There is nothing like the thrill of driving home in a nice new car. I used to sell cars and of course I’ve bought a few myself. When buying your new car its very important to follow a few steps to guarantee you’re getting a good deal. A bad deal can cost you thousands of wasted dollars and could even hurt your credit if you get yourself in in too deep. Try and follow these rules so you can get the best deal possible.
One of the most important rules when determining you’re ready for a new car is don’t go out and make a spontaneous decision. Do a little homework. Even for a couple of weeks or more if necessary. Do a little research on the internet and do your homework on the vehicle you’re interesting in purchasing. Check out the car buyers guide Consumer Reports publishes. They have great information on things people often overlook that factor in to the cost of ownership of the vehicle. They also compare the car to other vehicles in the same class and measure things such as predicted reliability, ride, noise and resale value.
If possible I recommend not trading in your car at the dealer. Car dealers take in used cars as trades to obviously sell them for higher prices then what they’re willing to give you. They want to make as large a profit as possible on your car. In some instances dealers may not have a need for your car and just plan on unloading it at an auction for wholesale price. You can usually get thousands more by selling the car on your own which isn’t that difficult. You can find simple sale forms online and it usually only takes a few hours and a couple small ads placed in local papers or on the internet. Craigslist is a great site to start and they even let you post your vehicle ad there for free.
If you decide to sell the car on your own or if you decide to trade it in, make sure it is cleaned and polished to perfection. When I sold cars I would see the dirtiest and most disgusting interiors in cars brought in to be traded. Many were never even simply washed first. Remember that someone is deciding on how much your car is worth and you’re the salesman and your car is the product. The better the car looks inside and outside, the more the buyer is likely to believe you cared for the car properly. Spend an hour or so washing the car, cleaning the windows, vacuuming, polishing the dash and removing the junk and clutter.
Do your homework on what your old car is worth. A great site for this is Kelly Blue book. If privately selling your car use the site to determine a fair asking price. If trading in your car, look for the trade-in value to help you figure out what to expect its value to be. Remember if trading in your old vehicle that you’re not just negotiating on the price of the new car, but also the value of your old one. Many dealers will try and satisfy the shopper by over inflating the value of the trade-in and not significantly discounting the new car. Others will discount the new car and low ball a buyer on the value of their trade-in. You obviously want to get a high discount and a great price for your old car. That’s why you’re better off usually selling your car on your own to maximize the price you receive for your old car.
Car dealerships make a great deal of their money on the add-ons they sell after the sale of the your new vehicle. Things such as extended warranties and items like car alarms, car starters and radios are usually heavily marked up. I personally highly recommend passing on these. Most of them can be purchased at places like Best Buy, Circuit City and many other local retailers for much cheaper prices and usually much higher quality.If you do feel you have to purchase any of these add-ons, most are also negotiable.
Many dealers will try to scare you and tell you that after market work will void your warrantee. This isn’t always the case and dealers say this to make you want to roll in additional items into your loan and just get the work done there. This is usually not the case as most dealerships take their cars to local stores to put the items in for them anyway. By rolling the highly marked up items into your auto loan you are now going to be paying interest on them for years.
The finance manager you usually meet is usually the one to pitch you the fore mentioned items. Its also his job to try and get you to take a loan he arranges through the dealership. The rate in some instances is also able to be negotiated. They may try to get you to sign a loan with an interest point or two higher than you could get elsewhere. This cost you extra money over the life of your loan and puts money in their pocket. Before even going to the dealership or discussing rates with the finance manager check with your local credit union or bank to get an idea of the current rates out there.
Finally this is my most important rule. Even if you skipped my whole article and jumped right to here remember this. You really are the one in control. No one can force you to buy. The salesman and the dealership need you more than you need them. They want your money and in most cases there are other dealerships where you can buy so you have the edge. SHOP AROUND!!! Try and never, and I mean NEVER, buy on the first trip to a dealership. I have saved myself and others countless dollars by taking this approach. No matter how good of a deal you may have think you worked out, another dealership is usually willing to go that much further to beat it.
If you go in person to the dealership they will usually send in the “closer” if you don’t agree to buy right away. Its okay. Don’t get nervous. Just be calm and be firm after you have heard their best deal. They will even usually sweeten that once or twice more before they finally accept you are ready to go. If they try the “I can only give you this deal today” then they’re getting too pushy and they’re usually lying anyway. If you walked and came back most dealers are not going to pass up a ready to sign deal.
Now that you know one dealers best price and if you have no trade-in you could just call another dealership right over the phone and negotiate. With the amount of competition out there and so many shoppers buying right over the phone and internet now, most dealers will work a deal right over the phone with you now. If you have a trade-in of course you would need to visit the other dealership so they can evaluate your trade.
Be sure to look into car manufacturers discounts. Car companies sometimes have extra discounts for military personnel. There are also usually discounts available for recent college graduates and loyalty programs for those buying or leasing another vehicle from the same manufacturer. If you’re not sure what’s available ask the sales rep, finance manager or look online.
Finally many dealerships now go as far as 7 years for loans on vehicles. Spreading a car out over this many months is a very bad move. You’re more likely to get yourself upside down this way (owing more then your vehicle is worth). This makes selling your car, or trading your car in later almost impossible without coming up with a very large down payment and it means you’re more likely to become upside down on your future cars as well. If you have to stretch your car payments that long in order to get a payment you can afford, odds are you’re looking at too much car for your budget.
Good luck and happy car hunting.