You can make the car-buying process a lot easier if you plan before making the trek to a dealership.
Steve Bernas, vice president of operations with the Better Business Bureau of Metropolitan Chicago, suggests, for example, that you obtain a reliability report on the dealerships you plan to visit from the BBB.
The report will list how many complaints have been received about the dealership and how the complaints were resolved.
Bernas also advises shopping for financing before you visit a store.
“By shopping financing first, make sure you get a copy of your credit report to learn if there are any errors and to make certain” you get the best interest rate, he said.
“First-time buyers often don’t have a credit history so you want to shop lenders to learn the lowest possible rate available to you,” he added. “Remember you don’t have to finance through the dealer.”
Checking lenders first lets you know how much financing they will offer so you don’t shop sports cars on an econobox budget.
“First-time buyers walk into a showroom and see that new Mustang GT and want to buy it,” said Lee Weinman, a Chicago Ford dealer. “If you make $2,000 a month, you can qualify for a new-car loan, but it’s not going to be (for) a Mustang.
“The biggest mistake first-time buyers make is over-buying,” Weinman said.
If you over-buy on that first vehicle, you risk not making payments on time, if at all.
“If slow repaying the loan, it’s going to be hard getting another loan in the future,” Weinman said. “If you buy a vehicle you can afford and manage the payments on time, you open doors in the future to nicer vehicles – even nicer homes.
“You have to look at the whole transaction – the type of car you need, the amount of loan you can support and what amount of insurance you can afford to pay,” Weinman said.
Insurance, like financing, should be shopped before visiting the showroom.
Don’t put yourself in a position in which the new car will cost you $400 a month in payments, which you can afford, only to find that insurance premiums will be another $200 a month, which you can’t afford.
And don’t take the vehicle home until your financing is secure, Bernas warns.
Make sure any warranty claim and/or promises by the salesman are put in writing and on the contract.
Remember there’s no three-day cooling off period in which to take the auto back, Bernas said. Also, be wary of aftermarket products and services. The prices of these options are often inflated to maximize dealer profit, Bernas warned. These items would include rustproofing, fabric treatment or extended warranties, especially those from an out-of-state insurer rather than the manufacturer.
Keep your deposit money in your pocket until you are sure you want to buy that vehicle.
“A deposit is usually considered earnest money and binds both parties to the contract,” Bernas said.
The salesman wants a deposit to keep you from finding a better deal at another store. If told you have to place a deposit before the salesman will quote a price or to test-drive the car or as a sign of good faith, do an about-face.
When you start talking price, ask whether there are any first-time buyer incentives and whether you qualify for them.
Don’t sign any contract before reading and understanding all of its provisions. If a clause concerns you, ask that it be explained or, if necessary, changed.
Be wary of the salesman who wants to know what you’re willing to pay per month or quotes monthly payments rather than a price.
If you say you can afford $400 a month, he’ll find a vehicle in stock that he’ll sell at that price or will extend the loan to bring the payments to that $400, even if it means you’ll be paying for 84 months rather than 48.
Don’t let the salesman quote you option prices based on monthly payments so the $2,000 audio upgrade is only $28 a month – over 72 months.
And test-drive the vehicle before buying it. Drive on the streets or expressway that you usually do and at speeds you usually travel.
Finally, make sure everything works because things often get fixed faster before you hand over a check than after.
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