7 Tips for Buying or Leasing a New Vehicle
Decide How Much You Can Afford
Decide how much you can afford and how much you are willing to pay before you shop for a vehicle. When purchasing a new vehicle, it is optimal to put down 20% in order to minimize the overall cost of the loan. Financial experts recommend that your total debt does not exceed 36% of your gross income. For example, if you make $50,000 a year, your annual debt payments shouldn’t exceed $18,000. If your existing debt payments equal $12,000 a year, you can afford $6,000 annually, or $500 a month, for car payments. Also, consider factors such as insurance premiums, taxes, registration and fuel economy – including whether the vehicle requires more expensive premium gasoline.
Don’t Be Afraid To Walk Away
If you feel any pressure to “buy now before you lose the deal,” then get up and leave. These are sales tactics used by sales people to create a sense of urgency with the goal of getting you to sign on the dotted line. If you feel any hesitation about buying a car, then trust your instinct and get up and leave. Sometimes your willingness to leave the showroom is your most effective negotiating tool.
Find Out The Factory Invoice Price For The Exact Vehicle You Want
The factory invoice price is the dealer’s cost for the vehicle and doesn’t include any of the dealer’s costs for selling, advertising, preparing, displaying or financing the vehicle. Once you know the dealer’s factory invoice pricing you can negotiate up from here. Instead of negotiating down from the MSRP (Manufacturer’
Learn About Manufacturer Rebates And Incentives Before Visiting The Dealership
Dealerships typically use manufacturer rebates to negotiate deals. They make you believe they are paying for the rebate themselves when in reality the rebate is coming directly from the manufacturer. Visiting the manufacturer’
Dealers Are Less Willing To Negotiate On Popular Models
Size up the supply and demand for the car you want. A good deal on a slow selling model might be below dealer invoice price, while a popular car can still command full manufacturer’
Finalize Purchase Price Before Negotiating Financing Terms Ir Trade-Ins
Negotiating all the details of the transaction can be a stressful experience. The new car, the trade-in and financing are three separate negotiations. When negotiating with a dealership, be sure to negotiate purchase price, not a monthly payment. If you say you can afford $500 a month, they know that if they can keep you focused on that number, it’ll be easier to get you to stretch the loan from 3 to 4 years and that can mean an extra $6000 for the dealership. Don’t be swayed by low monthly payments if they result in paying a higher total price. Once you’ve reached an agreeable purchase price, bring up your trade-in and negotiate that price separately.
Understand The Fees
Dealers can make up to twice as much by selling costly services than they make selling the actual vehicle itself. It’s normal to pay extra for taxes, registration, licenses and destination charges. Make sure taxes and title fees are being calculated correctly. Read all the documents carefully to avoid paying more than necessary. Don’t pay for delivery, promotion, handling charges, sales charges, floor charges or any other charges the dealer is making you pay. These are made-up charges that the dealer uses to pad the deal.
Be careful, dealerships will insert additional charges into the contracts. Look out for corrosion protection, paint sealant, fabric protection and window etching of the VIN. If you really want any of these add-ons, you can get them significantly cheaper at your local automotive shop.
Remember, once you’ve negotiated a purchase price, contact http://www.CarsForLessGuaranteed.com and make sure you really are getting the very best deal.