DEALING WITH CAR LENDERS
Get ready. Set. Go! Once you make the decision on what would be best car for you, about one week before going out to buy the car, have your car loan in place.
Example: Fill out a car loan application at a lending institution to qualify for a loan.
Strategy #2: Talk to a lender and tell them the amount you want to borrow.
Important: Only credit unions will commit to financing a used car, even if you are not sure of make and condition of the car you want to purchase.
Danger: Do not agree to a rate without trying to bargain for lower one. Once you have researched rates and terms offered by several lenders, call them back and ask them to beat your lowest bid.
TYPE OF CONSUMERS DEALERSHIPS LOVE
Consumer A: Dealers dream of consumers who go to a dealership thinking, I will not pay more than $9,000, including trade-in for the new car. However, by thinking only about the new car’s price, you might overlook your real trade-in value, and rip yourself off in the process.
Consumer B: Being the type of consumer dealers love to outwit, such as, just like any good salesperson, car dealers look for mannerisms in consumers that will give him or her chance to make some money.
Consumer C: Dealers love the type of consumer, who goes into a dealership demanding a certain price for the trade-in, which unfortunately, could lead to a bait-and-switch tactic by the dealer. In other words, you will not get the car model you came to buy, but you will get your price you want for the trade-in. Example: Dealer might say, “I can give you $6,000 on your old car, but only if you buy this other model.”
Consumer D: Dealers adore consumers who bargain from the monthly car payment they prefer. Keep the car payment to yourself, because dealers will give you your desired monthly payment, but, in the process, you might be stuck with longer loan on the vehicle.
Consumer E: Dealers, lick their chops just thinking about the consumer who goes to dealership uninformed. If you go to a dealership with only limited knowledge about the process of financing a vehicle, you will probably fall prey to every dealer trick in the book. Do not step foot onto a car lot until you know how the games played, or suffer the financial consequences.
This series of articles on Car Financing Strategies from Jeff Burch's Money Book will continue tomorrow.