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Money Matters Blog

Monday, June 17, 2013

Be Prepared for Your Next Car Shopping Experience

Shopping for a new car can be a pain.  If this is your first time buying a car, the whole process can be a little intimidating.  From haggling with the dreaded salesman to the hours of paperwork, buying a car is often far from being a walk in the park. 

During your search, it can be tempting to jump on the first deal that looks good, but in the end, you’ll feel much better about your purchase if you do your homework first.  Some people spend hours online searching for cars sold by owners while others head straight for the dealership.  However you choose to car shop, it’s important to be prepared.

Here are tips for making sure you get a good deal:

Decide what you want: Are you looking for a family car or economy car?  Are you free to spend what you want or are you on a budget?  It’s important to know exactly what you’re looking for and what your budget is before heading to the dealership to avoid impulse and pressured purchases.  

Always shop around (especially online): Many buyers head straight to one dealership and choose from the cars on display without checking prices at other area dealerships. If you have time, don’t be afraid to shop around. You can also use visit our Auto Loan Resource Center for tools, resources and information you can use in the bargaining process.

Find the invoice price: It helps to know what the dealer paid for the car in question to see whether or not you’re getting a good deal. Obtaining the invoice price (what the dealer paid for the car) has long been difficult, but it can be found on Edmunds.  

Avoid the monthly payment trick: Discuss the total amount you want to pay for the car, not your preferred monthly payment. Dealers prefer to deal with the monthly payment because they can manipulate the interest rate to give you the monthly payment you want, but you end up paying more for the car in the long run.

Be careful with the upsell: Many salespeople will try to get you to add on plans such as roadside assistance and warranties at the end of the buying process that may not be worth what you’re paying. If you ever feel pressured to buy, relax, and take some more time before making a decision.  The salesperson may be disappointed that they didn’t get you to sign right away but that shouldn’t be your concern.  Remember, at this point, you don’t owe them anything. You are choosing to give them your business.

Take advantage of low loan rates: Get pre-approved before going to the dealership. Dealers want you to finance with them and many times will offer you a rate that is much higher than you need to pay.  Auto loan rates are lower than ever, as low as 1.24% APR, at Community Financial but they won’t stay that way for long. These special rates expire on June 29.  Visit our website for more information about the current auto loan special.

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