By Kristina Lockridge
Financing a vehicle can feel a bit like ordering off one of those 15-page bulky restaurant mega menus. You have an idea of what you’re looking for before you get there, but once it’s time to review your options and make a decision, you’re suddenly debating all the choices in front of you. Did I pick the right place? Am I getting the best deal here for what I want? How can I really be sure when there are so many options to consider?
The best way to circumvent these questions when purchasing a shiny new ride is to be as prepared as possible in advance, and go into the process knowing specifically what will work for you, your family and your budget.
#1 – Get pre-approved and set your budget.
Going into a dealership with a pre-approval in-hand gives you power over the salesman. You will know exactly how much you’re willing to spend and ultimately what vehicle you can afford. Plus, getting preapproved by your credit union or bank helps you understand the interest rate and loan amount available to you before you start looking around.
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#2 – Find the right car.
How do you plan to use your vehicle? If you have a longer than average commute to work, you may want to consider vehicles with the best gas mileage only. If you have a family, you’ll want to ensure there’s enough room for everyone plus additional cargo space. Write down your “must haves” and then start searching online.
Once you’ve narrowed it down to a couple of options, consider going out to test drive them before purchasing.
#3 – Find the right price.
Do your research. There are multiple pricing guides out there, such as Kelley Blue Book, Black Book and NADA Guides that can help you understand what other people in your area are paying for similar vehicles. Manufacturer websites will also sometimes list any applicable incentives or rebates being offered for the car you want.
At the dealership, make sure you’re negotiating the price of the car and not just monthly payment, especially if you have a preapproval in-hand. Ask for a breakdown of any fees associated with the price you’re paying. And always be ready to walk if you’re not finding the deal you’re looking for.
#4 – Maximize your trade-in value.
Don’t assume the price a dealership is willing to pay for your trade-in vehicle is what it’s actually worth. Take the time to look up the trade-in value of your car to be sure you’re getting a fair deal. Plus, knowing what your vehicle is worth helps you negotiate the trade-in value to a price you’re comfortable with.
#5 – Hit the open road!