Here are excellent suggestions you should always keep in mind while scouting for and inquiring about the car models you wish to buy:
What does your credit report say about you? Before you apply for ANY type of financing you should make sure you have looked at all 3 credit reports & fixed any errors you find click here to see all 3 credit reports and your scores
Know the value of your trade in
If you are trading in a car research what is worth on Kelly Blue Book don’t expect a fair price from a dealer. Know what your car is worth BEFORE you trade it in.
Negotiate your trade in separately.
I like to act like I have no trade in so I negotiate the cost of the car first. Then I say, well, what would you give me for this car…. I know what the blue book value is already and I’ve already negotiated my best deal on the new car. Lots of dealerships pretty much steal the value of your trade in by not negotiating the new car price as low as they could go.
Before you walk into the dealership make sure you have a car loan approval – that way you know how much you can spend and what your monthly payment will be
Don’t be a payment shopper
Don’t let a car dealership sell you a car based on its monthly payment. Any good salesman can easily make that car fit any payment you want. Negotiate only the price of the car and your trade in – by having a car loan pre approved you already know what your monthly payment is and what the interest rate is. Avoid this BIG mistake at all cost!
Hold Your Cards Close To Your Chest
Don’t tell the dealership you have been pre-approved for a loan until AFTER you have negotiated your best deal for the car. Many dealerships make hundreds, if not thousands of dollars on the financing of your car. If they know up front that they won’t be making money on the financing they are less likely to give you as good a deal as you deserve!
Watch your wallet when you go into their finance room!
That’s real the real money is made for the dealership. From the interest rate to the useless warranties, the finance guy’s job is to tack on as many extras as they possibly can. This is where having your own pre-approved auto loan comes in handy.
Keep A Level Head
Don’t get caught up in the excitement of buying your new car. If need be take a break, just like your salesperson who keeps going back and forth talking to their manager, you should get up from time to time for coffee or smoke break. The dealer will try to keep you on property but walk out and clear your head. When / if you come back the dealer will be very eager to close the deal quickly (for fear of your walking out and NOT coming back
Are you upside down on your current car loan
Be aware of the true cost of rolling an existing loan into your new car loan. Keep in mind if you are buying a new $30,000 car and still owe $7,000 on your old car you are effectively agreeing to pay them $37,000 for a car that is only worth $30,000 and the moment you drive off the lot its probably only worth $25,000! By rolling the old loan into the new loan, you are now effectively $12,000 upside down!
Get it in writing!
Make sure you have all loan approvals and car pricing negotiations in writing! Some dealers have been known to approve an applicants loan and let them drive off the lot. A few days later they call the applicant and say the bank didn’t approve the loan. At that point they tell you all is not lost! They have another lender ready to approve you, but that 4% interest rate they promised you is now closer to 13%. They know most people will come in and just sign for the new loan, they love their new car & all their friends have now seen them in their new ride. It would be embarrassing to have to return the car. Don’t be that sort of buyer. Make sure you are approved by an outside lender along with/ the dealer so you have your own back up plan. Don’t be afraid to return the vehicle and don’t let them high pressure sales you into either keeping that car or moving you into a cheaper not as nicely equipped car.
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