Buying a Used Car or Truck Tips You Should Know. What Should I Learn Before Buying A New Vehicle?
Tips on Buying and Financing a Used Car or Truck
My advice is coming from over 15 years in the Retail vehicle market.
There are many things to consider before you head out to your local car dealers to look for your first vehicle or perhaps replacing your current vehicle.
1. Do you want a Manual or Automatic transmission?
Manual transmissions have fewer problems overall.
2. Do you need a two door or four door vehicle?
Two doors are more money to insure as they are considered sports cars.
3. Do you want a car a truck or some kind of minivan, SUV?
The amount of passengers the vehicle is capable of carrying could be important to you in the future.
4.How many cylinders are you looking for?
A four cylinder does not always get better gas mileage than a six cylinder. It all depends how you are going to use the car.
5. Are you going to pay cash or finance the vehicle.
Depending on your credit rating or income status financing a vehicle might be a problem. It is definitely cheaper in the long run to pay cash as you will not be responsible for any finance charges.
6. If financing is your only choice are you going to get a loan from your own bank or are you going to let the dealership set up a loan for you?
Dealerships make money on the loans they write. Lets say they buy the loan for 6.9% they then turn around and sell you the loan at 8.9% thereby making 2% on the financing.
7. Do you have a vehicle now, are you going to trade it?
You can get much more money if you sell the vehicle yourself it just requires time and possibly depending on your state a need to warranty the vehicle for a certain amount of time.
Now that you have an idea of what you are looking for in your next vehicle and how you are going to pay for it time to go out shopping. Searching the Internet will give you an idea of what your local dealers have for inventory and approximately how much they are asking for the car.
Narrow your search down by getting out there and driving as many vehicles as you think you would consider owning.
Dealing With The Salesman
1. Do not discuss your credit with anyone until you find a vehicle that you know you want to buy.
2. Do not mention your trade until you receive the best price on the vehicle your thinking about buying that you can get.
3. Ask if you can bring the vehicle too a mechanic you trust.
If the dealer is hesitant about this then there is something wrong with the car that he does not want you to know.
4. Never negotiate the payment repeat Never negotiate the payment.
The only two things important when you negotiate a vehicle price is 1. How much is the car you want to buy and 2. How much is your trade worth.
5. Keep the price of the car you are buying separate from the car your trading if you are trading a car.
Dealers will try the "give me $5000 and your trade this is a deception as they are combining discounts with the actual value of your trade. This is their game. Do not play it.
Once A Price Is Agreed
If you are paying cash and you found the vehicle of your dreams then your purchase is done. If you are financing through the dealership there is a couple of other things to consider.
1. Extended Warranties? They pay for themselves if something major that is covered by the warranty happens during the warranty period.
The dealer can also charge as much as they want for the warranty and many people do not realize they can negotiate the price of the warranty itself.
2. Insurance? The dealers call it "croak and choke" If you pass away or are disabled during the loan period the insurance covers your payments. Once again this is a highly profitable product for the dealer to sell.
3. Gap Insurance? This insurance will cover loan deficiencies in the event that the vehicle becomes a loss.
4. Dealers also sell multiple other products in their finance office.
Tire warranties, Lo-jack, Remote Starters, Alarms, Undercoating, GPS, DVD players and I am sure there are many others I do not even know about.
The reason I tell you never to negotiate the payment is that by extending term or manipulating rates. (for example going from a 36 month loan to a 72 month loan will drastically lower the payment without affecting the price of the car. Lowering the rate that the payment is worked at will accomplish the same illusion)
The dealer will also add all kinds of extras into the payment whether you want them or not. Then when you sit down to sign the paperwork the finance manager will tell you they included it into the deal. That is a lie you will be paying for every insurance warranty or other product they pack into your payment.
I hope you find this article informative. If you have any further questions on purchasing a used car feel free to contact me. Thank you for taking the time to read my Hub.
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