Just like everything else, cars keep getting more expensivenew car prices have risen steadily in recent months, and will probably just keep getting pricier (the average new car now costs an eye-watering $49,740). Thats one reason why about half of all car buyers finance their purchase, and why we collectively owe an astounding $1.644 trillion in auto loan debt.But thats also why about 38% of car buyers bought their vehicles with cash. Cash offers some advantages, especially if youre looking to avoid interest and monthly payments that can mess with your budget. But if you decide to buy your next car without financing it in any way, theres one thing you should absolutely never do: Tell the dealership.The benefits of buying a car with cashBuying a car with cash doesnt mean you dump an oil drum of pennies on someones desk, it just means youre not financing the purchase with a loan. Theres absolutely no reason you cant do this as long as you have the funds, and buying with cash has some serious benefits:No monthly loan payments. If youve ever financed a car, you know that paying several hundred bucks a month can put a crimp in your finances for years to come.No interest. Paying cash means you dont have to pay extra on top of the price of the car.Avoid overspending. When youre financing a car, salespeople usually keep you focused on whether you can afford the monthly payment, which can obscure how much youre actually paying for the car. Paying cash means you dont go over your budget without realizing it.True ownership. If you pay cash, no one can repossess the carif you decide to sell it, it will be solely your decision. Plus, you start off with 100% equity in the vehicle.On the other hand, dealers make a lot of money by getting you to finance the purchase through them. The majority of dealer loans have a markup of up to 2.5% that goes directly to the dealer, which can translate to a fair bit of money over the course of a car loan. That gives them an incentive to offer you a better price or to throw in extrasas long as they think that extra money is on the table.The best way to buy a car in cashPeople think buying a car in cash will get them the best price, but its actually the oppositeonce a dealer knows they wont get the extra money through arranging financing, theyll have less interest in crafting an appealing price and throwing in extras.If youre going to pay for the car in cash, there are a few basic bits of strategy you should follow:Deflect. Salespeople will often ask you directly how you plan to pay for the car. If youre going the cash route, deflecttell them youre considering options, or tell them you want to hear your financing options. Dont lie, necessarily, but dont admit youre paying cash until you have to.Negotiate the final price. Get the best deal you can on the vehicle, including anything you can get thrown in (like coatings or free upgrades). Get it in writing, if you can.Arrange payment. Once you have the total cost of the car nailed down and you inform them that youre not interested in financing and will be paying cash instead, be ready with a payment method. A personal check can cause delays and might not even be accepted, so having a cashiers check from your bank is probably the easiest and safest way to handle this.Its not impossible that the dealerships finance department will be unwilling to close the deal if they assumed theyd be making a profit from a loan. But if they wont honor the price you negotiated when you want to pay cash, ask yourself if you can trust this dealer at all. If a dealer wants to blow up a sale when you want to pay cash, its best to walk away.Paying cash for your next car wont magically make it a bargain, but it can save you a lot of money over timeas long as you dont tip your hand too early.