Cars are big investments, especially if you are buying new and top-of-the line models. It is a decision which must be given a lot of thought. A lot of people have made the mistake of not thinking things through before going to the dealership, so they went home with the wrong car or the wrong financing plans.
Most people want to know how they can save money on their next car purchase. The straight and simple answer to that is to purchase the car in cash and purchase a well-built, used vehicle. If you take this route, you will be able to avoid years of finance charges. However, for many of us this is not a possibility.
The Car People finance all kinds of vehicles
Image attributed to Wikimedia Commons: Edward McMaihin
If this scenario is not plausible for you, do not despair. There are still a few things you can do even if you do not have enough cash to pay for a car. Here are some tips for you:
Consider independent financing
People have this notion that they need the dealership to arrange the car loan for them. This is not true. If you want to be a smart customer, you can get a pre-approved car loan elsewhere before you show up to the dealership. This will elevate your status and give you a better ability to negotiate the price of the car. Also, places like Car Supermarket finance all kinds of vehicles and can help you get the car of your dreams.
Know where to look
Be in the know in regards to the interest rates being offered by lenders today. You can contact these lenders through phone or by email. So ask away. You would not want to show up to the dealership without any idea about their rates.
Keep things simple
Although most people have an idea about the car they want and the price range they will be able to afford, it is easy to be persuaded to spend more than you really want or need to once you are in the dealership. Never do this or you will be setting yourself up for trouble. Have a reasonable price limit in mind and stick to it, regardless of how tempting it may be to stray from it. A good rule of thumb to remember is that all car-related expenses, including gasoline, should only cost a maximum of 20% of your monthly income.
Know the cost of cars
There is no easier victim than a person who does not know the price of cars on the market when going to the dealership. There are various places online where you can see the current pricing of automobiles and vehicles.
Do the Math
Many dealerships offer different types of payment schemes, and before you agree to any terms you must do the Math yourself and calculate which will enable you to save the most amount of money. For example, if given a choice between a zero-percent loan and a rebate, you must never assume right away that the former is the better option. Calculate and find out for certain! This is the only way of knowing if you are getting an honest and fair price.