Tips For Buying A New Car
It is always quite an exciting time looking around for a new car; checking car brochures, scanning through the newspaper ads looking for our ideal used car; planning which car to go and see. Once you have a short list of cars to look at, though, you need to start thinking about how you will finance the purchase. Most people end up taking out an auto loan, but while concentrating on getting the right car at the best price, it is easy to overlook the details of the loan. But that's not all, maybe you could get a better deal on the car itself with a bit of preparation; and here are a few tips to help you do just that.
The article below is intended to provide tips to help you with that preparation for buying your new car, so that you end up with the best price, for the best car, on the best loan terms.
Tip 1 - How To Get A Good Deal on a New Car
Shopping for a car can be a hazardous process, especially for those of us who are not mechanically minded. That is particularly the case with second hand cars; can you really know its true history, its mileage, it's real value? Then there is having to deal with salesmen who live on commission, and will do everything to sell to you at the highest price, even if what they are trying to sell to you is a lemon, or nothing like the car you set out to buy.
There is no doubt that you will have a better chance of getting a good deal, for a good car, if you prepare yourself well before walking into a car dealership. Below are just three of the things that you should do to prepare yourself to get the best deal on your new car.
Tip 2 - Financing Your Car Purchase With A Loan
It is likely you will be financing your car purchase through a loan. If so, you should be aware that the finance offered by a car dealer is probably not going to be the best. It is important for you to compare the interest rates and terms with those of other lenders, and then select whichever one will offer you the best deal. In fact, try to get an offer in principle for a loan from your bank or other reputable source before you go, that will give you bargaining power when you visit the car dealers. In effect, you can become a cash buyer.
However, there is no reason why you should not consider dealership finance as a comparison. If you do, look closely at how your down payment will affect your loan balance and monthly payments. Remember, a 1 percent change in your interest rate will not only affect your monthly payments, but your overall loan balance as well! Finally, be sure that the dealer hasn’t included any insurance or warranties in your loan balance that you didn’t authorize, otherwise you could find yourself paying thousands of dollars that you hadn’t intended to. Ask to see a complete listing of all charges before you sign on the dotted line.
Remember also that there may be a trade of between dealership finance and price of the car. You can best judge that if you can ascertain the best cash price for the car first, and then see if it changes when you ask about dealership finance.
(Please also see Looking For A Car Loan)
Tip 3 - Do Your Research On Car Prices and Features
You really should know what type of car you are interested in, and how much it should cost you, before you even walk into a car dealership. The sales person's objective is to get you to pay as much as you can for your car. Your aim, of course, is just the opposite; buying the car at the lowest possible price! Begin by doing some online research to find out the going rate of the car you want, and then check around in various dealerships, auto trade papers and newspapers. You should be aware that the “sticker” price on the windshield of the car is not the final price, unless you allow it to be. Treat the price on the car as the starting point, from which you are going to negotiate downwards. You should be able to negotiate between 10-20% discount off that displayed price.
Tip 4 - Playing Your Car Trade-In Card
If you have a car already, that you plan to trade in as part of your purchase deal, don’t present it to the dealer until after you have negotiated the best price on the new car. In preparation, find out what the wholesale market value of your old car is. Dealers will sometimes, if not often, try to pay you a fraction of what a trade-in is worth. This would, of course, increase their profit.
After you have done your research on the wholesale value of your car, stand firm and do not allow the salesperson to take advantage of you. tell him bluntly what the trade-in price should be if he offers below what you have found to be the wholesale value. If you find that you cannot get as much trade-in value as you think you should, then be prepared to walk away from the deal, sell the car on your own, and later return with the money to use as a deposit or as part of a cash purchase. This will take some time, but you will be better off financially.