Financing a new vehicle can be stressful and frustrating. If you don’t go into the process prepared, your dream car can turn into an expensive nightmare.
Get a Preapproved Auto Loan
It can be an expensive mistake to get financing at the dealership. Instead, get preapproved for an auto loan before you head to the dealer. Getting preapproved can help you set realistic expectations about what you can afford to spend. Plus, you’ll have more negotiating power. It’s basically like pre-negotiating the price, rate, and term of your new vehicle. Once your preapproval is processed, your financial institution will provide you with a check to take to the dealership. Imagine walking into the dealership with complete peace of mind. Now that’s a power move.
Maximize your Trade-In
Trading in a vehicle at the time of buying a new one is convenient but could cost you money in the long run. Often dealers will pay less than what your car is worth. To get you a better idea of what the vehicle is worth, do a quick search on KelleyBlueBook.com for the make, model, and year of your current vehicle. Then, you can negotiate the highest possible price.
You may also consider selling your trade-in vehicle to a used car dealership or a private party to get your money’s worth.
Negotiate a Great Price
It’s easy to get confused, so go slow and even write down the numbers thrown at you. Make sure you know the total cost of the vehicle, including all taxes and fees. It’s also a good idea to ask for a breakdown of the charges before you agree to any deal. Some dealers may include bogus fees.
If you have a preapproved loan, you’re a cash buyer, and you should negotiate the out-the-door price of the vehicle, not the monthly payment. If the deal isn’t progressing in your favor, walk out of the dealership. No goodbyes are necessary.
Close the Deal
If the price, financing, and fees look right, it's time to say yes to the deal. Here, you'll sign the contract and purchase any of the additional products, such as an extended warranty. Buying an extended car warranty at the right price can be a smart decision. But check first to see how much warranty is included with the cost of your new car.
After you’ve done your research, feel free to get behind the wheel and hit the gas.