Shopping for a new car is an exciting experience, but it’s also one that loses a lot of its luster when it comes time to start negotiating a price and getting a loan. It is often that part of the equation that makes people dread heading to the showroom, but with a little bit of knowledge, you can make the experience that much easier. Read on to discover three pretty simple tips that will make your car buying experience a pleasant one, whilst also leaving you with a loan that you can reasonably afford.
If you have never gone shopping for a new car before, you probably don’t realize how easy it is to get carried away at the car lot. That sensible car you had in mind when you left the home can quickly become an overpriced nightmare if you don’t stick to your guns. It’s the job of the salesperson at the dealership to get you into as expensive a car as possible, and they are good at getting that job done. The easiest way to avoid all that is to secure a car loan before you start to shop. Your ban will loan you an amount that they are comfortable you will be able to pay back, whilst also giving you a decent interest rate. Going that route leaves you knowing exactly how much you have to spend, which in turn will stop you from making a bad financial decision.
Even when you do the right thing and choose an affordable car, you can still end up paying a lot more if you aren’t careful. The dealership basically acts as the middle man when you try and secure financing at the lot. They will help you track down a lender, but that often means paying a higher interest rate so that the dealership can get their cut of the deal. They will also oftentimes try to sneak things like extended warranties and other little nuggets into the paperwork, all of which will add to your bottom line. Read through each line of the paperwork carefully to ensure that you are not getting something you don’t really want.
Another situation you need to be on the lookout for is when a dealership allows you to drive the car you want off of the lot BEFORE financing has been finalized. This isn’t something that happens often, but a dealer will often allow you to take the car, confident that they will be able to get you financing on the terms that suit you.
The problem is that there is no guarantee of finding that financing, which often leads to them calling you a few days later to inform that the higher interest rate you were actually approved for means that your monthly payments will go up, oftentimes out of your budget.