| Over the many years I've spent working in the car | | | | of these sources are simply guides, and are not set in |
| business, I've personally been involved, to one degree | | | | stone values. For instance some vehicles may be |
| or another, with thousands of vehicle sales. I've | | | | "soft" (not worth as much as it's book value), like a |
| compiled these steps simply by observing the | | | | truck with a V10 engine. With gas prices where they |
| customers buying these vehicles, and what they did | | | | are at a V10 truck that has a book value of $20,000 |
| that made the process easier for them and saved | | | | may only be worth $12,000 to $14,000. What? That's |
| them the most money. So here we go... | | | | right. If a dealership were buying a V10 truck with the |
| #1 You must know you're credit score. | | | | intention of reselling it, they'd have to be in a position to |
| If you don't know your credit score and what's on your | | | | sell it quickly, or else they risk it collecting dust on their |
| credit file, it will not only make selecting the appropriate | | | | lot for the next year. People aren't exactly jumping |
| lender for you more difficult, but it could lead to a | | | | through burning hoops to rush out and buy 6 MPG |
| costly surprise (high finance rates) when it's time to | | | | trucks with the current gas prices. |
| buy. A $20,000 loan for 72 months at a 6.9% APR | | | | If you need additional help with determining your trade |
| has a monthly payment of $340, which fits into most | | | | ins value to a dealer, please email me and I can help. |
| peoples budgets. On the flip side, if you thought you'd | | | | By the way, you'll need to expect to get less trading |
| qualify for the 6.9% rate, but it actually turned out you | | | | your vehicle in to the dealer than selling it on your own. |
| qualified for a 18.99% APR, you'd be looking at a $467 | | | | There are some benefits though. By trading your |
| payment. Surprise! | | | | vehicle in to the dealer you will not have to do any |
| #2 Get pre-approved for a loan. | | | | selling, telling, or explaining to an assortment of |
| Now that you know you're credit/FICO score, you | | | | interested buyers, have random people come to your |
| definitely want to get pre-approved for an auto loan. | | | | home to view the vehicle, and you won't have two |
| Getting pre-approved gives you the ability to "Buy Like | | | | payments to make each month. |
| a Cash Buyer," which greatly increases the leverage | | | | If you do expect to sell the vehicle on your own, I'd |
| you have when negotiating the best possible deal. I | | | | recommend posting it for sale online with one of the |
| recently observed the last 40 deals at my dealership, | | | | large car websites that are out there. This way you'll |
| and found that cash buyers saved over $2500 per | | | | get maximum exposure, and you'll have a description |
| car deal, compared to those that financed. If that's not | | | | with photos of the vehicle posted, which should save |
| a call to action, I don't know what is! You can get pre | | | | you a lot of the selling, telling and explaining to people |
| approved with your local bank or credit union, and with | | | | that may just be kicking tires. |
| most banks and credit unions you can apply directly | | | | #5 Get insurance quotes. |
| from their websites. | | | | I can't even begin to tell you how many customers I've |
| Another benefit of securing your own financing, is that | | | | seen go through the whole buying process (usually |
| you take away the dealerships ability to profit from an | | | | hours), get all excited about their new vehicle, maybe |
| over inflated finance rate. This is big money to a | | | | agreed to $50 a month more in monthly payment, |
| dealership. For instance, if a dealer was able to get a | | | | because they had to have that one, and then they call |
| 5.9% buy rate from a lender the lender will, on | | | | to get insurance quotes. Two words, Big Mistake! |
| average, allow a two point markup. This means the | | | | Using the same scenario above, the customer is |
| dealership would sell the loan to you at 7.9%, and over | | | | already paying $50 more a month than they had |
| the term of the loan this could equate to $1000 or | | | | figured and now they call for insurance only to find that |
| more in profits that you paid unnecessarily to the | | | | their insurance is going to go up another $60 a month. |
| dealer. | | | | This can be disastrous to your financial future! |
| #3 Start your shopping online. | | | | Remember there is more to car payment than the |
| You must not walk into a dealership and have no clue | | | | actual car payment itself. Get insurance quotes before |
| what average prices are for the new or used vehicle | | | | you ever go to the dealership. It's FREE, and doesn't |
| your considering. Most people that walk into a | | | | affect your credit, so let the insurance companies |
| dealership with no clue what the average prices are | | | | compete for your business. |
| for the new vehicle they're considering will typically get | | | | #6 Be prepared. |
| caught up in the emotion of the moment and pay way | | | | Now that you've got all your ducks in a row, print all |
| more then they could have. Get a whiff of that new | | | | related information you've found and bring it to the |
| car smell and suddenly you're taken away to a distant, | | | | dealership with you. If you really want to fluster the car |
| far away place... | | | | dealer, bring a financial calculator with you and use it |
| I'd personally suggest that you find your next vehicle | | | | while you're negotiating, car salesmen love that |
| online. This will save you a lot of time not having to go | | | | (sarcasm). |
| dealership, to dealership, to dealership, it increases your | | | | I hope my affection for the Internet really came |
| leverage in a big way, and will typically save you | | | | through to you. For car shopping/buying the Internet is |
| money right out the gate, because of the competitive | | | | truly the way of the future. It's a very easy way to |
| nature of the Internet. It also allows you an easier way | | | | gain knowledge, which translates into leverage for you. |
| to turn someone off, i.e. a sales person, if you don't like | | | | Remember, a vehicle is typically the second largest |
| what they are offering, simply stop responding to them. | | | | purchase you'll make, and if you don't do your |
| #4 You must know what your trade in is worth. | | | | homework a car dealer will make you pay. Trust me |
| Check out sites like Kelley Blue Book, or NADA to get | | | | I've seen it every day for the last nine years. |
| a feel for what your trade is worth. Keep in mind both | | | | |