A majority of people are forced to finance their car purchase because they do not have enough cash to pay for the purchase outright. If you are in the process of buying a new car, it is very important to walk onto the car lot prepared. With so many different variables to consider when you are negotiating your purchase, buying a car can become so overwhelming that you decide to go with a contract where you will owe more than the vehicle is worth throughout the entire loan term. To prevent this from happening, follow these steps and get the best deal on the car you have always dreamed of owning.
Shop the Rates Before You Visit the Dealer
Many people think that the dealer will give them the best financing rates when they are buying a car. While the dealer does offer negotiable rates, you should always shop the current auto finance rates before you even step foot on the lot. Contact the bank you have been banking with for years and ask the lender to pre-qualify you for a loan. By running your credit score, the lender can tell you how much your interest will be based on the year of the car and the length of the term. If you walk onto the lot knowing the best deal you can get elsewhere, it will give you bargaining power.
Make Sure You Negotiate More Than Just Price
Many people assume that the only thing that can be negotiated is the price of the vehicle. Car dealers have a lot of bargaining room and the ideal customer is the customer that does not know that finance rates can be negotiated as well. One of the problems is that when you want to talk down the price of the vehicle, the dealer will often raise the interest rate. This is why walking onto the lot can benefit you. You can compare finance rates, negotiate the price of the vehicle, and then use your own financing in the end to get the best deal. It might sound sneaky but it is an excellent way to keep your interest low and get the best deal on your vehicle.
Buying a car is one of the larger purchases you will make in your lifetime. When you are going to be committed to a 4 to 6 year loan, you need to make sure that you choose the best loan possible. Choose a simple interest loan, pay down the principal each month, and pay off your vehicle early to save.