Buying A New (or new to you) Car
Ask Gabby is a series answering questions that I have received from friends. If you have a question about how to be more financially savvy or just need budgeting, saving or couponing tips you can just ask, me — Gabby! Find me on Facebook and use the handy Ask Gabby tab, use #AskGabby on Twitter, or email me at GetYourWorthOn@gmail.com.
Question
Gabby — I’m in the market for a new (or new to me) car. I’ve saved a little extra cash for a down payment but what should I do next? I have heard that buying a new car can be a nightmare — I start to panic just thinking about all the decisions. Do you have any tips to prepare me for the experience?
Answer
These days everyone needs reliable transportation. It’s exciting to think about getting a new car but the car buying experience can be exhausting. Here are a few tips that will help simplify the whole process.
Look first — I know it can be hard ladies but go shopping without intending to buy. Look around on the car lots to see what type of car you are interested in. If approached by a salesman tell him you are only looking and will not be buying anything for awhile. Most dealerships are closed on Sundays so you can check out the inventory without even being questioned by a salesman.
Shop online — It is true; you can buy anything on the internet these days! Look up different car dealer websites and see what they have in stock. Most dealers will price the cars as low as they can on their websites to get you to come see them. If you do see something you like, print out the auto information and take it with you when you go to test drive the car. The sticker price is usually much higher on the car lot so let the salesman know you found the car over the internet and what the price was listed as.
Know your worth — Before you go to negotiate the price of the car be sure you know all the facts. You can find online invoices for almost any car now days. The invoice price is what the dealer paid for the car. Look up the invoice for the vehicle you are interested in with the options you want. Research any rebates or manufacture discounts that are being offered and deduct those amounts from the invoice price. Be sure you know your credit score ahead of time as well. Check your local credit union to see what interest rates are being offered. Write the rates you qualify for down and take everything with you to the dealership. This way you will know what you are worth and get the best sales price and interest rate available.
Sales price, trade in and financing are 3 separate deals — To get the best deal possible you have to break the entire transaction down into 3 separate deals. Knowing the invoice price will help in the bargaining process on the sale price of the car. Knowing what your current car is worth will assure you get the best price on your trade in. Knowing the interest rates you qualify for will help get the best finance deal available. If you take your time going over each of these items as separate deals you are guaranteed to maximize your savings!
Watch out for fees — Never sign anything until you have looked over all the documents and verified the numbers are what you previously settled on. Don’t be shocked to see additional fees on the sales contract but be sure they are not too extreme. Normal fees you should expect to pay are sales tax, a destination charge, title and registration fees, and a modest documentation fee ($50 to $100 is reasonable). Additional fees like advertising charges, dealer prep fees, rust-proofing, window VIN etching, fabric protection and paint sealant are unnecessary fees that don’t have to be pushed on to the customer. Feel free to push back on these, or at least demand a further break on the price of the car.
Be ready to walk away — Test driving a new car is always exciting. There is something about that new car smell that is mesmerizing! But never let the salesman know you have an emotional attachment to the car. Always be willing to walk away from a sale. It’s all a numbers game so stand firm in the price you want to pay. A good salesman would rather lose a few hundred bucks before letting the whole sale walk out the door.
Buying a new car doesn’t have to be a nightmare. It should be more like a daydream come true. So don’t let a bad experience weigh you down. Keep these tips handy and you will get the car of your dreams for a price and finance amount that fits your budget!
Savings Tip: Check Fort Worth Community Credit Union for the lowest auto loan rates in town — www.ftwccu.org.
