Car dealership salespeople have month-end quotas they need to meet. This can take away their negotiating leverage regarding the price of a car.
You can avoid being ripped off at a dealership by researching and preparing before shopping. Get a pre-approval, and use that as negotiating leverage.
Get Pre-Approved
Buying a car can be an overwhelming experience. It can be challenging to know what you want, your budget, and if you can afford it. Obtaining pre-approval for a car loan can assist with resolving these concerns. You can get a firm idea of how much you want to spend and what the payments will be, but also keep in mind that your actual car purchase may be slightly higher due to taxes, fees, and other add-ons that dealers often try to sneak into the final deal.
To get pre-approved, you must typically provide personal information and income documentation. This helps to set a realistic budget and empowers you when it comes time to negotiate with dealerships like Turner Chevy and other lenders. It also gives you a baseline for comparing interest rates offered by dealerships.
Negotiate the Terms
The car buying process can be lengthy, and working with a dealer’s finance department or a lender may feel like a necessary evil. Negotiating loan terms can save hundreds or thousands of dollars.
Be ready to negotiate by getting pre-approved for a loan, knowing your budget, and choosing a vehicle that fits within it. Be sure to choose a shorter loan term, saving you money on interest payments.
Be prepared to talk about add-ons, which are extra things the dealer tucks into the car sale price — these could include gap policies, window etching, or extended warranties and service contracts. Knowing the cost is essential to making an informed decision about their value.
Get a Loan from a Bank
Lenders review your credit history and financial profile as part of the loan approval process. They consider how much you owe and your debt-to-income ratio to determine whether you can make payments.
Experts recommend choosing a short-term loan to keep your monthly car payment manageable and prevent you from buying a vehicle that requires expensive repairs and maintenance. A shorter loan will also help you build equity faster, making selling or trading a vehicle easier.
Many dealerships have their financing arms and act as agents for third-party lenders. While this can be convenient, it’s often less competitive than getting pre-approved from a lender outside the dealership. Having an auto loan secured ahead of time gives you leverage when you’re negotiating with the dealership.
Get Insurance Quotes
Getting insurance quotes is important because it helps you find the right coverage for your budget. You can get car insurance quotes from a local agent, broker, or online. Online quote comparison tools can also help you quickly and easily compare rates from multiple insurers at once.
Insurance quotes can depend on your credit score, driving history, and coverage limits. For example, a full-coverage policy with collision and comprehensive coverage is usually more expensive than minimum liability insurance.
Getting an out-the-door price in writing before you go to the dealer is also a good idea. This will help you compare offers on an apples-to-apples basis and more easily catch any extra charges or add-ons that the dealership may try to sneak in.
Take a Test Drive
Taking a test drive is a crucial aspect of purchasing a car. It helps you determine if the car will be comfortable and fit your lifestyle. It can also help you spot any potential problems that may arise later on.
Be sure to take the car on a variety of roads. Try parking it, doing three-point turns, and accelerating and braking heavily when appropriate.
Bringing a friend with you when test-driving a vehicle is helpful. This will keep you sane and make focusing on what matters most easier. Also, a buddy can help you avoid getting taken advantage of by a pushy salesperson. You should also bring your license, as most dealerships will photocopy it for their records.
