Friday, July 5, 2013

Purchasing a Car with NO Regrets!

Unless you happen to love negotiating or losing money, buying a car probably fills you with dread. There's really no such thing as a “professional car buyer”, however there are 268,300 professional car salesmen in the United States, according to the Bureau of Labor Statistics. While you may go into a dealership shopping for a car 10-12 times in your life, the salesmen are selling that many cars in a week. This gives car dealers a home-field advantage, but with some preparation and skillful negotiating, you can place yourself in a much better bargaining position than the average consumer.

Tips for working with a "savvy" car salesman:

1. Browse with no intention to buy: The first time you go to a dealership, you shouldn't be looking to buy. Tell dealers that you're just looking and don't let them talk you into anything. Better yet, drop by on a day when the dealership is closed. You can roam around the lot and inspect the window stickers with no pressure whatsoever. Take notes on what you like, then return home and do some serious research.

2. Find out what the dealer paid for the vehicle: You can't know the dealer's hand in a casino, but you can in a car dealership! Knowledge is key, so be sure to do your research! One of the most important things to know while you shop is the invoice price (the dealer’s cost) of the car. Fortunately, there are websites out there that can give you the invoice price of just about any vehicle, so plan to negotiate based on the invoice price, not the sticker price.

3. Get an online price quote: Actually, research a few. Most dealerships have their own online sales department and will get you a quote in a day or so. You're under no obligation to pay the quoted price, and it can be a potent bargaining chip with other dealerships.

4. Get your paperwork in order: Print out the invoice price on the exact model you want (with an itemized list of options) you're considering. Also, research any manufacturer incentives and rebates that apply to the car you're shopping for, and then subtract those from the invoice price. Be sure to check loan rates at local credit unions or competing banks and record the numbers. Once you've done your research, bring your numbers with you to the dealership. If the dealer can't match or beat competitor’s rates, tell him you'll finance the car another way!

5. Don’t talk about financing or trade-ins until you've settled on a price: A dealer isn't doing you any favors if he gives you a deal on the new car, and then offers you $1,000 below market value on your trade-in (so be sure to watch for this). The new car, the trade-in and the financing are three separate negotiations, so be sure to treat them that way. If the dealer isn't hitting the numbers you brought with you, shop or sell somewhere else.

6. Don’t fail the test drive: Taking a new car out for a spin can be an exciting experience, but don't get too giddy. If the salesman sees that you've formed an emotional attachment to the vehicle, it may put him out of the mood to compromise. Analytic buyers tend to pay less for their new cars than emotionally charged buyers. So don’t let your emotions take sure to inspect the environment of the vehicle, make sure that it's comfortable and ask questions. You're going to spend a lot of time in this car, so it's OK to be nitpicky!

7. Take a close look at the fees: Before you sign anything, take a close look at all the numbers on each contract to ensure they are what you agreed upon. Don't be surprised to find a number of fees on the sales contract, but be aware that some are standard, some are negotiable and some are simply outrageous. You should expect to pay the sales tax, a destination charge, title and registration fees and a modest documentation fee ($50 to $100 is a reasonable rate, but don’t be surprised if some dealers charge up to $300) . Advertising charges, which are fees charged to the dealers by manufacturers, often get passed right on to customers. Feel free to push back on these, or at least demand a further break on the price of the vehicle.

8. Be ready to walk away: Don't forget that your leverage with the auto dealer lies in your ability to walk out the door! No car salesman is going to take a loss on a sale, but even a few hundred dollars is better than a dead deal. You don't need to be obnoxious about it, but be firm in what you're willing to pay and accept in the negotiations.

Pen Air Federal Credit Union is setting the car buying process to Cruise Control. With rates as low as 1.99% APR* for up to 60 months and more ways than ever to apply, the road to financial fitness just got smoother. CLICK HERE to access a variety of informative resources before you shop for your next car.Call 1-877-4PENAIR for more information!

*APR = Annual Percentage Rate. 1.99% APR is for qualifying auto loans up to a 60 month term for current year and one year old models. Monthly payment on a $20,000 auto loan with a term of 60 months at a rate of 1.99% APR would be $350.47. Loans are subject to credit approval. Rates and terms are based on an evaluation of applicant’s credit and may vary. Other conditions and restrictions may apply. Pen Air FCU reserves the right to end this offer at any time. 

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