6 Tips To Keep In Mind When Buying A Vehicle

I recently purchased a car for my daughter. Although she was super excited for her first car, I was less than enthused to go through the financing process again. I pulled out all my mental notes from past experiences on things to be on the look out for when buying a car.

Have The Kelly Blue Book Handy

Have the website for the Kelly Blue Book bookmarked and ready to go. It will help you determine if the price of a vehicle is within fair market value, as well as show you other cars of the same type for sale nearby.

Know If The Dealership Negotiates

Some dealerships have a “best price” policy, which means they don’t negotiate. Quite honestly, these are the dealerships I favor. I simply compare the price from that dealership to others to see if it’s the the lowest price. If it’s not, I walk out the door and go where the price is lower. You know, how shopping is supposed to work and my level of negotiating skill doesn’t impact whether I pay more or less for a vehicle.

Shop Interest Rates

Check the interest rate available for vehicle financing with your usual bank. Some people like to secure financing with their usual bank, but that might not be the best choice. Knowing the interest rate offered by your bank before talking to the dealership is a good idea, however.

Price and Monthly Payment Are Two Different Discussions

Don’t let the finance person ask you for a monthly payment target before the overall price is settled. Many car dealerships will extend the term of your loan to lower your monthly payments. At best, you just pay more interest, but worst case scenario you sell the car before your loan is paid off and you lose more money on an item that already depreciates as you own it. Settle the price first, then talk about monthly payments.

Take Advantage Of The Finance Person

The finance person has access to apply to many different financial institutions and has a good feel for, given your credit, which would give you the best interest rate. You may know what interest rate your bank may offer, but another bank may do better. Be aware though, that this process may temporarily ding your credit score.

Think About It

Vehicles are one of the most expensive things you will ever buy. Do NOT feel obligated to purchase the vehicle immediately. Be aware the car may get interest from others, but making a hasty decision will impact you for years.

Buying a vehicle is an exciting adventure, but also an expensive one. Go through the process with your eyes open and your guard up. Do your homework and make sure you stick to your budget!

How about you, EOD Nation, what other tips would you recommend when buying a new vehicle?

About Travis

3 Responses to “6 Tips To Keep In Mind When Buying A Vehicle”

Read below or add a comment...

  1. Selling monthly payment instead of the real price is a common approach for making sales, and unfortunately many people get fixated on the monthly payment. I worked in the mortgage industry for a year when I was first out of college and it was amazing how people only cared about the monthly payment and would overlook just about everything else. So I completely agree with your advice to focus on the overall price.

  2. When we bought both of our cars we got pricing through AAA. You can enter the make and model that you want and your zip code and it will give you the best price available from dealers in your area. None of the dealers in our town were a part of the AAA program, but the prices through the program were a good bit less than we were finding elsewhere, and well below MSRP. I asked the salesperson at our local dealership if they were in the AAA program (I knew they weren’t). She said “No, but show me the price you’re getting through AAA and we’ll match it.” I hate negotiating, so that was a nice easy way to get them to lower the price several thousand dollars.

  3. Rhianna Hawk says:

    My husband really wants to get a truck, and it’s good to know how to get the best deal for it. Checking what the overall price is before talking about monthly payments is a great tip, particularly to avoid the depreciation overtaking the loan cost in the event that we want to resell later on, as you said. I’ll be sure to look up the Kelly Blue Book you mentioned, as well, as a reference.

Leave a Comment...

*