Take Control: Get the best deal on your auto

It’s that time.  We all hate it, but we have to do it.  Going to the car dealership is a stressful time.  It should be fun to shop for a new or newer car but it isn’t.  It’s annoying!  But we just can’t drive an undependable car anymore.  The entire process is excessively time consuming and at the end of the day, most of us would rather be doing something else.

Here are some tips to help you lower your stress level and take some control over a situation where you may not have the best negotiating power.


  1. Save for the cash to buy a new or newer car (or at least a significant down payment). I know.  That is easier said than done.  Chances are, if you are reading this article, it’s too late to start saving.  You need that car now.  That being said, if you are buying a car, there is a certain amount of maintenance that needs to be done on a monthly and yearly basis.  Once you drive off the lot with your car, plan on setting aside $200.00 per month for a car fund.  I know that’s a lot of money!  But if you set yourself up to do this, perhaps by buying a less expensive car this time around, it will set you up for a much better financial future.  Usually, according to Consumer Reports, the most expensive year of car ownership is year 7 or 8.  If you’ve set aside $200/month for 7 or 8 years you will have about $13,000 – $15,000 set aside (assuming that some of the money has been used for oil changes and other maintenance).  At that point you can determine if it is right to do repairs on the existing car or possibly buy a newer car.
  2. Decide what the most important feature of the car is to you. Are you interested in the car with the highest reliability rating?  Or is the gas mileage more important to you?  What about the design features of the car?  Sometimes, depending on your profession, having a nice-looking car might be one of the more important features so it isn’t something that you should automatically ax off of the list just because you’re on a tighter budget.
  3. Do your homework online to select a few cars you are really interested in. Do they fit within your “most important” feature list? If not, go back to the research and find others that are in-line with the features you want. Research reviews of each to find out what their strengths and weaknesses are.
  4. Don’t know where to start your research?  If you’re like me and don’t know much about cars, start by researching your price point. What can you get in your price range?  See if any of the cars that fit into your price range also work with your most important features list.  If they do, research those first.
  5. Consider a private seller. If you are paying cash for a car, a good way to get a great bargain is to look at private sales.  You’re saving a boatload in commission fees that a dealership will toss back on your plate plus you’re saving on taxes.  Also contact your credit union and find out what steps you take to finance an auto through a private seller.
  6. If you must finance a newer car, make sure you pre-qualify for your auto loan at your credit union before walking onto the lot. If you find there’s an issue with your credit score, it’s best to know that information beforehand.  You don’t want to be manipulated during a deal into believing that your credit score isn’t good enough to obtain a better rate.  Maybe… maybe not.  But it’s good to have a second opinion and your credit union can provide a first line of defense.  Imagine walking onto a car lot and saying to the salesman, “I’m a cash buyer.  I don’t need financing.”  It puts you in a better position to get down to business and talk only about the car and the price of the car.  Most auto dealerships get kickbacks from the lenders they work with.  Those kickbacks have to be paid for somehow and it’s usually out of your pocket, by tweaking numbers here and there.  It’s best to head off any anticipation of a financed deal from the get go.  Even though you’ve obtained cash from another lender, in their eyes, you are still a cash buyer.   Your credit union pays cash to the dealer.  You get the car and then pay your credit union.  If you do explore the dealer financing options, at least you will have a bargaining chip because obviously if the dealer offers you a loan at a higher interest rate, you can decline it unless they beat the rate you already have.  Chances are, they can’t.



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