Car Financing

When purchasing a car, how you will be financing it has a lot to do with how much of a deal you will be able to make for yourself.  The entire process of dealing with a car salesman can be a difficult task, especially if you are not prepared.  Keep in mind that it is the salesman’s job to sell you a car at the highest price he can get.  That’s what he is taught to do.  He is a professional salesman.

If you find car salesmen intimidating, you may want to purchase your next car from an individual.  Keep in mind that this may not be an option for everyone if there is financing involved.  It is always easier to go through a dealership or used car lot when you are in need of financing to make your purchase.

You may have chosen another reason to go buy your car from a car lot or dealership, the promise of low finance rates.  Be aware that the rates advertised are not always the rate they will offer you.  There are always extenuating circumstances to the deals offered – a down payment, if it is a new or used vehicle, and if there is a trade-in involved.  Be sure you are fully prepared and you have done your homework, especially if you are going to trade in your old vehicle.  If you haven’t done any research, you will not know if they are offering you a fair price for your trade in.

One of the best negotiating tools is coming prepared to give them a down payment.  This will help you get a better deal because the dealership or car lot knows they are getting money up front.  When the entire deal is financed, it costs the seller more money.  Car dealerships are not financial institutions so going through them for your financing will cost you money as well.  They do not usually offer the best rate you can get.  By using the financial institutions or credit resources you already have a history with, you are more apt to get a better financing rate.  This is only true if you are buying a used car.  A lot of dealerships now have 0% financing on new cars, so you may be able to get a better deal from the dealership if you are planning on buying a new car.

Just remember that if you come prepared with your own money and/or financing arranged in advance, you will the one in charge of the negotiations and you can cut yourself a better deal. So that beautiful new car may not cost you as much as you think, if you are in the driver’s seat, so to speak!