Buying Cars: Get Great Deals on New or Used Vehicles
Some people cringe at the thought of having to haggle over the price of
a new car, while others are excited by the thrill of the "hunt." No
matter which category you fall into (or if you're somewhere in
between), it's easy to get taken for a ride when you decide to purchase
a car.
Even if the salesperson is just trying to earn an honest dollar, these tips NOT to do are essential for every car buyer to know.
1. Do not go car shopping before you know what you want.
Once you enter a car sales lot, it's easy to get sucked into "special
deals" and drive away with an impulse purchase. Do a little research
first (online, at car shows, by talking with friends) to determine what
kind of car you're after -- and their going rate.
2. Do not shop without knowing what you can afford (and your credit score).
Profits on used cars can be two or three times higher than those for a
new car. A salesperson may, therefore, try to sell you a used car for
that reason. It is essential for you to know how much you can afford,
so you know whether a new or used car is right for you. Also, your
credit score will drastically influence what kind of interest rates you are offered on a loan. If you know your credit score, you know what kinds of interest rates should apply to you.
3. Do not tell the dealer how much you want to pay per month.
It's easy to get a $350/month payment for many cars, for instance, but
that doesn't mean the final price of the car is the same. How many
months the payments extend for and how big a down payment you make both
affect the final price of the car. You should only speak of the car's
price in terms of the total payment.
"Never answer the question,
'How much can you pay each month,'" says James Walsh, editorial
director with Silver Lake Publishing in Los Angeles. "Stick to saying,
'I can afford to pay X-dollars for the car.'"
4. Do not assume the dealer is the best place to get a loan.
As with any other loan, you can shop around, compare offers and get the
best deal you can negotiate. "It's very important that buyers not think
of the dealer's finance department as their loan agent. The dealer is
not required to find you the best rate, and might add to the number by
serving as the middleman," says Joe Wiesenfelder, senior editor of
cars.com.
5. Do not trade-up your car before paying it off.
It may be tempting to trade your car in for a newer, flashier model,
but doing so before you've paid it off is very risky. It can be done
legally, by "rolling over" your remaining balance into a new car loan
or lease. But in the event that the car is totaled or you trade it in,
you'll still owe the large balance from both cars.
6. Do not accept a six- or seven-year loan without very serious consideration.
It may be worth your while to extend your loan for a long time period
in order to get lower monthly payments. However, be aware that you'll
still be making payments as the car is depreciating in value, meaning
that at some point you'll be paying more than what the car is worth.
"These loans take forever to pay off," says Mark Perleberg, lead
automotive expert with NADAGuides.com.
7. Do not discuss your trade-in before negotiating a price for the car.
Once you tell the salesperson that you'll be trading in a car, they're
likely to inspect it right away. If it seems like they're giving you a
good amount for it, it's likely because they're planning to make up
that money in the price you pay for the car. You should always
negotiate the lowest price for the car before discussing your trade-in.
8. Do not tell the salesperson you love the car.
If the salesperson knows you want the car, you lose negotiating power.
9. Do not leave a cash deposit.
If you later change your mind, you're not likely to get the deposit
back. It's also not wise to leave more than $250 for the deposit. If
the salesperson says they cannot accept less, walk away.
10. Do not feel obligated to buy a car because you test drove it.
Test driving a car is necessary to determine if it's right for you --
but does not mean you're in any way obligated to purchase the vehicle.
11. Do not sign the paperwork without checking it over.
When you decide on a car and agree on a price, you will receive stacks
of forms to sign. Make sure the numbers match up with what you've
agreed upon, and check to make sure there are no bogus fees or extras
(like fabric protector, an alarm, etc.) that you did not authorize.
Buying a Used Car - Some Extra Tips
Although
the above tips apply to purchasing a used or new car, purchasing a used
car brings up a whole new set of considerations. When buying a used
car, be sure you do the following things before driving away with the car:
-
Ask for the car's maintenance record from the owner, dealer or repair shop.
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Test-drive the car in a variety of areas (hills, stop-and-go traffic, highways, etc.).
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Have a mechanic that you hire check it out.
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Realize that if you buy the car "as is," you'll be responsible for any and all future repairs.
-
Make
sure the car has the Buyer's Guide if you're buying it from a dealer.
The Federal Trade Commission's (FTC) Used Car Rule requires every used
car sold from a dealer to have one.
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Have any oral promises put into writing.
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If buying from a dealer, check it out first by contacting local consumer protection officials.
