You already have a budget in hand and you know how you will get the money to buy a car but first things first, what kind of car are we talking about here? You see what you have in mind will determine how much you will need to spend. You also need to check the kind of parking space you have, the kind of safety features you have and whether you have a family or not?
How many passengers do you need to carry?
What type of driving do you do: highway, surface streets, off-road?
Will you drive in ice and snow?
Do you have a long commute and, because of that, is fuel economy important to you?
It is a wonderful thing to have enough money saved up to buy what you have been dreaming of and that is a new car. Now that you have the money it is time to get down to business. Getting a new car does not mean going into the first shop you see and getting out with a car. There are a few things you need to know so that you not only get a car but you also get it at a good price.
1. Do Your Homework
Yes, homework is an ugly word. But the amount of savings you might forfeit by failing to do it could be even uglier. Don’t rely on car salespeople to tell you what kind of car will suit your needs – remember, they’re salespeople. There are many traditional websites, like Edmunds, Motor Trend and Car and Driver, where you can do your research. Want the same info, but with a different angle? Check out VroomGirls for expert advice from women who love cars, or TrueCar for a haggle-free experience.
2. Your Salesperson May Be Willing to Make a Deal
Salespeople have quotas, and while selling individual cars may not make a huge dent in their pay, hitting or exceeding a sales quota will. For car salespeople, high volume is the name of the game. The advantage for you is that they don’t necessarily mind if you negotiate the price on your vehicle purchase. That’s the concern of the sales manager, who will be able to approve or decline the final amount. What does that mean for you? You’ve probably got room to negotiate.
Car salespeople are not bad people but still they have to do their job and that is making a sale. This means they can stop you from getting a god price for a car because they are the only ones who know the truth. It is therefore important to know the kind of traps they can set for buyers.
Dealer Trick #1: Negotiating on Monthly Payments
When the salesperson starts talking about monthly payments, watch out.
Clever salespeople want you to focus only on low monthly payments because it gives them room to inflate other variables, such as the loan interest and length. This increases the dealer’s profit — while you spend thousands more on the car overall.
Don’t even discuss monthly payments. Tell the salesperson you can talk financing later, but first want to know their best price.
Pay for the car in cash or get your own financing if you can, but don’t reveal how you’re going to pay until after you’ve negotiated down the total car price. (Dealers may be less likely to negotiate if they know they can’t profit from your financing.)
Dealer Trick #2: Telling You Your Credit Sucks
If you don’t know your credit score, all dealerships have to do to rip you off is say you don’t qualify for a better rate. Perhaps a bank would offer a 5% loan; the dealer might say 7% is the lowest for your credit score.
Pull your credit report for free and know your credit score before setting foot in a dealership. Again, shop around for financing and get it on your own if you can. Whatever your credit score, at least you’ll know if the dealer’s trying to pull a fast one on you.