For that matter, even if you can't pay cash you shouldn't get lulled into assuming you have to take the dealer's financing. Shop around a bit, see if you can find a loan where only the bank gets a piece of the pie, instead of both the bank and the dealer. For my last purchase, my credit union gave me about half the rate the dealer offered.
But don't let them know that until they're getting ready to fill out a loan application.
Agreed. Which is why you should never tell them you are paying cash upfront, unless you are dealing with an individual seller who obviously might prefer not to work with financing company. They will give you a better deal if they think they can make it up on the financing.
Individual sellers will more likely give favor to cash in hand, at least I know I would rather have cash in hand for my car.
They make money on the financing, so are likely to be more willing to negotiate on price if they think they will make it back on the financing.
Doesn't mean you can't can't _pay_ cash, but 95% of dealers you don't want to be too upfront about that.