Five Tips on Buying a Car - And Saving Thousands
Buying a new car is a complex ordeal. Follow these 5 helpful tips to get the best possible deal.
Published on May 9th, 2019. Last Updated on .
1) Look at ALL the cars - even if you already know which one you want
Looking at only one car reveals to the sales person how interested you actually are. This will be leveraged against you. Especially when it comes time to negotiating the final cost. Instead, look at the most expensive car. Then, the cheapest. This creates the impression that you're really not too motivated to buy any car, and not too eager. You certainly won't give the sales person anything to hold over you when it comes time to negotiate down the final cost.
2) Wear ANYTHING but your Sunday Best
You might think you should dress professional - or at the very least, presentable - for something as official as buying a car - but resist the impulse. Looking "well-to-do" is a sure-fire way to say you have money to burn. The sales person will negotiate accordingly. Instead, wear something comfy. Flip flops, shorts, your gym clothes, your favorite shirt - whatever - anything other than clothing that infers you have a lot of money to spend.
3) Take a buddy
Buying a car is not for the lone wolf. Always make sure you have someone with you. A spouse, a significant other, a best friend, a parent, anyone. For starters, another person can temper your passions when it comes to picking out the correct car. It's more difficult to buy something you can't afford when an objective third party is looking over your shoulder.
Another reason to take a buddy is the test drive. You'll need someone to distract the sales person's conversation while you actually focus 100% on YOUR experience of driving the car. Not on making chit-chat about the infotainment system. It's important to know how you fit with the car, and how the car fits - or doesn't fit - with you.
4) Check elsewhere for financing
Yes, the dealer does offer financing in-house. But, depending on the time of year, the economy, and a few other factors, relying on dealer-financing is generally the worst option. Remember. A dealership is not a bank. It is simply reaching out to an auto lender and going through the process for you. Whatever the loan is, the dealership will add in a little more for its own compensation. This means... you pay more.
At the very least, you must check out other options for financing. The first stop should be your your local bank! See what their "auto rates" are going for. Next, check competing banks. Then, move the search online. CarsDirect, MyAutoLoan, U.S. Bank, Bank of America, RateGenius, BankRate just to name a few, offer a variety of financing options. Many of them extremely competitive.
When you find financing to your liking, ask to be pre-approved for the loan. Armed with a guaranteed loan amount and interest rate (especially one you're already comfortable with,) take the pre-approval letter to the dealership. Because it's in their best interest for them to provide the financing (more profit for them,) they will negotiate accordingly.
5) Fix a maximum amount in your mind.
Before you step foot on the lot, pick a dollar amount - $10,000, $25,000, $40,000 whatever. And stick to it. You promise yourself NOT spend more than this. Be willing to walk if negotiations should pass this pre-determined ceiling. Doing so will give you an unconscious confidence in negotiating the final purchase price.
No one wants to go into the car-buying experience unprepared. Following these five helpful tips will put you way ahead of the pack when it comes time to pick the exact car you want, and get the best price for it.