- CASH IS KING
You have probably heard this expression. If you subscribe to it, you might believe that offering a dealership a cash offer is going to get you a great deal. The fact is just the opposite. Dealerships make money on the financing as well as the sale of the car. Paying cash is not going to get you a better deal and in fact might limit the discounts the dealer may be willing to give you.
If you really want to pay cash a better option might be to finance the vehicle and then pay it off completely on the first payment. The dealer may be willing to discount your deal because they think they can make money on the back end. They do not need to know that you intend to pay it off immediately.
- YOU MUST ACT NOW TO GET A DEAL
In most cases, this is just not true. Dealers like to give you a reason to pull the trigger right away but most of the time, that deal will still be there in a few weeks or even a few months, in many cases. The only real exception to this is an occasional massive manufacturer rebate. Sometimes an end of year rebate, for example, will disappear in a few days.
In most cases, you will not lose the deal if you do not buy now. In many cases, you might even get a better deal by being patient. You might get a call in a day or two with a better offer on the vehicle or perhaps more money on your trade.
- YOU SHOULD BRING YOUR OWN FINANCING
You might think that having financing pre-arranged is a good thing but it makes you the same as a cash buyer. The dealer then knows that they will not make any money on the back end and will be less likely to discount the vehicle as much as they would for someone financing in house.
If you really want to use your own financing, it may be best to use the dealers finance department first. You can then refinance the vehicle through your lender before any payments are due. This will give you the best chance at a good price and still allow you to use your financing.
- A LOW PAYMENT IS WHAT IS IMPORTANT
Not always the case. Dealers can manipulate a lot of things to get you a low payment. The usual way is to extend your payments for an additional year or two. Others might give you a large bumper payment at the end. On leases, you could be saddled with a very low mileage limit. All of these things will cost you in the end.
You need to look at all of the details. Do not let the dealer simply try to get you the payment you want. Look at the price you are paying, the interest rate, the loan term and finally the payment.
- YOU SHOULD NOT MENTION YOUR TRADE UNTIL THE LAST MINUTE
Do you think you are the first person to come up with this idea? No, dealers are used to it. The only thing this really accomplishes is delaying the process. It can add several hours to the end of a deal waiting on your vehicle to be appraised.
What you should do is know exactly what your vehicle is worth. Be honest with yourself about the condition and look at the blue book value online. Also look at the used car lot of the dealership and see what they are selling similar vehicles for. This can give you an idea of what really is a fair price for your trade.
- USED CARS ARE ALWAYS A BETTER DEAL
This is sometimes the case, but not always. A used vehicle will not have manufacturer rebates and will cost you more in financing. Finance rates are higher on used vehicles and there are no manufacturer promotional finance rates on used vehicles either. You must also consider the cost of future maintenance if the vehicle has a warranty that is expiring or none at all.
Before committing to a used vehicle, do your research. If it is one or two year olds, price a new model and see what the cost difference might be including all rebates. Also consider the extra cost of financing. You could wind up spending thousands extra on finance charges for a used vehicle so you must consider that.
Still want a used car. We can get you a quote for installment loans of $1000 or more.
- YOU CAN OUT NEGOTIATE THE DEALER
Many people think they are smooth negotiators and they may be but experience is king. The dealers sell thousands of vehicles and you have bought maybe what 4 or 5, maybe a few more. You can not possibly have the experience to out negotiate the dealer on their turf. They will almost always get the upper hand because the odds are tilted in their favor.
What you should do it be prepared. Know what your trade is worth and do your research and see what the car you are looking for is really worth. The dealership will always make money but you can do your best to keep as much in your pocket as possible.
- YOU WILL GET A BETTER DEAL ON A RAINY DAY
Not true, the dealership will use all of the same tactics on a rainy day. It probably will not even be much slower than on a regular day. Why? For two reasons. One, lots of people try to use this method in a failed attempt to get a better deal. And two, most people have set aside time to go shop for a vehicle, rain or shine.
Just shop whenever it is convenient to you to do so. Knowing that the rain will not help the sale, you might as well choose a nice day. It will make the test drive more pleasant at least.
- Your Dealer Is Giving You All Available Rebates
The truth is that most dealers only deal with manufacturers and finance company rebates. They do not know and do not investigate other possible rebates.
You might, for example. have a rebate that you can use from your wholesale club membership or from your insurance company. USAA is a prime example, they offer rebates on new car sales. Investigate additional rebates before you go to the dealer for the best deal.
8 Car Buying Myths
Looking for a new vehicle? Car shopping can be exciting but it can also be a major hassle. If you do not know all of the ins and outs, you can really get taken advantage of. So, before taking out your next auto loan, take a minute and learn about the top 8 myths of car buying.