Buying a car, whether old or new, is a substantial financial investment. You want to get the best deal you can when you purchase your vehicle, and you want to be sure the vehicle is going to be reliable. Armed with some knowledge, a few car-shopping tricks and by taking the time to shop around, you can increase your chance of coming away with a vehicle you can afford that will serve your needs for years to come.
Know Your Credit Score
Many car dealers will use a poor credit score as a way to come up with financing terms that are beyond your means. If your credit score is poor, you may run into difficult financing terms. Buyers with superior credit scores are more likely to get favorable finanancing terms, like 0 percent financing. Obtain a credit report, and be ready to correct errors and problems before seeking a loan.
Stay Calm
Don't let on that you need to make a deal. Let the salesman believe you are willing to walk away if you don't get the vehicle you want. Even if you've been turned down elsewhere, keep this information to yourself. Show confidence and be certain about what you're looking for. Make the salesman work to satisfy you. Regardless of how desperate you are, let the salesman know you'll walk away if the deal isn't right.
Trade-Ins
Don't mention a trade-in until after a deal has been reached. If you state right away that you have a trade-in and allow the car dealer to figure it in up front, you're likely to have figures juggled to take the trade-in into account. By waiting until the figuring is finished and you have a final figure, you can bring your trade-in into the equation and work from the bottom-line deal. This can lead to better terms for you. Know the value of your trade-in before you enter a dealership. If you need repairs, consider having your own mechanic estimate the cost of those repairs, giving you a bargaining tool when the dealership has lets their mechanic start deducting repair costs from the trade-in value.
Target Pricing
When purchasing a new car, your target price (what you want to pay) should be below the manufacturer's suggested retail price. This price appears on the sticker. Many people begin negotiating from that MSRP, but this should not be your starting point. Research any discounts the dealer may be offering and use that price as your starting point for negotiating. Aim for 1 to 5 percent over the dealer. Figure the dealer's actual cost by finding the dealer invoice price and subtracting dealer sales incentives from this figure.
Used Car Buying
Used car purchases can be challenging. When possible, always take someone with you who has knowledge about cars. It may even be worth the expense of taking a trained mechanic if it saves you from purchasing a car that will break down on you shortly after purchase. Do not enter into a spoken contract regarding any warranty or guarantee the seller makes. If the seller of the car guarantees it is in good work condition, get this in writing and signed.
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