Money saving tips for the next car financing deal you sign
Save money and get the best possible deal before signing a deal for a new or used vehicle with financing tips like these.
You walk into a car dealership. There on the showroom floor is the most beautiful car you've ever seen. Checking it over, you can see that the vehicle is in perfect condition, offers all the features you want, and is the perfect color, too. So you pull out your checkbook and write in a substantial down payment amount with the intent of financing the balance.
But wait!
Before you agree to the sticker price, which means that you will likely have a hefty monthly payment for the next few years, take a little bit of time to get the lowest price and best terms possible.
1. Negotiate on the asking price. If you have a trade-in vehicle, try not to mention it until you have gotten the sticker price lowered. Then mention your trade-in. Chances are you won't get much for it, or the salesperson will ask you up front if you have a car to trade in. Still, it's worth a shot that can reduce the final price by hundreds or thousands of dollars.
2. Watch for sales events. Sometimes you can get a great deal on the car you've been wanting by waiting for an end-of-year sale when the dealership lowers prices to get rid of old stock to make way for the new. Often these events feature lower financing rates as well. Why pay 5.9% now when, by waiting a few weeks, you may be able to get 1.9%?
3. Beware of bait and switch. Unscrupulous dealers sometimes advertise a tantalizing deal, only to exchange it for one that is less satisfying when the customer comes to the dealership and picks out a car to buy. Instead of 1.9%, they'll now give you 3.9% financing unless you have a co-signer. Or instead of $500 off, you can have $200 off due to the fact that the sales car is no longer available. Insist on getting the car you came for and the terms that were advertised. If the dealership won't comply, go elsewhere.
4. Shop at the right time. During a sales event, try to visit the dealership toward the end of the day, at the end of the month, at the end of the sale. Many sales staff are eager to make that one last sale to bump up their sales record and possibly win a company bonus. Go in prepared to make the deal you want and don't compromise.
5. Check your credit report. Get a copy of your credit report before financing a new car to be sure it won't raise red flags for the car dealership's financing backer. You don't want a $15 forgotten bill from five years ago to become the tiny glitch that the dealership can use to hoist your financing fees or interest rate.
If you plan to keep your car for several years, put a little thought and planning into your shopping expedition. Browse dealerships online to find the vehicle you want and can afford. Go the dealership only when you feel confident about the actual car you intend to buy, the amount of your down payment, and the financing terms you will agree to. Good luck!
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