So you’ve found the perfect used car, but you are not sure how to close the deal and make you are not getting taken for a ride. Here are some tips to help navigate the world of negotiation and financing – to ensure you can afford your vehicle in the years to come.
Do I Really Have to Negotiate?
If you’re the buyer, it means sitting down with someone who may have more experience than you do, but it doesn’t have to be an intimidating process. Remember that you have all the power in the transaction: You can buy a car from the first person or the 10th, while the salesperson needs to make every sale he or she can. You definitely have the edge.
How Can I Make the Negotiation Better?
Know Your Price – The internet is a fantastic resource. It used to be that the salesperson usually knew more than the customer about prices, and that was particularly true of used cars. Now, you can determine the price you’re willing to pay before you ever walk in, and refuse to pay a penny more.
Don’t Say Too Much –If you talk a lot, you’re probably not going to cause the other person to have a sudden change of heart and give you a better deal, but you could accidentally give the clues they need to know to hold out for more money. If in doubt, don’t say anything. It can be difficult, particularly when the silence is awkward and tense, but saying nothing could be the right thing to do.
Walk Away – If you aren’t willing to walk away and leave the salesperson without a sale, then what incentive does he or she have for lowering the price? Making a resolution to wait a week before you buy will make it easier to walk away and give you time to make sure you’re certain of your purchase. If you wait, you might even get a phone call during the week with a better price, especially if it’s near the end of the month or if it’s been raining.
Should I Finance the Car at the Dealer?
One of the keys to negotiating a car deal, whether at the dealership or from a private seller, is securing the best financing available. Even a tiny difference in your interest rate could potentially be worth hundreds of dollars over the life of the loan.
Get Financing First – It is often a good idea to talk with your credit union or bank first to make a clear plan for how much you can spend, so you’re not shocked when that first payment is due. They will also help you figure out how much you’ll need as a down payment.
Even if you have a troubled credit history or you’re working to rebuild your credit, you still have options available to you. Credit unions often offer credit rebuilder programs to help you improve and protect your credit while possibly lowering your insurance premiums.
Consider a Lease – If you’re the kind of person who will always have a car payment, a lease could be your best option. You can keep your monthly payments down, and the downsides of a lease might not actually worry you that much. The biggest weakness with a lease is that you don’t build equity and won’t have a vehicle to trade. But, if you’re going to have a car note anyway, savings on that note can be put away to use as a down payment on your next vehicle, earning dividends in a savings account instead of depreciating in value. It’s also easy to access that money if you need it along the way, which is not true of the equity in your vehicle.
Florida State University Credit Union offers competitive rates on auto loans, great leasing options and programs to help rebuild your credit. For more information and guidance to make your car buying experience as enjoyable as possible, stop by any FSU Credit Union branch or call (850) 224-4960 (Tallahassee) or 877-GO-FSUCU (Toll Free).
*The content provided in this article consists of the opinions and ideas of FSU Credit Union, does not constitute legal or financial advice, and should be used for informational purposes only. Any decisions you make based on the information contained in this article is made in your sole discretion and liability. FSU Credit Union disclaims any damages or liability for decisions you make based on the information provided.