Disclosure: This is a sponsored post. All opinions are 100% my own.
Ah, the dreaded vehicle purchase. Maybe the little people in your life have demanded the necessity of a new vehicle, maybe your old vehicle is nearing end of life, or maybe it’s just time for an upgrade. Whatever the reason, buying a new vehicle can be a stressful affair what with budget, option, and pushy dealership salesperson considerations.
Having a professional background in auto finance, I’ve learned quite a bit about what and what not to do when shopping for a new car. Having young children in my vehicle every day has taught me a bit more. And now I’d like to share 7 of these tips with you.
Do your homework.
Never, and I repeat, NEVER go to a car dealership cold. It’s akin to going grocery shopping while hungry. You don’t know quite what you want, but you do know that you’re itching for something – and will likely end up with something far beyond what your needs (and budget) require. Instead, consider beforehand what you’re looking for and make a list of your priorities. Do you need more space for kiddos? Better gas mileage for commuting? Write down your budget (entire cost of vehicle vs. monthly payment amount) and then list out your needs followed by your wants. Then consult cars.com, an excellent online resource that will provide you information on makes, models, options, pricing, and – best of all – customer reviews. Use this resource to narrow your vehicle options down to 1-3 that fit your budget and option criteria.
Consider a used car.
I know, I know, it’s not as sexy as a shiny brand new vehicle. But if you can get past that, you can purchase a certified used vehicle for up to 20%-30% less. Remember that a vehicle depreciates up to 10% just DRIVING IT OFF THE LOT. Why not have someone else pay that depreciation, while you still get the benefit of a newer tested and reliable vehicle?
Get your finances in order.
Are you planning to trade in another vehicle towards your down payment? Consult Kelley Blue Book to determine exactly what dollar amount is equitable for that trade. Will you require financing? Contact your bank or credit union to obtain pre-approval for financing upfront (lest you fall victim to dealership financing managers placing you into contracts that may come with much higher interest rates – with financial incentives to them). Shop rates – don’t assume that your primary bank or credit union has the best ones. Look around until you find a rate and term you’re comfortable with.
Go in with a plan.
It’s best to find out if a particular dealership has the vehicle model you’re interested in even before you walk through the door. Know what you’re willing to offer, what you’re willing to accept for a trade-in, and what your bottom line is (the amount you will not go above). Understand that you may have to walk away from your dream car if the salesperson cannot meet your terms.
Prioritize total cost of vehicle above monthly payment.
A common tactic used by vehicle sales people is to try to sell you on a monthly payment amount. “What’s your monthly budget?” they will ask. Steer away from this and instead redirect the conversation to a total vehicle cost. You should already have financing in place so will already know what your projected monthly payment amount would be. You’re more concerned now with total vehicle cost under your pre-approved financing terms vs. inflated monthly costs that may go on for 60 or even 72+ months (try to always stick with a 48 month or less contract term if possible).
Ask questions.
Don’t take everything the salesperson says at face value. Remember that their goal is to sell you the vehicle at whatever cost. Ask questions. Take a test drive. Find out about warranties. Ask more questions. Inspect the vehicle for visual damage or dents. And use all this as a negotiating tactic to drive towards a price that is fair.
Make the deal!
If you’ve done your homework, this should be a relatively smooth process. Sign the paperwork, collect the keys, and drive home in your new (or certified used) vehicle!
