Auto Buying Tips
But many Americans make big mistakes buying cars. Take new car purchases with a trade-in. A third of buyers roll over an average of $5,000 in debt from their last car into their new loan. They're paying for a car they don't drive anymore. Ouch! That is not a winning personal finance strategy.
auto buying tips
"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.
So Reed says having that preapproval can be a valuable card to have in your hand in the car-buying game. It can help you negotiate a better rate. "The preapproval will act as a bargaining chip," he says. "If you're preapproved at 4.5%, the dealer says, 'Hey, you know, I can get you 3.5. Would you be interested?' And it's a good idea to take it, but make sure all of the terms, meaning the down payment and the length of the loan, remain the same."
So at the dealership, Reed and Van Alst both say, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you're planning to trade in another car and whether you're also looking to get a loan through the dealership. Reed says don't answer those questions! That makes the game too complicated, and you're playing against pros. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don't want to. Keep it simple. One thing at a time.
"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
NPR has a personal finance Facebook group called Your Money and Your Life. And we asked group members about car buying. Many said they were shocked by how much money some other people in the group said they were spending on cars. Patricia and Dean Raeker from Minneapolis wrote, "40 years of owning vehicles and our total transportation purchases don't even add up to the cost of one of the financed ones these folks are talking about."
Welcome to the best free car buying guide! We have been educating car buyers since 1999. We cover everything you need to know about buying new or used cars and avoiding car dealer scams. We will review key resources like TrueCar and RydeShopper.
We give you the truth that dealers don't want you to know. We level the playing field, teaching you how to get the best price on a car, while allowing for a fair dealer profit. We give you useful, easy to understand, examples of each step in the car buying process. You'll laugh, you'll cry, you'll buy a car.
You will always get more car for your money when buying pre-owned vehicles. The downside is that what you are buying has been used by somebody else and you don't know how it was cared for. Whichever you decide, your goal is to get the best deal. It's a good thing you landed here because, if you read carefully and follow our tips, you will learn everything you need to know about the process.
We'll review auto buying sites and teach you how to use them to get competing bids to keep the dealers in line. In our research, the best sites we found are TrueCar, RydeShopper, Edmunds and Cars.com. You'll learn how to calculate what dealers pay for new cars and trucks so that you can make a fair offer. You'll learn all you need to know in our new car buying guide.
Many people ask me "When is the best time to buy a new car?" The price you are able to negotiate varies depending on the time of year. Believe it or not, buying during certain parts of the month can get you a better deal. It can even depend on the launch date of a new model year. Read our tips on the best time to buy a car.
The savings reported by our visitors breaks through the $13 million mark, confirming the quality of the free car buying education you receive here. Recent visitors are reporting savings of between $2,000 and $6,000+ off of MSRP on even moderately priced vehicles.
How Much Should You Offer the Dealer?The car dealer has a right to make a profit on the sale. Our tips are designed for you to get a fair deal and not get ripped of by common scams. We show you how to find the dealer's actual cost and then make an offer that will give them a fair profit.
One of the most important tips we can offer is to get a pre-approved auto loan before you get anywhere near an auto dealership. By applying to at least one local bank, credit union, online bank, or online lender, you can get an offer that a dealer will have to meet or beat to get your business. Without an offer in hand, the seller will have no incentive to cut you a deal.
As cars, trucks, and SUVs have become more expensive, the length of auto loans has grown longer. It's easy to find lenders who will give buyers loans lasting six or more years, but it's not a good idea to have one lasting that long. You'll typically pay a higher interest rate and a significantly higher amount of total interest over the life of the loan. The longer the loan, the more likely you will owe more on the car than it is worth. You'll also have a greater chance of having costly out-of-warranty repairs while you are still making monthly car payments.
Buying a new car can be an emotional roller-coaster. Remembering that car-buying is a business transaction is critical to getting a good deal and not getting stressed out. Your sole job is to get the car you want at a good price. The salesperson's job is to maximize the amount of profit they can get from the deal. Both approaches are OK as long as everyone involved acts professionally, ethically, and legally.
Another way to get a reasonable estimate of your trade-in's value is to offer it to other dealers or used car superstores. There's nothing that says you have to sell it to the dealership you are buying your new car from, though doing so can reduce your sales tax liability.
Automakers relentlessly survey customers on their buying and service experiences. The data from those surveys are used to set bonuses awarded to dealers and their personnel, so they have become critical for dealer management to pay attention to. Indicating your responses to those surveys is dependent on any issues getting promptly resolved is a good tip for getting a favorable resolution.
Our new car rankings are frequently updated as new models arrive in the market, so you'll always know how competitors stack up against one another based on the factors buyers tell us are essential to their buying decisions. Pre-owned vehicle shoppers can also see how the cost of ownership matches up to segment rivals in our used car rankings.
Add-Ons can add great value and peace of mind to your car buying experience. While many dealers offer valuable Add-Ons and fair prices, certain dealers may overcharge for them (or even try to slip them in without the buyer noticing).
If you're buying a vehicle with less than 7,500 miles, make sure it meets these standards. Ask the seller or check the Vehicle Emissions Control Information (VECI) label in the engine compartment. If it shows the vehicle is certified for California emission standards, for sale in all 50 states, or for sale in the northeast, you may register it in Washington.
A curbstoner is a person who makes money from buying used vehicles and reselling them. They're unlicensed dealers who don't comply with state or federal laws. You have no legal protection when dealing with them.
Design characteristics are important when choosing a new car. Larger and heavier vehicles typically sustain less damage in auto crashes than small cars. Some small utility vehicles and pickups are prone to rollover accidents.
Sources:1 -can-i-save-money-auto-insurance2 -buying/10-steps-to-buying-a-new-car.html3 -secrets-getting-the-best-deal-new-car4 -shopping/buying-a-car-why-you-shouldnt-focus-on-the-monthly-payment-242019
Auto dealers may promise consumers "spot delivery" of a new or used car when its sale is contingent upon financing. This sales technique encourages consumers who have made a down payment -- but who have not yet been approved for financing -- to drive away from the dealer's lot in a new or used car before financing is approved. NOTE: The consumer who is unable to secure financing is entitled to receive his or her down payment back pursuant to the Consumer Fraud Act. NOTE: The Three-Day-Right-to-Cancel Law does not apply to an auto purchase, and Illinois Lemon Law applies only to new cars, not used car sales or leases. Leasing The Attorney General was instrumental in passing Illinois' new Motor Vehicle Consumer Lessee Protection Act, which requires dealers to disclose a vehicle's capitalized cost, capitalized cost reduction, and residual value. This law requires dealers to give consumers lease samples for comparison shopping before entering into a lease, and to return consumer's down payments or trade-ins if consumers opt not to enter into a lease. All aspects of a lease are negotiable. Do not just focus on monthly payments. Consumers most commonly complain, that they were switched from a purchase to a lease without consent; the dealer did not disclose a vehicles capitalized cost; or the dealer did not deduct trade-in value from capitalized cost. NOTE: Capitalized cost is ONE factor used to calculate monthly lease payments and represents a vehicle's total price. In addition to price and other factors, capitalized cost may include: taxes, registration, license, acquisition, administration, assignment, and other fees 041b061a72