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Top 5 Tips for Buying a Vehicle
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#1. First, do your homework. Learn all you can about dealer tricks because they can quickly erase any discounts or other savings that you think you're getting. Car dealers spend millions of dollars training their salespeople to get more money out of customers, and if you don't know the tricks they use, you could be overcharged by thousands of dollars.
#2. Find out the dealer's real cost on the car (it's typically less than invoice) and the prices that smart shoppers are paying for that particular vehicle, then research any other items you might want (loans, extended warranties, car alarms, etc.).
#3. Shop around for competitive auto loan (or lease)
rates at banks, credit unions and lenders on the Web. When you find a great interest rate, get pre-approved at that lender before you start negotiating with dealers. If a dealer can beat the rate you found, let him finance the car -- on a "simple interest" contract only. Otherwise, stick with your pre-approved loan. And don't forget to shop around for insurance before you buy that new or used car, or you may be in for a shock. To save you time and money, we've listed the best places for you to get free quotes on new or used cars, auto loans, car insurance, extended warranties and more.
#4. Make dealers compete (and drive the price down). To do this, use the Internet to get at least 4-5 price quotes before you start negotiating with any dealers. When you get to the contract stage, make sure the dealer doesn't slip any hidden charges into your loan or lease. This is known as "payment packing." To avoid this common rip-off, calculate your own monthly payments using an online loan calculator or an bank loan amortization table, quoting interest rates and monthly notes (gotten from most banks).
#5. Finally, ALWAYS negotiate the price. |
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A Secret the Dealer Won't Tell You |
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Quoting "packed" or "loaded" payments is a deceptive practice that is commonly used by car dealers. It's even taught to their salespeople in training seminars.
Here's how it works:
When the customer asks how much the monthly payment would be on a particular vehicle, the salesperson gives them an inflated figure that represents a higher loan amount or APR. For example, if the correct monthly payment was $400, the customer might be quoted a payment of $450 instead. On a 6-year loan, this would end up costing the customer an additional $3,600. If the customer (unknowingly) agrees to the inflated monthly payment, the dealer then has a number of ways to get his hands on the additional money. For example, the customer might be talked into getting one or more high-priced (and high-profit) items like an extended warranty or car alarm, "at little-or-no extra cost." (At least that's what the customer is told.) Or the customer might be charged an APR of 11% on a loan when the going rate is only 8%, so the dealer can pocket the additional finance charges. And if inflated payments were used on a lease, the extra money could represent a secret price or APR increase. This little scheme is frequently used to trick people into leases: Dealers simply quote inflated loan payments to make a conventional purchase look a lot more expensive than a lease. You can avoid this scam by using the Internet to find competitive rates on car loans, then calculating your own payments. of the car, not the monthly payment.
When in doubt; seek the professionals at Car Buyer's Etcetera. We can help you get the car you want, for a price better than you thought you could afford! We study the car market, so you don't have too. Knowing the tips are great; but, once you get there, and you don't know what to look for, it can be very frightening for some consumers. While knowing is half the battle, how to implement what you know under pressure once you're in the finance office, is extremely cruicial.
Get the Car Buyer's Etc Advantage by using our "Consultant for a Day Service Package," which allows you time with a consultant on the day you purchase a vehicle, from your area, via phone or in person.
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