There are three main steps to buying a car – Financing, Research and the Dealership.
Step 1: Financing.
Before searching for a vehicle, know the amount you want to spend and get approved for an auto loan for that amount. There are several ways to get preapproved: 1) Apply with your financial institution. Banks usually base approval on your FICO score and have higher interest rates. Credit unions usually have better rates, friendlier service and most CUs base approvals on their internal score, which encompasses your FICO, debt ratio, delinquency rate and monthly income. 2) Most dealers have their own financing and usually base approval on your FICO score.
In addition, understand your payment parameters since you’re financing a monthly payment. Figure out what your budget allows on a monthly basis and be sure you’re willing to make that payment for at least 4 to 5 years.
If you decide to lease the vehicle, the monthly payments will be lower however after the lease term is over, you do not own the car and there is a residual (lump sum) to be paid or finance if you choose to buy the car. In addition, all leases have mileage stipulations and if you go over the mileage limit, you’ll have to pay a per mile penalty.
Step 2: Research.
Take the time to research the vehicles you have in mind. Factor in your “needs” and “wants”. Don’t assume your vehicle has a feature you need and/or want, check it out for yourself. To research the vehicle’s features, visit the manufacturer’s website. Also check out independent tests and rankings for the vehicle in mind. Well-known sites include Consumer Reports (www.consumerreports.org), Motor Trends (www.motortrend.com) and JD Powers (www.jdpower.com/cc/auto/index/jsp).
When researching, you want to know other factors that will affect the price of the car as well as your monthly payments.
Additional accessories for the car – The more features you want on the vehicle, the higher the purchase price will be.
Trade-ins – If you trade in your current vehicle with the same dealership you’re purchasing the car from, do not let them know until they have given you a price for the vehicle you’re purchasing. The dealer will try to lower the amount of your trade to make up for the “great” price they’re giving you on your new vehicle.
New or pre-owned – With some makes, the resell value can be similar to a newer model. Compare prices with a new and used model when looking for a particular car.
Step 3: The Dealership.
To avoid headaches and the chance of being hassled into a car you don’t want, determine the exact vehicle you want before going to the dealer. This includes knowing the interior/exterior color as well as options and/or features you want. If you’re not willing to settle, don’t! Dealers are able to trade with other dealers for your specific car. Know the invoice price and MSRP, and which one you will be paying for. Dealers will add the salesperson’s commission into this price, so always compare prices with other dealers.
When you’re at the dealership, do not feel obligated to finance with the dealer. However, most dealers will still need to approve you with their finance company to ensure you can pay for the car just in case your financial institution decides not to. Some dealers will accept a preapproval letter from your financial institution to avoid preapproving you through their own finance company.
When you decide to purchase the car, check the fine print on the purchase order and do not sign unless you are 100% comfortable with the information. Also, get a due bill for outstanding items and do not sign the purchase order unless you’re willing to pay for outstanding debts on the vehicle.
For pre-owned vehicles, ask for a car fax report to check for any reported accidents on the vehicle. If the dealer is not willing to provide a car fax report, ask for the vehicle’s VIN (vehicle identification number) and purchase a carfax report at www.carfax.com.
Always remember, your biggest bargaining chip is that you can always walk away and start over with another dealer.
There is an easier way…
Auto Expert is a personal shopper from beginning to end, and everything in between. They will assist you in researching, financing and delivering the vehicle to you. They also deal directly with the management of the dealership, removing the salesperson’s commission.
In addition, Auto Expert works with a selection of dealerships throughout Southern California, so their inventory is endless. Another bonus, Auto Expert has separate trade-in vendors who bid on your trade. This allows for a fair appraisal without influencing the purchase price of your new vehicle.
For more information about our service, visit us online at http://www.autoexpertonline.com/ or call us toll free at 1-800-359-4567.