Dealerships may not like it when paying for your car with cash. It’s obvious that dealerships make some profit on a car sale as well as the trade-in for those who have one. However, most car buyers don’t realize there’s a third way in which dealers make money when you buy a new vehicle. The majority of car dealerships make their most profit through auto financing. In this way, they can charge a loan mark-up that gives them the bulk of their profit. For instance, they can set you up with an auto loan from one of their financing partners at 7% interest, while the actual rate is 5%. It means there’s an additional 2% loan markup for their gain. That’s why you should never disclose to the salesperson that you intend to pay with cash until you finalize the deal.