Tricks To Buying A New Car
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.
tricks to buying a new car
"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."
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If you are getting your financing at the dealership, it is important to remember their primary focus is selling you the car. Using tricks like getting you into car loans that are way too long is just a way to sell more cars.
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.
If you're looking to find the right car for you, these tips for buying a new car may be helpful. The goal is to find one that not only fits your lifestyle but also your budget. Whether it's a fuel-efficient commuter car, a rugged off-road SUV, or a luxury sedan, here are a few tips for buying a new car.
No matter how good a car looks on paper, you need to drive it to know if it's right for you. Schedule a test-drive when you have plenty of time to carefully consider the car you're thinking of buying. Make sure the drive includes the kinds of driving you do in a typical day, whether that's cruising the highway or managing downtown traffic.
Never be pressured into buying a car before you're absolutely positive it's the right car for you. Consider sleeping on it before you make a final decision because the car will likely be there in the morning. If it's not, a good dealership, whether online or in person, will help you find another car that's right for you.
Plan out buying a new car to avoid making common mistakes that result in excess debt (like rolling over the loan balance on your current car to your new loan or telling the dealer you need financing before picking out your car.)
Preparedness is key before walking into a dealership is the message in their advice on what car buyers should be doing ahead of time. When it comes to buying a new car, you will learn from the insiders:
Once again, preparedness is key; however, there are also special considerations to factor in when looking at buying a used car that are not as germane when shopping for a new car. Here are some of the tips and tricks you will learn from The Car Cate Nut video when it comes to shopping for a used car:
Both dealership insiders offered some sound car buying advice at the end of the video by pointing out that (1) as a customer, you have to be sure that you are the one in control when it comes to buying a new or used car; and, (2) that if you can, it is best to wait out the current car shortage as this is only a temporary problem and that you can expect availability of models to rise and prices will eventually lower at the same time.
Getting preapproved for an auto loan before you walk into a dealership, or visiting a private seller can be a good idea. Whether you work with your bank or an online lender, getting preapproved can help you stay within your budget when buying a car. Plus, you can shop around for a reasonable interest rate.
Your credit score helps determine the interest rate you pay on a car loan. Better credit may help get you a more favorable interest rate, which in turn will have an impact on your car-buying budget. You may be able to get your credit score for free through your credit card provider.
With prices so high, shoppers also need to keep a close eye on their budget. "There is no point in test driving a car if it turns out you can't afford it," said Tom McParland, who runs the vehicle-buying service Automatch Consulting and writes about consumer issues and the automotive industry for Jalopnik.
The Covid pandemic has muted depreciation, however, and prices for used cars are growing faster than for new. As the price gap narrows, buying new becomes more appealing because the vehicles are in better condition, plus, they have a full warranty and can be financed at a lower rate.
If you're in the market for a new car, you have probably heard a number of tips and advice on how to buy. However, much of the common wisdom you might know on buying a new car might be more myth than reality.
The problem with this advice is that it's only accurate if the dealership is trying to meet a quota and is short. However, you have no way of knowing this upon going in. If they've already met their quota earlier in the month, then buying at the end of the month will be no different from buying on any other day.
Buying a car is something we will all have to do at some point in our lives. And yes, it can be a stress-inducing experience. However, at DARCARS Toyota of Silver Spring, we've put together some Car Buying Tips & Tricks to help drivers in Silver Spring and the surrounding areas save money, get the best deal, and decrease the stress that comes with buying a new Toyota or used car. If you have any questions about any of our models or financing options, please contact us today!
If your current car is in good to fair working condition, we can help! Make use of our Estimate Your Trade online tool and input your vehicle's information. We will let you know the worth of your car and how much money you'll save on your future car, truck, or SUV's down payment, making the car buying process that much more convenient for our drivers in Silver Spring, College Park, and beyond.
Are you familiar with our certified pre-owned program? If that's not the case, you're in luck! Buying CPO vehicles is an excellent choice because you'll have access to a variety of secondhand cars that are professionally renovated to like-new condition. Our certified Toyota service center performs a multi-point examination on these vehicles to provide the highest quality without the high cost of a new car. To get started, look through our certified pre-owned inventory today and get started on the car buying process! 041b061a72