Three Steps to Save You $3,000
According to credit.com you can save up to $3,00 when you buy a car by using these three steps:
1. Credit Check
Not checking your credit before you start shopping for a car is a huge mistake. Because your auto loan rates are directly tied to your credit scores, even a small inaccuracy on your credit report could cost you. Before you start shopping for your dream car, take an hour to check all three of your credit reports and credit scores online. You need to check all three credit bureaus because you don’t know which one a lender will use for your application. If you have a credit score above 750, you can probably qualify for the best rates available and negotiate an excellent deal on your car. If your credit score is lower, see if you can’t give it a boost before you apply for a loan.
2. Shop Online
Unless you have a perfect credit score in the 800’s and can qualify for a 0% offer, you are probably not going to get a good deal on a loan directly from the dealership. Auto loan rates and fees offered by online auto lenders are usually a lot lower than the rates offered by a dealership’s financing program.
Plus, you can shop and compare rates online without causing damaging inquiries to your credit report. Most online lenders have calculators or rate guides that show you what rate you could receive based upon your credit score.
With an online loan, you fill out the application and receive an approval by email within a few hours. Then the lender mails you a check that is ready to be made out to the person or business selling the car. If you end up not buying a car or not using the loan, you simply toss the check (shredding it first of course). Plus, the check from the lender usually specifies a certain price range (for example, $9,000-$10,000). This leaves you with some room for negotiating a lower price with the seller even after you have received your loan approval.
3. Negotiate the Price
According to the book Women Don’t Ask, women are willing to pay $1,353 more just in order to avoid negotiating the price of a car with a salesperson. That’s a lot of lost money, especially if you are financing the car with a long auto loan. Luckily, the internet makes negotiating with car dealers a whole lot easier. Before you start shopping, look up the listed price, invoice, and MSRP of the car you want through an unbiased site like Kelley Blue Book and request free price quotes online. Armed with these facts, you’ll have an advantage over the salesperson when you start the negotiations. You should be able to save a couple hundred dollars, if not a few thousands, by negotiating with the car salesperson before you decide to buy.
You simply have to be able say 'no, thanks at that price' at least once to the dealer. This gives them a strong message that you are serious about your research.
You should also bring a piece of paper to the dealership and make sure you do all the math of the finance calculations yourself. The point is not that they will do the math wrong. The point is you will see exactly how the deal is structured. Do not be afraid to take the time to do this or look like a fool for mapping out your car deal in the dealership.
My dad swears by this process, http://tinyurl.com/knflt6
Posted by: Jude | June 16, 2009 at 11:28 AM