It’s safe to say that most Americans loathe car shopping. It takes forever, many people feel like they are taken advantage of while car shopping, and negotiating can be stressful. While buying a new car is exciting, the process of actually making that purchase is anything but.
The best way to make the process of buying a vehicle smoother is to go into the transaction fully prepared. Knowing what you want, how much you want to pay, and what your trade-in (if you have one) is worth will help set you up for success. Read on for a few of our pro tips for buying your next car.
1. Don’t Reveal Your Hand Too Early
When you go to the dealership, your salesperson will probably ask you whether you have a trade-in and what monthly payment you are looking for. Don’t answer these questions right away.
When you reveal your hand too early, salespeople can use that information to their advantage. For example, you may negotiate a price with them and then they lowball you on your trade-in to make up for any price reductions they gave you.
Or, you tell them you want a certain monthly payment and they give it to you, but make it a seven-year loan. While your monthly payment may be where you want it, you’ll actually end up spending much more over the life of the loan as your interest costs are significantly higher than if you financed for five years.
2. Knowledge Is Power
Before heading to a dealership, do your research. If you are trading in a car, look around to get a ballpark of what your car is worth. You can get an idea of the value of your trade-in online for free through Kelley Blue Book, Edmunds.com, or NADA.
You should also know the price of the car you want. If you are buying a new car, figure out the invoice price, which is the price the dealership paid. You want this price to negotiate with, not the MSRP (which is the marked-up price that you might see on the window of the car).
You should also know the average resale price if you are buying a used car. This information is very valuable during negotiations. One thing to always remember is that this knowledge gives you power, and if you aren’t getting what you want, don’t be afraid to walk away.
Car dealers are always trying to improve their car sales prospecting, so use the information they put online to learn more about the car you want to buy.
3. Get Preapproved for Financing
Don’t set foot in a car dealership without getting pre-approved for a car loan. This will give you an idea of your credit score, what kind of interest rate you can get, and also give you bargaining power. Many times a car dealership will offer you financing but will increase the interest cost to make more off of your loan.
If you know what you can get on your own, you’ll know what’s a good offer from the dealership.
Buying a Vehicle Doesn’t Have to Be Stressful
Don’t let buying a vehicle stress you out. Instead, keep it exciting by using our vehicle buying tips. Buying a new car should be a fun time, not one to dread.
If you found these tips helpful, be sure to check out some of our other articles before you go.