Buying a car is a significant financial decision, second only to purchasing a home for most people. Unlike buying a home, where you have a team of professionals like brokers, mortgage brokers, inspectors, and attorneys to guide you, car buying often feels like navigating a complex maze alone. Dealerships often encourage quick decisions, making you believe you can complete the entire process in an afternoon. While possible, this approach usually leads to overpaying. Here are some essential tips to help you gain an advantage:
1. **Initial Research Trip:** Make a dedicated visit to the dealership solely to explore and test drive different models. Resist the urge to buy on this first visit, no matter how tempting. Use this opportunity to gather information, then go home and research dealer costs, safety ratings, option prices, and any manufacturer-to-dealer incentives that the dealer might not readily disclose.
2. **Secure Financing First:** Before stepping foot in a dealership to buy, determine your budget by consulting with your personal banker or credit union officer. This prevents dealerships from potentially pushing you into a more expensive car than you can afford, which could lead to loan default and repossession.
3. **Verify All Calculations:** When the finance manager presents calculations, insist on seeing the detailed breakdown. Dealerships often inflate monthly payments subtly, adding a few dollars each month. Even a seemingly small increase, like $20 per month over a five-year loan, can add up to a significant amount – in this case, $500 – going directly into the dealer’s pocket. Use a financial calculator, or consult with your banker, to verify the accuracy of the calculations.
4. **Document Everything:** Keep detailed notes of all information you gather from online sources, magazines, and, most importantly, from the salesman. This practice promotes transparency and keeps everyone accountable. Salesmen are less likely to provide false information or change details later if they know you are recording everything. This tip is about maintaining control throughout the negotiation process.