Related Item
If you're going to borrow money to buy a car, the best advice (see item #3 below) is not to borrow from the dealership. You'll get a less costly loan overall and a better interest rate from a credit union or bank. And this story about dealerships passing on finance "acquisition fees" to buyers is another good reason not to borrow from the dealer.
An acquisition fee is something the dealer pays the lender that actually finances the purchase. Some dealers are passing this fee along to buyers. Unsuspecting buyers may pay thousands of dollars more for their new cars because of this. Those thousands can turn a deal into a steal – for the dealership that is.
Original Article
Other than buying a house, a new car is one of the most expensive purchases you may make. It can be exciting and rewarding, especially if you feel like you got a bargain. It's not much fun being "taken," though.
One of the reasons people feel "taken" by car dealers is because they aren't prepared and let the dealer make the calls. You, the consumer, should be making the calls. There are many things you can do to give yourself an advantage in the car buying process.
10 Things to Do before You Buy a Car
1. Research
Research, research and then research some more:
- Look at consumer information such as Consumer Reports and Recalls.gov to see which makes and models you're interested in have had any problems
- Talk to your family members, friends, neighbors and co-workers about their experiences with the cars you're interested in
- Take test drives
- Look for information on local dealers and their prices
2. Know Your Budget
Figure out how much you can spend on a car long before you visit a dealership. Don't forget to factor into your budget the costs of:
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Insurance
- Maintenance, such as gas and regular oil changes, etc.
3. Check Your Credit Report
The vast majority of us can't pay cash for a car. Be sure to check your credit to get an idea of your chances of getting a car loan with a good interest rate. If possible, arrange financing through your bank or another lender before visiting the dealership.
4. Look for a Deal
Contact AAA or other groups for additional savings on insurance and roadside assistance, for example. Also, check Kelly Blue Book for prices to expect for used cars. Dealers offering incentives and rebates can save you a lot of money, too.
5. Call Your Agent
It's important to stay in touch with your insurance company through out the process:
- Once you have an idea of the make and model you're interested in, call your agent and ask for an estimate on how much your insurance will be
- After the deal is made, call to make sure the car is added to your policy before you drive off the lot
6. Read the Sales Contract
Yes, the sales contract is several pages long and has super-small print, but you need to read it carefully. Make sure the terms of the contract reflect the deal you made with the salesperson:
- Make sure the price in the contract is the same as the one you negotiated
- Check for a waiver or release where you agree not to sue the dealer if something goes wrong with the car
- Does the contract give you any time or a grace period where you can return the car if you're not happy with it?
7. What's Included in the Sales Price?
Don't assume that costs like license and registration fees and sales taxes are included in the sales price of the car. Usually, they're not. Try negotiating with the dealer to have it cover these costs for you. Otherwise, call your local motor vehicle agency before you make the deal to find out how much extra money you'll need to cover these costs.