Steps you can take to make your car-buying experience as smooth as possible
Most people become overwhelmed when it comes to buying a new car. But what if it didn’t have to be so bad? There are steps you can take as a savvy consumer that can make you more prepared and better informed so your car buying experience is as smooth as possible. What should you know?
Here is some advice:
Pull your credit report ahead of time
Pull your own credit report and review it for errors. Know what your credit score is when you visit the dealerships so they can give you more accurate quotes. When the dealerships pull your credit report, it is considered a “hard inquiry,” and when combined with other hard inquiries, it may hurt your credit score.
Negotiate the final price of the car, not the down payment or monthly payment
If you start negotiating separate parts of the transaction, a dealer can ‘Rob Peter to Pay Paul.’ Always negotiate the final price of the car. So many dealers want to work with you based on your monthly payment and down payment, not the final price of the car. Absolutely do not fall into that trap; work your car deal first.
Know how much you can spend
Sit down and work your monthly budget before you walk into the dealership. The last thing that you need to do is get in over your head because you’re so excited about a car that somebody talks you into buying, but that you can't afford. Spend no more than 20 per cent of your net income on a monthly car payment.
Check dealership ratings
Check out the ratings of both the sales and service departments of the dealership you intend to visit. This is where Google becomes your friend. If the dealership has poor ratings in their sales or their service department, it’s time to look for a different dealership. It is definitely worth driving an extra 20 minutes to the dealership on the other side of town if its customer reviews are significantly better.
Call your insurance agent
There are so many variables in the insurance business, including whether or not you have teenage drivers or a poor driving record as well as classification of the car you’re looking at. For example, if you’re going from a minivan to a sports car, there are many reasons why your insurance cost is going to increase. Not only is the car’s classification important, so is the fact that the car you’re looking at is more valuable.
Subvented financing or cash rebates?
These days, interest rates are quite low. If you have good credit, I always recommend you take the cash rebate versus the subvented financing, even if it is zero per cent. The reason: if something happens to your car, whether it gets wrecked or stolen or you simply want to trade it in, you’re always better off having taken the principal reduction upfront, meaning that you’ll owe less on that car if something happens. In today’s market, with interest rates from banks and credit unions as low as 1.9 per cent anyway, this choice often makes the most sense.
Beware of pre-closing questions
Salespeople are trained to ask you pre-closing questions to help you visualize yourself owning the car before you really do. Watch out for questions like, “Can you see yourself driving this car?”, “Does this car work for you?” and “How does this car make you feel?” This is persuasion 101 and it works. Similarly, the salesperson might ask you what your favourite kind of music is, and then bring the car around with that music playing.
ABOUT THE AUTHOR
Lisa Copeland was known across the automotive industry as a leading sales expert and dealership principal who could move inventory off the lot. She is author of her new book, Car Buying, Her Way: The Fierce Girl’s Roadmap to The Car of Your Dreams.