What NOT to Do When Shopping for a Car: 11 Key Steps
by www.SixWise.com
Some people cringe at the thought of having to haggle over
the price of a new car, while others are excited by the thrill
of the "hunt." No matter which category you fall
into (or if you're somewhere in between), it's easy to get
taken for a ride when you decide to purchase a car.
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You should have a good idea of what kind of car you
want -- and how much you want to spend -- before talking
to a car salesperson.
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Even if the salesperson is just trying to earn an honest
dollar, these tips NOT to do are essential for every car buyer
to know.
1. Do not go car shopping before you know what you want.
Once you enter a car sales lot, it's easy to get sucked into
"special deals" and drive away with an impulse purchase.
Do a little research first (online, at car shows, by talking
with friends) to determine what kind of car you're after --
and their going rate.
2. Do not shop without knowing what you can afford (and
your credit score).
Profits on used cars can be two or three times higher than
those for a new car. A salesperson may, therefore, try to
sell you a used car for that reason. It is essential for you
to know how much you can afford, so you know whether a new
or used car is right for you. Also, your credit score will
drastically influence what kind of interest rates you are
offered on a loan. If you know your credit score, you know
what kinds of interest rates should apply to you.
3. Do not tell the dealer how much you want to pay per
month.
It's easy to get a $350/month payment for many cars, for instance,
but that doesn't mean the final price of the car is the same.
How many months the payments extend for and how big a down
payment you make both affect the final price of the car. You
should only speak of the car's price in terms of the total
payment.
"Never answer the question, 'How much can you pay each
month,'" says James Walsh, editorial director with Silver
Lake Publishing in Los Angeles. "Stick to saying, 'I
can afford to pay X-dollars for the car.'"
4. Do not assume the dealer is the best place to get
a loan.
As with any other loan, you can shop around, compare offers
and get the best deal you can negotiate. "It's very important
that buyers not think of the dealer's finance department as
their loan agent. The dealer is not required to find you the
best rate, and might add to the number by serving as the middleman,"
says Joe Wiesenfelder, senior editor of cars.com.
5. Do not trade-up your car before paying it off.
It may be tempting to trade your car in for a newer, flashier
model, but doing so before you've paid it off is very risky.
It can be done legally, by "rolling over" your remaining
balance into a new car loan or lease. But in the event that
the car is totaled or you trade it in, you'll still owe the
large balance from both cars.
6. Do not accept a six- or seven-year loan without very
serious consideration.
It may be worth your while to extend your loan for a long
time period in order to get lower monthly payments. However,
be aware that you'll still be making payments as the car is
depreciating in value, meaning that at some point you'll be
paying more than what the car is worth. "These loans
take forever to pay off," says Mark Perleberg, lead automotive
expert with NADAGuides.com.
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Though it will take some extra effort on your part,
discussing all aspects of the car deal (the price of
the car, your trade-in value and financing) separately
is the best way to get a good deal.
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7. Do not discuss your trade-in before negotiating a price
for the car.
Once you tell the salesperson that you'll be trading in a
car, they're likely to inspect it right away. If it seems
like they're giving you a good amount for it, it's likely
because they're planning to make up that money in the price
you pay for the car. You should always negotiate the lowest
price for the car before discussing your trade-in.
8. Do not tell the salesperson you love the car.
If the salesperson knows you want the car, you lose negotiating
power.
9. Do not leave a cash deposit.
If you later change your mind, you're not likely to get the
deposit back. It's also not wise to leave more than $250 for
the deposit. If the salesperson says they cannot accept less,
walk away.
10. Do not feel obligated to buy a car because you test
drove it.
Test driving a car is necessary to determine if it's right
for you -- but does not mean you're in any way obligated to
purchase the vehicle.
11. Do not sign the paperwork without checking it over.
When you decide on a car and agree on a price, you will receive
stacks of forms to sign. Make sure the numbers match up with
what you've agreed upon, and check to make sure there are
no bogus fees or extras (like fabric protector, an alarm,
etc.) that you did not authorize.
Buying a Used Car - Some Extra Tips
Although the above tips apply to purchasing a used or new
car, purchasing a used car brings up a whole new set of considerations.
When buying a used car, be sure you do the following things
before driving away with the car:
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Ask for the car's maintenance record from the owner,
dealer or repair shop.
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Test-drive the car in a variety of areas (hills, stop-and-go
traffic, highways, etc.).
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Have a mechanic that you hire check it out.
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Realize that if you buy the car "as is,"
you'll be responsible for any and all future repairs.
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Make sure the car has the Buyer's Guide if you're
buying it from a dealer. The Federal Trade Commission's
(FTC) Used Car Rule requires every used car sold from
a dealer to have one.
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Have any oral promises put into writing.
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If buying from a dealer, check it out first by contacting
local consumer protection officials.
Recommended Reading
The
Safest & Least-Safe Cars of 2006
What
to Do & Know if You Are in an Auto Accident (Includes
a Checklist Everyone Should Print Out)
Sources
BankRate.com:
Top 10 Car-Dealer Scams
ConsumerAffairs.com:
How Not to Buy a Car
FTC:
Buying a Used Car
Edmunds.com:
10 Steps to Buying a New Car
FTC:
Tips for Buying a Used Car