People buy cars for any numbers of reasons. According to a recent BIGresearch report, 35.2% of buyers are looking to replace a car with high mileage and 22% just wanted something new. However, what’s disconcerting is that many of these auto buyers don’t realize they’re paying more than they have to. If you take the right approach to buying a vehicle, anyone can become a savvy car buying consumer who gets the right vehicle at the right price.
Break It Up
The most important thing car buyers can do is to separate the financing and purchasing of the vehicle. When both transactions are combined, it opens the door for confusion about what costs are for the vehicle and what costs are for the financing. This also allows the salesperson to wrap everything in one neat package, even if that might not be the best deal for you.
Step 1: Secure the Financing
Most people assume that you have to get financing from a car dealership to get a new car, but that just isn’t the case. Many financial institutions, like Florida Credit Union, can pre-approve you for financing before you go car shopping, which means you will have your rate, term and payment estimate for the determined amount you wish to finance before you ever step foot on the lot.
Step 2: Find Your Vehicle
Armed with a pre-approval, you can now shop with "money in your pocket” and the confidence that you know what you can afford. Now, you can focus on the negotiations of the price of the vehicle, instead of also worrying about how you're going to finance it.
Be prepared to be asked about financing from the salesperson at the dealership. All you need to say is that you have already secured financing and instruct the dealership to forward your buyer's order (a document stating the total amount you and the dealer agreed you’d pay for the car) to the financial institution that pre-approved you. From that point, they’ll take care of the process and all you have left is drive home with your new ride.
We want to know! What worries you about the car buying process?