The first step is to make sure that you negotiate the car's price
separate from the vehicle financing arrangements. Most dealers
want to lump it all together because they can hide quite a bit of
the actual price of the vehicle in the loan contract, and they
will usually just try to meet a monthly payment figure that you
can live with rather than disclose all the details about the
loan.
So your work actually should begin before you ever visit the
dealer lot. Try to determine beforehand what vehicle (s) you are
interested in buying and become familiar with the average cost
for that vehicle, either online or locally. Then make sure that
it will fit your budget. Most financial experts recommend that
you shouldn't spend more than 10% of your monthly income on
vehicle costs, including the loan, gas, repairs, insurance, etc.
Since you now know the price that you want to pay, you need to
find out what the loan will cost, so visit some auto loan
websites and/or local banks, and apply for an auto loan. See what
rates and terms they offer you. Much of that will be determined
by your credit history. If you can get pre-approved for a loan,
all the better.
Experts also recommend that you try to put at least 20% of the
car price on the loan as a down payment toward the purchase of
the vehicle, either in cash or in the trade equity of your
current vehicle. Why? Well, so many people are being put into
loans these days with longer and longer payback periods and
little down payment and the net result is that if they want to
trade that car in within the first year or so they find that they
actually may owe more on the car than it is even worth. So using
sound financial decisions beforehand can prevent this from
happening.
Now, using all of this information, the price you are willing to
pay for the vehicle you want, the average loan you can get, and
the best terms that you can get that will fit within your budget,
you are now ready to visit the dealer, find the vehicle you have
been thinking about and get the deal that will fit your needs.
Remember to negotiate the price of the vehicle without financing
first. After you settle on the sales price you can then reveal
what finance terms you already have found and see if they can
beat it.
Get the particulars in writing too. What is the price for the new
vehicle? What is the trade amount for your old vehicle if you
have one? If you finance through the dealer, what is the APR, the
total amount financed, the total amount paid at the end of the
loan, the total number of payments and the monthly payment figure
itself? If the dealer will not give this clear, concise
information, leave and go somewhere else to buy. If they can
compete with your prearranged loan terms, then great. If not, get
your auto loan elsewhere.
A word of caution. Keep it to business. It's exciting to buy a
new car and it's also easy to get carried away and buy more
vehicle than you need or previously wanted just because it looks
so good or has so many features that the dealer will try to
convince you that you can't live without. Having predetermined
what car you want and the price you are willing to pay will keep
you safe in these negotiations but only if you stick to your guns
and don't give in to being upsold.
Using these strategies keeps you in control of the negotiation
process and keeps you informed all along the way so that you can
be confident that the vehicle and the auto loan you purchase is
indeed the deal that you wanted.
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Have you ever felt like you bought an auto and financed it and
don't really know if you got the right price or financing arrangements
after it was all over? Well, don't feel alone. This is a common experience
for many people who make auto purchases.Guidelines for negotiating the car price can be found elsewhere,
but we want to share some helpful tips on getting that vehicle
financed at the best rates and terms for you.
Auto Loan Buying Tips
by Duane Lipham
Get Informed
About The Author
Duane Lipham is a successful web author who specializes in
providing free consumer related buying information for the public
on a wide range of products.
More Details at: http://www.loans.dlbws.com
