These days, customers paying cash for new cars are no more attractive to car dealers than are those who wish to finance the purchase. In fact, the opposite is more likely to be true. That's because dealerships typically finance through one of several lending institutions (banks, credit unions, or the automaker's captive financing division) that pay them cash when a contract is presented. Plus, if dealerships do the financing on the buyer's behalf, they tend to make even more money, since they get a fee or can add a mark-up as additional profit. This is one reason you should always arrange financing before going to the dealership, and then ask the dealer if they can beat your pre-approved rate.
Cash can be an advantage for people who suffer from poor credit or have experienced a recent bankruptcy because it allows them to avoid the higher interest rates charged on sub-prime loans.