(ARA) - Buying a new vehicle is a major financial investment.
But there are also many additional factors that come into play when buying a
car. By being prepared with some research before you set foot in a car
dealership, you can save yourself thousands of dollars on your next new car.
Here are some suggestions.
First, set a budget -- and be realistic. "Set your budget before you start
looking at cars," recommends Maxine Sweet of Experian, a company that provides
consumers with tools and products to help them understand, manage and protect
their personal credit profiles. "You won't be tempted to spend more than you can
afford if you only look at cars that fit your budget." When determining your
budget, be sure to factor in how much you can afford to spend on maintenance,
gasoline, and other items required for auto upkeep.
Now is also the time to make sure your credit is in order so that when you find
the right car, you'll be ready to drive it home. "You don't want to be ready to
seal the deal only to find out that you don't qualify for financing," says
Sweet. An easy way to check on your credit is to log onto www.experian.com.
You'll get quick and easy access to your credit report and a credit score to
help you learn what positive and negative factors are affecting your credit
risk, as well as find out what lenders will see when they review your credit.
With this information in hand, start researching vehicles that are in your price
range. All major manufacturers have Web sites where you can get details on
various models, as well as available options. You can also gather information
from auto magazines and the auto section of your local paper. Be as open-minded
and flexible as you can at this point. Don't base your choice on looks alone --
find out how different vehicles rate in terms of value, repairs, safety and gas
mileage. All of these factors will affect the long-term costs of owning the
vehicle. Also, don't forget the impact of a potential increase in insurance
premiums on your monthly budget.
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After you've narrowed down your automobile choices, it's time to test
drive your top contenders. Make it clear to the salesperson at the
dealership that you're not there to buy so you don't spend your time on
price negotiations at this time. When you've tested the cars on your list,
eliminate any you don't like, and rank the remaining cars in order of
preference.
Don't make a beeline to the dealership yet, though. Once again, a little
research is in order. You need to find out the factory invoice price --
the amount the dealer pays for the car. The difference between this price
and the manufacturers suggested retail price (MSRP) is generally what
makes up the dealer's profit. "You should barter up from the factory
invoice price, not down from the MSRP," says Sweet.
If the dealer isn't prepared to negotiate, you should be ready with Plan
B. That might involve heading down the street to the dealer that sells
your number two choice, or it might mean being patient and biding your
time until the dealer is ready to talk terms. For example, if the car you
have your eye on is a hot, popular model, the dealer won't have to concede
to any special deals to move it off the lot. But if you're willing to wait
six months or so until the buzz dies down, the dealer might be more
anxious to move the car out the door, hence more willing to deal. Many car
shoppers wait until the end of the month or the end of the quarter to buy.
Salespeople have certain quotas they need to make, and if they're short in
a given month, they may be more willing to talk terms.
So now you've got the car you want at the price you want --
congratulations! But don't let your guard down just yet. You still have to
make the smart financing choice. Once again, this is where preparation
pays off. Find out about any special promotions, rebates, and warranties
that may apply, but be sure to read all the fine print. Terms and
conditions may vary after an introductory period, or other clauses may
apply. Also, unless a dealer is offering a special interest rate as an
incentive, chances are the interest rate the dealer will offer you will be
higher than what you could get through a bank or credit union. So, if
you're not getting a special deal, you may be better off arranging your
own loan. This is where knowing your credit rating comes in handy -- the
better your credit rating, the better rate for which you will qualify. If
you know you qualify for a good rate, you'll be less likely to fall for a
less favorable financing pitch.
And now that you've got a handle on your credit situation, why not use the
anniversary date of your car purchase to remind yourself to conduct an
annual review of your credit report. That way, you'll be ready for your
next big purchase.
For more information on learning about your credit, visit www.experian.com.
Courtesy of ARA Content
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