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How To Save When Buying A Car

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Buying a new car can be one of the most frustrating purchases in a consumer’s lifetime. While it’s not the biggest expense ever, negotiating with a car salesman can be a big enough headache that you’ll never want to do it again.

After researching the car you want to buy, go to the dealer with a plan for getting the best price. Here are some tips that we’ve found:

Shop for incentives: January is typically a slow month for car dealers, who try to boost sales by offering incentives such as cash back or 0 percent financing. The website realcartips.com recently detailed January incentives that included up to $5,000 cash back and 0 percent financing on leftover 2011 models from GM, Chevrolet and GMC.

Shop for a loan: As mentioned above, some car companies will finance your car and charge no interest on the loan. They still make money through increased vehicle sales, since the rates are usually only good for certain models.

You’ll usually have to choose between the cash back rebate or the low financing rate from the dealer. Shopping around for a loan will let you get both if you can get a low loan elsewhere.

Before looking for a loan, know your credit score and fix any errors in your credit report. Places to check for loan include Credit Sesame, credit unions, banks, online auto lenders such as Auto Credit Express. After you’ve found a good loan rate, ask the dealer if they can beat it.

Don’t go to a dealership: Bruce Bueno de Mesquita, author of “The Predictioneer’s Game,” tells in this video how to get the lowest price on a new car. He recommends against visiting a dealership, and to instead call all of the dealers for the car you’re interested in within a 50 mile radius or however far you’re willing to go to buy.

Tell them you plan to buy a specific car and list the options you want on the car, and that you will decide by 5 p.m. today. You ask them for the lowest price they can give you, which should include all taxes, and that you’ll go to the dealer with a check for the best price. It’s a great idea if you can afford to pay for a car upfront without financing.

Negotiate everything separately: If you’re trading in your car, you’re unlikely to get much money for it. Don’t let a dealer combine the price of your trade-in with the new car price. It’s confusing and can hide the fact that they aren’t giving you much money for the trade-in.

When I bought a new car the salesman quoted me a price with my old car as a trade-in. I asked what the price would be without selling him my old car, and it was $100 less. I sold my old car on my own.

When negotiating everything separately, also don’t bargain based on the financing deal or the monthly payments. Focus on the overall price of the car, not how low they can make the monthly payments.

Time your purchase: Since car salesman work on commission, they’re anxious in the final days of the month to meet their sales quotas and will make better deals. Christmas is now long over, but if you can wait until the end of the year, between Christmas and the New Year is a great time to shop for a new car because most people don’t do it at that time of the year and dealers are looking to meet goals for the number of cars sold by the end of the year.

Walk away: If you do go to a car dealer and don’t get the price you want, walk away. You could spend an afternoon haggling, but that’s no fun and walking away may be the best way for the salesman to immediately come down to your price. They know you’re unlikely to return if you leave, so it may be their last chance to get you to buy.

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