8. Negotiate the Price
Both dealerships and private sellers expect you to haggle over the price of the car. You’ll have more wiggle room with a used car, since it doesn’t have a set MSRP (manufacturer’s suggested retail price). Even with a new car, you can generally negotiate your way to a significant savings off the sticker price.
To drive a hard bargain, find out how much the car is worth by researching its value on automotive websites. Be sure to take into consideration any “extras” the car has, such as leather seats or a top-of-the-line entertainment system. When you arrive at an estimated average price, take 10% to 20% off that figure and make the seller an offer. You’ll have more leverage if you are preapproved for a loan or if you’re paying in cash.
Timing can help you get a better deal too. If you’re buying new and don’t need the car right away, try waiting until the last few months of the year to go shopping. That’s when dealerships typically offer special incentives such as cash back or promotional 0% APR financing so they can clear cars off the lot to make way for next year’s models. Can’t wait that long? If you can hold out until the end of the month, salespeople eager to make their monthly sales quotas are often quite willing to bargain.
9. Read the Contract Carefully
Buying a car can be a lengthy and stressful process. By the time you have a contract in hand, you’re probably so eager to get behind the wheel that you’re ready to sign the contract without even glancing at it. Unscrupulous car dealers count on this and may pad contracts with extra charges you never agreed to or change the terms you discussed.
When you sign a contract, you’re entering into a legal agreement with the seller—and once you put your name on the dotted line, it’s often very difficult or impossible to renege (and if you can, you’ll almost certainly pay a fee). Whether you’re buying from a dealer or a private party, take as much time as you need to read the contract in full before you sign. Don’t be shy about asking questions or calling a trusted friend or advisor if there’s anything you don’t understand.
10. Enjoy Your New Car
Congratulations—you’re a car owner! Buying your first car may be the first major purchase you ever make. There’s a lot to consider, but following the simple steps above can help ease the stress. With some careful budgeting, research and planning, you’ll have the confidence to negotiate the best deal and get the car of your dreams without getting taken for a ride.
Writer: Karen Axelton
Date: March 25,2020
Photo Credit: experian