Most people can’t afford to buy a car in cash. It is just too expensive. This is why the majority of people who buy new cars end up financing the purchase. This is very helpful, however; car dealerships love to add on extra services during the loan negotiations that will drive the final price of the car up dramatically. This is very bad for people, especially if they have a low budget or a poor credit history. Negotiating the car loan is just as important as negotiating the price of the vehicle.
Here are some tips to get you started:
- Don’t Rush — The finance managers at the dealership will try to rush through the loan process in hopes of confusing you and getting you to pay more than you should. They will speak quickly and make things seem like their normal. This couldn’t be further than the truth. Make sure that you stop the finance manager and let them know that you want to go over every detail. This will let them know that they can plow you over with their sales pitch.
- Negotiate Price, Not Payments — Dealerships will try to get you to tell them how much you want to pay every month for your car. Never give them an answer to this question. They will make sure to accommodate your request by inflating the price in one way or another. Always negotiate using the total cost of the vehicle and the annual percentage rate.
- Know Your Credit — It is important to know how your credit looks before you go to the dealership. Finance managers will always make you think that you have bad credit. If you know that your credit is great, or at least good, you can call their bluff and demand a better finance rate. If you need a bad credit car loan, you will be able to negotiate based on your personal situation instead of what the dealer leads you to believe. Knowledge is power.
- Be Ready To Walk — Always be ready to get up and kill the deal if a finance manager isn’t working with you. These guys have quotas to meet and will try to twist deals to work for them in any way that they can. If you show that you are ready to leave, they are more likely to get serious and work with you to come to a deal that works for both parties.
These tips are exactly what you need to know before you head into a finance office at the dealership. Whether you have good credit or need a bad credit auto loan, these tips will help you get the best price and rate available to you. Always remember that car dealerships are businesses that set out to make lots of money. They may act like they’re on your side, but they are really doing anything that they can to separate you from your money. Negotiate properly!