Buying a Car

Start before you leave your house
Look over your budget and determine what you can afford to pay per month, decide whether you want to buy a new or used car, and do some research on the kind of car you want.

If You Are Trading In Your Car
If you have a car you're thinking of trading in, determine its wholesale value. You can start at an automotive web site like Edmunds.com or Kelly Blue Book, but be careful. Use the prices you get at these places only as a rough guide.

Then it's time to hit the road. Clean up your car and take it straight to the used car department of a local dealership. Tell them you are interested in selling your car, but not in trading it. Be firm, no matter how they try to wheel and deal you. All you want is an offer on your car.

Now head to another dealership and do the same thing. Be sure not to tell them what the other dealership's offer was. Then get a third bid from an exclusively used-car dealership. When you have those three firm offers on your car, then you'll know your car's wholesale value. It's the highest bid you received.

Now you'll want to check the local paper and see what cars like yours are selling for in your area. See what dealers are asking for your car. The average dollar amount you come up with will be your car's retail value. Now you may want to reconsider trading your car for wholesale or selling it yourself instead. It is a bit easier to trade your car, but remember you'll pay for that convenience.

Financing
The last place you want to secure financing is at the dealership where you're buying the car. Start with your local credit union and/or bank. Do your best to walk onto the car lot with your financing already in place.

Start by applying for a loan with a credit union. If you are rejected, you'll want to review your credit history. SPRINGBOARD's certified counselors can do that with you for a small fee. Try to resolve the problems that kept you from securing financing and keep trying. Odds are a dealership will be able to get you financing regardless of your credit history, but the loan will be at very unfavorable terms. Stick with the bank if you can.

Time To Shop
When you're ready to go shopping for that new car, it's time to put on your game face. You want to be confident and in charge when you walk onto a car lot. And don't get enthusiastic about any car you see. You have to be patient and careful not to let the salesperson take advantage of you, because that's what they're trained to do.

Don't be a payment buyer. Remember, everyone buys his or her car with cash. Sometimes you take out an auto loan to get that cash, but you're still paying for that car in full when you buy it from a dealer. Don't even talk about monthly payments with the dealer; for now, concentrate on getting the best price for the car you want.

Walk onto the lot armed with as much information as possible. Try to find out the invoice price of the car you're interested in. Edmunds.com can provide that information, but be careful to avoid the advertising and hyperbole on that site. Consumer Reports is a more reliable source, but they will charge you a fee for their services.

Time to Negotiate
Find more than one dealership that is selling the car you want to buy. Don't be shy about getting up and walking out on either one of them; you don't have to put up with high-pressure tactics if you have another dealership eager for your business.

Getting the Best Deal

• Always bargain up from the wholesale price of the car you're buying, not down from the sticker price.
• Never pay sticker price for a vehicle from a dealer.
• Try to come up with a fair price for the vehicle. The dealership is entitled to a small profit, and the salesperson will have earned a commission if you've driven a hard bargain.
• Be wary, though. The dealership may try to sell you extended warranties, undercoating, rustproofing, fabric protection, etc. All of these items are worthless and overpriced. Just say no to them.
• If you're trading in your car, have the dealership appraise it, but only after you've agreed on a price for your new car. If their offer doesn't match or exceed the wholesale value you determined, refuse to do business with them until they offer you a fair price.
• Read everything you are asked to sign very carefully. Don't take anyone's word for what the contract says. Read it for yourself.

Drive Home in Your New Car
If you've done it correctly, you'll be pretty tired by now. Negotiating for the best price on a car is hard work! If it was easy for you, then you didn't get the best deal. Trust us - that extra work is worth the thousands of dollars you can save.