new vehicle in a couple of days. There are plenty of dealers where the only way the new vehicle leaves the lot is when the check from the buyers' finance source is in their hand. Service may have the vehicle ready, but it will be delayed until the dealer has his money. This might as well be called a “Cash Deal.”