Your old car took its last breath and conked off. You’re visiting all the car dealerships and you’re looking for the best deal. Not a lot of people can just walk into a car dealership and afford to purchase a car straight away. Many of us need to get our financing and car loan organized to see within what range we can afford to purchase a car.
If you don’t have your financing all sorted out, you may have to apply for financing from the dealership itself.
You know what this means. The salesperson and the manager of the car dealership will try to get you to buy more services and additional features from them. You’ll hear convincing arguments and sales pitches about how that feature will be perfect for you – and how your life will be easier just by adding that one small feature to your car. Of course, only for a few dollars extra per month. The small amounts all add up when you end up paying for your car – and this post is going to tell you how to negotiate car loans so you come off on a better position while purchasing a new or used car form the dealership.
- Never agree to the first price they ask
Everything is negotiable. Car salespersons use very clever tactics of not revealing the actual car payments. They may word their questions like this. “How much are you looking to spend for your car?” or “What are you looking for your monthly payments to be?” These are tricky questions that leave you paying for more than you bargained for. They do this to see if they can base a price based on the amount you’re willing to pay monthly instead of the actual price. Negotiate the price.
- Obtain short term loans
A car is an asset that depreciates rapidly in value over the years. With new cars being released each year, you don’t want to end up paying for your car for more than five years because that’s just dropping money into a big, black hole. Car Dealerships will offer you lower monthly payments just by increasing the number of years on your car loan. You’ll also end up paying a lot more than what you could’ve purchased the car if you took a short term loan.
- Don’t go for the extras
Car dealerships will try to convince you to buy the extra add-ons and aftermarket items which are not essential and will raise your monthly payments considerably. These include rust proofing, gap insurance, extended warranties, car alarms and many more. They are useful but remember you’ll be paying more at a dealership. Shop around and look for better deals elsewhere.
- Don’t agree to high interest loans
No matter what your credit rating is, don’t agree to a deal which carries high interest rates.
- Use your head, not your heart while purchasing a car
It’s easy to get carried away with how beautiful it looks and what great features it has. Once you take it for a spin, you’ll probably fall in love with the car a lot more but you should be prepared to drop the deal if the car dealership is not willing to negotiate on the price. They are not doing you a favour; you are spending your hard earned money for the car. Don’t act rashly and regret your decision later.