Not everyone enjoys the car buying experience. Salespeople can often be high-pressure personalities who care more about a sale than whether the consumer can afford the vehicle they are looking at. So I put together some tips that will help you stay within your budget and get the car you want.
Tip Number 1
Get pre-approved for financing. This is probably the biggest factor to staying within your budget. You already know what you can afford, what your payment will be, and what your interest rate is. That’s powerful information and it will help you when you go looking for a vehicle.
Tip Number 2
Check with your insurance company to see what the car you want does to your premium. It’s no good to find a car you love and realize that the insurance is too expensive and you can’t pay both the new premium and your new car payment.
Tip Number 3
Take that financing and insurance information and start looking for a vehicle you want. I highly recommend using a car buying service if you don’t like to negotiate. TrueCar, USAA, and even KBB.com will negotiate a lower price before you even leave your house and the dealers that are part of the program will honor that price or they lose their status with the service.
Make a list of features you want in a vehicle. Then take that list and divide it into things you absolutely have to have versus things you would like. Whether you use a service or go to a dealer site filter the vehicles using the options you chose and look at inventory that most closely fits your desired options.
For example, many people I know just have to have Bluetooth, heated seats, leather, navigation, heated steering wheel, and a backup camera. Most new cars offer these features with a variety of option packages. Often though they may not include everything or for example to get navigation there is a bundle of other features you have to accept. This drives the cost up to several thousand in some cases. That’s when you need to decide is navigation that important or can you live with using Apple CarPlay or a phone mount for nav?
Tip Number 4
Be willing to leave the dealer. It might be the perfect car but if it isn’t a good deal walk away. This is really hard for people. I have witnessed a lot of purchases that happen simply because people were not able to say no and walk away. The dealer you are at isn’t the only one selling that brand car. Make them work for the sale and give you something for your dollar versus you giving them everything they want.
Tip Number 5
Remember in step one where I said to get pre-approved for financing? In this tip I recommend you be willing to use dealer financing.
Why? The dealer makes a small percentage of interest when they do the financing through a partner bank. Because of this, the dealer will work hard to get you at least the same rate or lower than your pre-approved financing. Sometimes they are willing to drop the price a little more to get you to use their financing. Again make sure it’s in your favor but this is a worthwhile step. Remember you don’t have to use their finance company if you don’t like the terms, that’s why you walked in with a pre-approved loan.