Jeff Watters is a business consultant & freelance author who lives in Delaware and the former manager of Mattress stores & AWAI member.
Know These Tips
I am a professional salesperson working at a new car dealer. I also sell used cars and trucks. I am at the top of my field. Very highly rated by customers on Google with a perfect score of five stars. Today I want to share with you the top tips on buying any vehicle that made me a five star professional and the same advice I give my clients locally.
Financing a Vehicle
Before you finance a vehicle, there are a couple of factors to take into consideration. The first is your credit score and the second is the interest rate. Those who have the best credit scores get the best rates. Some rate will apply to you but how do you know you are getting the appropriate rate for financing and not overcharged?
The best rates come from credit unions and banks. Not from the manufacturer or secondary lending sources or from the dealer. So the bank or credit union is the place to start. Apply for a loan before you go to a dealer and get your rate. It will give the dealer something to beat if you choose to finance at the dealership. It will also tell you how much you should pay for a car/truck regardless of what the dealer is asking.
Finding the Right New Car or Truck
Some cars/trucks look pretty slick but are they practical for your lifestyle? Affordable? The right choice? You should do a needs analysis before your search begins. Ask yourself if your family is going to grow, how much is the insurance, and what is the operating cost per year. These are important clues as to which car/truck to buy.
Once you have determined this information, you head over to the manufacturer's website, not a third-party website that is only going to sell your name and contact details to every dealer in a fifty-mile radius of your home or business. By going to the factory website, you can find rebates and incentives the dealer may not disclose. Third party providers collect your information and sell it to dealers.
Once you arrive at the manufacturer's website, you can build the vehicle you want and then locate it. Build the minimum vehicle you need. A list of all similar vehicles will be displayed there as well, so your options are not limited. Make a list of the dealers with the vehicle you want and then proceed to the dealership.
Finding the Right Used Car or Truck
Used vehicles are somewhat harder to locate. That is if you want something reliable, but the process is almost the same as finding a new car or truck. You need to start with a search engine like Google.com. Start with the most highly rated dealers. A good reputation is worth its weight in gold.
Search the inventories without leaving your information on a form. If you fill out a form, the phone calls and email will start almost immediately. Instead, call the dealer and ask questions about the car/truck you want. What is the warranty? CarFax report? Can they arrange to finance the car/truck beating your bank rate? This is how you tell the dealer you are informed and a force to be reckoned with who will not be abused.
Negotiating the Deal
Dealers use a system called a "four square." It will show you the asking price in one section, the value of your trade-in another. It will also show you the suggested down payment and monthly payments. Each section of the four square is negotiable. So ask for a lower sales price, more for your trade, less down payment if necessary, and lower payments. This is where the dealer wants you to concentrate on one section so they can get you involved in negotiating and compromise.
The dealer expects to negotiate, so believe me they "hit you hard" on the "first pencil." First focus on getting the car/truck at a lower price. Only focus here at this time, once the price goes down then go for more on your trade.
Next, we come to the down payment. This is what you are comfortable putting down, not what the dealer tells you to put down. After all, you talked to your bank, right! So why does a dealer tell you to put more money down? To cover the profit, the bank won't finance. That's why.
Finally, we come to the payments. No one likes making payments so why not make the easiest payment for you. Your choices are to lease or buy. If you trade regularly, you should lease. If you drive your car/truck till the wheels fall off then purchasing is the right decision. The better your credit, the lower the payments will be, and that is why we started with the bank, not the dealer.
To get a better deal on a new car or truck go to kbb.com and look up the USED car price of the NEW car you want to own. That is what your car will be worth when you drive it off the lot. The same is true for a used car/truck, but it has already depreciated. So the value will be more accurate.
Get GAP (Guaranteed Asset Protection) from your car and finance it in the loan. State Farm, USAA, and other finance sources will include it for free when you finance through them. Check with your bank before signing on the dotted line.
Extended warranties are marked up at nearly 100%. You can negotiate this in your contract. Don't pay full price. The cost for a new car is about $1,000, not the $1,995 they ask.
Need More Info?
Feel free to contact me through my profile above if you want good advice for free. Comment below and I will answer any question.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2017 Jeffrey Watters
Jeffrey Watters (author) from Frankford, DE on July 14, 2017:
You owe way too much to trade that vehicle. Hold on to it or sell it privately. The wholesale amount the dealer will give you is not enough to pay it off. Which means you will be financing the difference in the new loan.
Angel Guzman from Joliet, Illinois on July 11, 2017:
Great advice. I am debating whether to hold on to my 103,000 mile 2010 Nissian Altima or trade for another vehicle. I still owe $5,000 on it.