Buying a Car? Don’t Get Ripped Off

Buying a Car? Don't Get Ripped Off

Know Your Facts, Get the Best Deal

Shopping for a new car can be a very exciting time, but it’s not without its potential challenges. Looking for the best deal means being diligent and knowing what types of strategies a dealer is willing to use to get the most out of you. Preparing beforehand means running credit, squaring away financing and knowing exactly what you want. When it comes time to purchase, these few tips can show the dealer that you’re no pushover.

Focus on More Than Monthly Payments

Many buyers have a monthly budget in mind when they’re shopping around. They don’t want to exceed a certain amount per month when it comes to car payments and insurance, so they look for cars that fit that price range. However, dealers can be particularly shady when meeting this number. They can easily lower payments simply by extending the life of the loan, which can sometimes end up multiplying the end cost of the vehicle. Instead of focusing on the monthly payment first and foremost, shoppers should try to haggle down the price of a car they’re considering and know their trade-in value if they have one.

You can also haggle over prices or qualify for a loan outside of the dealership, cutting out the middle man and knowing your bottom line before you start shopping.

Deduct Costs

Any used car is bound to have some sort of flaw. Don’t be afraid to use this as a bargaining point. If it’s something you might want fixed when you own the vehicle, ask for a deduction on the cost to pay for the flaw or defect. Even if you never get it fixed, it’s worth using it as a bargaining point.

Say “No” to the Extras

Sticker prices often include a variety of extras that buyers don’t know they can have removed. For example, dealer prep fees, Additional Dealer Markup (ADM) and special value packages all offer little to the buyer. They’re heavily inflated costs involved with getting the car ready for sale, which has nothing to do with the shopper. Dealers often waive — or credit — the costs during negotiations, so don’t be afraid to ask.

GAP insurance and extended warranties are two other “extras” that dealers offer to buyers, but they’re not always worth the cost. Extended warranties often don’t cover enough to justify the price, and GAP insurance is often cheaper through insurance companies than it is through the dealer. It pays to shop around for quotes.

Wield Your Buying Power: Know Your Credit Score

A person’s credit score defines their buying power. The stronger and higher the score, the lower the interest rate on an auto loan. However, some dealerships try to trick buyers into taking loans with higher interest rates because of the financial kickback they receive.

A shopper’s best bet is to run their credit score at home, then shop around at different credit unions and banks for the best rates. If they get their financing in place before ever visiting the dealership, they’ll be in good shape to get the car they want without overspending and falling victim to common dealer tactics.

If you’re in the market for a car, doing your research can save you hundreds, if not thousands, of dollars. Take advantage of these tips and get the best deal you’ve ever had and still get the car you want.

~Here’s to Your Financial Health!