Americans like to buy a car at the dealership in one afternoon, and the dealerships try very hard to make you feel that’s possible and even smart. However, it’s not. Realize how big a purchase a car is. And it’s complicated.
Purchasing a car is your second-largest purchase most people make after buying a house. When you purchase a home, think about all the help you have: you have a broker that will help you get the best home for you, and a mortgage broker that will assist you discover the best financing. And an inspector to be certain that the house is safe. Sometimes you have an lawyer to make sure that the contract is fair, and a title company makes sure the name is clear before you cover the house. However, when you buy a vehicle, there isn’t one person there to assist you. And the dealers want you to THINK you can waltz into the dealership and buy a car from start to finish in a day… and sure, you can, however you’ll pay much much more should you do it like that.
Here are four tips to give you an advantage:
1. Make at least one trip to the dealership merely to look around and push the cars. Promise yourself you won’t purchase that time, no matter what. Why? So you can go home and look up info on the world wide web, including dealer cost, safety ratings, option prices, and any manufacturer to dealer incentives which the trader has not told you about!
2. Know what you can afford before you go to the dealership to purchase! This means speak with a banker or credit union officer before visiting the dealership. Why? Some dealerships may actually WANT you to register to get a more expensive car than you can afford so that you’ll then default on your loan and they’ll repossess the car.
3. Whenever the fund manager calculates something, insist that he show you the calculation. Why? The simplest location for dealerships to take more money from you’re at the monthly payment. It’s extremely common for traders to increase monthly payments by only a couple bucks, even $20 a month, over about a five year period is similar to giving the dealership $500 extra on the spot.
E.G.. Should you tell the salesman you are able to afford a payment of $500 a month, he might get a deal for you where the payment works out to $460 a month. But rather than telling you , he might tell you he has»good news»!! – – your payment is down to $480. What happens to the $20 difference between the creditor» $460 a month and the $480 the dealer is charging you? It goes right to the dealer’s pocket, and you won’t ever know it unless you Len how to conduct the calculation yourself, or at least run it by your banker. How much would a dealership make, taking in an additional $20 per month for five decades, on a loan with an interest rate of 3.9%? About $500. It’s near impossible to figure this type of thing outside without a financial calculator, or a friend with a financial calculator. However, it’s worth the trouble!
4. Write down everything you lean about the car, from the world wide web, magazines, and especially from the salesman. Why? Doing this keeps everyone honest, and literally»on the same page»–YOUR page! Your salesman will understand that you’re writing down what he says, and he’ll be less inclined to lie, or to attempt to modify information on you in the future. This tip is all about staying in control.