Aside from their home, most Americans will spend more money on their car than on anything else they will buy. And yet, when it comes time to buy that car, most people spend far more time researching the engine, the stereo and the moon roof than they will the finances of the purchase. By failing to do a little homework on the finances, many people end up spending more money for their car, truck or van than they otherwise might.
A little bit of work ahead of time can help you save quite a bit of money on your car purchase. Here are some tips that might help:
Check your credit report - A few months before you decide to buy you should check your credit report for errors. Mistakes on your report could adversely affect your credit score, which will prevent you from obtaining financing at the lowest possible interest rate. While you are checking your credit report, check your credit score, too. That way you can avoid an occasional scam where the salesman tries to trick you into paying a higher rate by falsely claiming that your credit score is too low. You can't fall for that one if you know your score.
Arrange your financing in advance - While you can sometimes get competitive financing from the dealer, you may do better at your bank, credit union, or online lender. Check with those sources ahead of time to find the best possible deal.
Watch for factory incentives - Sometimes, the manufacturer will offer inexpensive financing. In the past, such deals have gone as low as 0%. If such a deal is available, no bank or credit union will be able to match it, so keep an eye out for such incentives. Cash back bonuses are often available from the manufacturer, too, and those can be applied to your down payment.
Check the pricing - A number of Websites, such as Edmunds.com, offer information on pricing. With that information, you can negotiate the best possible deal.
Ponder the extras - Undercoat? Extended warranty? These are things you may wish to consider before the salesman asks you if you want to buy them. Whether you do or not is your own choice, but you don't want to get caught with the extra expenses if these are things you do not need.
Buying a car need not be a complicated procedure, but it works best if you know ahead of time how you intend to go about it. The better your preparation, the less harrowing your experience of buying a new car will be.
1.Shop around for auto financing before going to the dealer. Get pre-approved for a loan. This is one of the biggest mistakes people make in their haste to buy a new car. Take the time to get pre-approved; you will get a better rate and a better deal.
2.Compare APRs from local banks, thrifts, and credit unions, websites, and newspapers. Again, there is a lot of competition amongst lenders for your business.
3.Order a copy of your credit report and correct any errors a few months before shopping for a car. This one takes a little more planning, but should be done anyway.
4.Make the largest down payment that you can. Beware of a low down payment or long repayment plans. The more you borrow and the longer you take to pay the loan, the more interest you pay and the more your car will cost you in the end. Additionally, if you have to sell your car in the first few years, you could owe the lender more than the car is worth. This is a HUGE trap that car dealers have gotten into. They wonder why their sales are hurting. They have been putting people into these long term loans and financing negative equity so long that now people will have to be buried in their cars!!
5.Consider paying for the tags, title search, and taxes separately, rather than financing them. This can reduce the amount of interest that you will pay. Financing those items is just plain dumb, enough said.
6.If you are going to apply for a loan at the dealership, make sure you first negotiate the best price on the car. Beware of dealers who insist on asking you how much you can afford every month. These dealers might be interested in making you stretch out the term of the loan to make the loan sound more affordable. However, by extending the length of the loan, your total cost will increase. This is a BIG trick at dealerships, never negotiate based on payments.
7.Be aware of penalties. Some lenders might charge you for paying off your loan early. Many states have laws against this now, be sure to check the laws in your state.
8.If you need to give the dealer a deposit, make sure you know whether you will get the money back if you change your mind. It is best to get this in writing. Be careful of this and only do it if you really want the vehicle, don't fall for the ?deposit before negotiation? trick.
9.Service contracts, credit insurance, extended warranties, and other options are not required and can be costly over the term of the loan. All of these things are almost pure profit to the dealer, don't buy them.
Both Charles Essmeier & Gregg Hall are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Charles Essmeier has sinced written about articles on various topics from Free Credit Report Score, Mortgage and Cars. (c)Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to. Charles Essmeier's top article generates over 49500 views. to your Favourites.
Gregg Hall has sinced written about articles on various topics from Lingerie, Desserts and Mortgage. Gregg Hall is a consultant for online and offline businesses and lives in Navarre Florida. Get your at. Gregg Hall's top article generates over 3350000 views. to your Favourites.