When you are buying a car, the objective of the auto dealer is to sell a vehicle at the highest price possible. Your goal, however, is to purchase a car at the lowest feasible price. No matter how strong or weak the market is for buyers, there are time-honored strategies available that will help you get the most car for your dollar.
Decide What You Want Your Vehicle to Do
Are you looking for a sports car? If you have a spouse and children who rely on a car for transportation, consider a minivan or a sport utility vehicle. If you're looking to save on gas mileage, consider a gas-electric hybrid version of your desired car, or look for a model that has a high gas mileage rating.
Investigate Any Potential Additional Costs
Besides the monthly payments or the price of purchasing the car outright, there are other issues to consider. Primarily, there is the cost of maintenance. If the vehicle is known to have frequent or costly breakdowns, it might not be worth buying at any price. Also, look up its rating with various insurance companies. Some cars cost more to insure because of their high theft risk. Of course, gasoline mileage is also an important issue to consider.
Check Your Credit Rating
Knowing your credit rating ahead of time will prepare you for what to expect in terms of financing options. Check out the Annual Credit Report website before you seek a car loan. Address any inaccuracies and correct any derogatory statements on your credit report. This will affect the interest rate on any car loan you may obtain.
Assess Your Financing Options
Getting pre-approval for a car loan is one of the two best options as it strengthens your hand with the dealer when negotiating a price. Equally good is having cash on hand. Either way, a dealer will be under pressure to sell the car at a lower cost, since he won't want you to go to a competitor with your money.
Investigate the Vehicle's History
If you're buying a used car, find out its maintenance and accident history before considering it. Check CarFax or InstaVIN, which will give you information on the vehicle for a small fee. Always inspect a prospective car. Test every known feature, from the air conditioning to the power windows. And most importantly, give it a test drive.
Know the Price of Your Car Before You Negotiate
Check the Kelley Blue Book website to see the price for your used or new car. Be sure to get prices for the prospective vehicle from several other dealerships before you decide which one you want to buy from. Write down a list of the dealerships and prices and have it on hand.
Negotiate With the Auto Dealer
Always be ready to walk away if you don't see the dealer offering a reasonable price. Never look nervous or desperate. If you have a car that is dying and you need to replace it soon, have a relative or friend drive you to the dealership. Do not let the dealer know your situation. Speak to the dealer in terms that lets them know you're doing them a favor, not the other way around. Always negotiate with more than one dealership, and if possible, play their offers against each other.
