I have been in the auto industry business for over 15 years and I want to share some car buying tips for you when you purchase your next new or used automobile. I worked three years in sales, 8 years in finance, and I am currently a general sales manager for the top dealer in my area. I will show you every step to buying a car while giving you tips to get your best deal possible. You can leave the dealership knowing you got your best deal!

Tip 1

When you are looking to purchase a new or used vehicle, do a little research on the internet before you go to your local dealership. Your dealer may have an internet site where they have their cars listed along with prices. Most dealerships have their best prices on the internet because they want to attract customers to their dealership. Print off the cars you are interested in but dont tell the dealer you have been looking at their website. You will almost always get a higher price than the internet price because salespeople work on commission and they want to make as much money as possible. After you have settled on a car you like, let the salesperson know you have been on their website and that you already know the price is this. In most cases this has already saved you two to three thousand dollars.

Tip 2

Ask the salesperson to go inside so you can negotiate a deal on the car. You will always get your best deal while sitting inside the dealership because this is where the managers get involved and they are usually compensated on volume of sales so they just want to make sure you go home in the car regardless of the profit. Once inside, tell them you would like to see a carfax. Make sure this is the car you want to buy before asking because it does cost dealers money to run a carfax. We arent trying to put dealers under, we are just trying to get our best deal. Asking for a carfax lets them know how serious you are about purchasing this vehicle and they will do anything they can to make sure you go home in it.

Tip 3

If you have a trade do not disclose this to your salesperson or one of the managers until you have negotiated your best deal possible. If you already have an internet price, offer the dealer about $2000 less to get you started. Most likely they arent going to sell it to you for this because they are probaly working on a short profit margin from internet pricing but it gives you a starting point and they know you are serious. They will probaly come back and tell you that it is on the internet for this price and that is the least they can sell it for. Dont get discouraged at this point. Just let them know that you expect a discount and ask for the best possible deal from a manager. They will usually cut the deal a little bit, but dont stop there. Once you get your best possible deal from the manager, offer them about $500 less than this. You might not get the full $500 more off but management isnt about to let you walk out the door, and your offer could get you another $200 or $300 off. Once you have got your best price, if you have a trade let them know at this point.

Tip 4

After you have worked out your best possible deal, it is time to head to the finacing aspect of buying a car. Let your salesperson and mangement know that you have been researching rates and that you have checked with your credit union for their best rates. You also may want to know your credit score before you go car shopping. Knowing your cedit score can get you the possible interest rates for your new purchase. There is several different places on the internet to get your free credit reports. Once in the finance office the business manager will probaly give you a rate that is a little higher than expected, this is because banks andfinance companies let the dealers mark the rate up a couple of points to make extra profit. Usually the markup is 1.5 points over the rate the bank actually gives you, so start by offering the dealer 2 points less on rate. (Example: If the business manager tells you your rate is 7.99, offer them 5.99) This will get you started in your negotiation and hopefully you can get the full 2 points, but if not maybe you can save a point or so. Depending on how much money you are financing, this can save you $500 to $1500. You will also be offerd Gap insurance in the business office. This is to cover any amount the insurance company doesnt pay off in case of a total loss or stolen vehicle. (Example: You owe 25,000 and you total your car out. Your insurance company pays off 22,000. If you purchased the gap insurance, the insurance will pay off the remaining balance) A fair price for gap insurance should be no more than $300. Gap insurance is a must get if you owe more on your trade than it is worth or if you plan on putting excessive mileage on your new vehicle. The next thing they will offer you is an extended service contract. Most manufacturers these days have great manufacturer warranties and the need for an extended service contract is not worth the money. They will also offer you life and/or disability insurance, this basically cover your loan in case of death or if you get disabled and arent able to work any longer. This is definitely not worth the money at a dealership. If you insist on having life or disability insurance, check with your current auto insurance company to see if they offer it(in most cases they do), You will save thousands by buying the insurance at your local insurance company than through the dealership. After you have financed your vehicle, you are now ready to take home your new car, hopefully saving you thousands of dollars.

TRADE TIP

If trading a vehicle, do more research on the internet before you go to the dealership. Go to Kelley Blue Book or NADA to get a fair evaluation of your vehicle. You can also go to edmunds.com to get a fair evaluation. This will have you armed of what your vehicle is actually worth and always start at trying to get $2000 more than your vehicle is worth, this will leave you room for negotiation. Just keep working your way down in negotiations to get the most out o your trade. Research all three(Kelly Blue Book,NADA, and edmunds.com) and take an average of all three to determine the actual trade value of your vehicle. If you dont get at least this amount out of your trade, I suggest you move on to the next dealership. Note - Always remember that your car could be worth less than average if it has high mileage, previous body damage, current body damage, or mechanical issues. Always keep this in mind while negotiating.