Purchasing a new vehicle is exciting, especially if you are able to treat yourself to something newer than what you had in the past. However, the dealership experience can often be unpleasant, especially once you sit down with the finance person. Here are 10 things you need to check before you go car shopping.
No. 10 – Know your credit score
Unless you have a cashier’s check or a wire transfer ready to pay the cash value of the vehicle, you will have to deal with the lot’s finance person. This is when it’s big to know your credit score. You can go into the dealership thinking that you have a decent score only to have the finance person tell you a different number. This will affect your rate and payments. If you know your score, you can plug it into sites like Autotrader or Edmunds and get an idea of what you will pay monthly.
No. 9 – Know your trade-in value
If you are heading to the the dealership, it’s possible that you have a vehicle to sell as part of the deal. This is when it’s critical to know the value of your trade-in. A dealer is never going to offer what the vehicle is worth. They will likely go well below the true value.
For example, they may offer only $500 trade-in value for a car that Kelley Blue Book says is worth $2,000-3,000. If you know your value, you can deliver that information to the dealer either verbally or with a printed off copy of the KBB page. If the dealer still doesn’t offer a solid value, you can always sell your car to Carvana, Carmax, or any number of newer competitors in the market.
No. 8 – Know your state’s regulations
Every state is different; The country does not have a set number of guidelines. This is something we learned the hard way over the past few weeks. Some states, such as Montana, have simple title and registration fees. You can renew your tags annually for a low price, or you can purchase permanent registration if your vehicle is old enough.
North Carolina is a different beast. This state has an annual registration fee, and an annual “property tax” based on the car’s value. This is an extra cost to remember in the long run.
No. 7 – Know the real sticker price
“This car is available at the low, low price of $30,995!” Sure, that sounds great on paper, but is that the real sticker price? All too often, a dealer will advertise a special price on their website only to charge more on the lot. This is when it’s crucial to look at the fine print on the website. Sometimes, the advertised price is only for veterans or active military members. Sometimes, it’s only available to those who finance the vehicle through the dealer.
No. 6 – Know the dealership’s ‘hidden’ fees
Part of knowing the real sticker price is knowing what the dealer will charge you as part of the sales process. Sure, it’s great that the dealer will handle the title and registration so that you don’t have to go to the DMV, but the downside is that they will charge a considerable amount for this service.
They don’t traditionally list this in a noticeable area. This information is usually in the fine print somewhere on the listing. It’s important to know that the dealer could add anywhere from a few hundred to a few thousand dollars in service fees.
No. 5 – Know the limits of your budget
With so many price uncertainties, it’s important to know the upper limit of your budget. If you can’t afford more than a certain amount of money, you have to know that the price of your new/used vehicle won’t surpass this number after all of the fees.
This may also mean that you have to compromise a little on your purchase. Maybe you want a brand new Chevrolet Silverado 1500 in the Trail Boss trim, but it will be too expensive with all of the fees. In that case, it might be better to opt for the LT or a less expensive trim.
No. 4 – Know the current interest rates
This is key when sitting down at the dealership. Know what the current loan interest rates are available for car purchasers and whether they change based on location. This is when it could be beneficial to talk to your bank about a potential car loan. They might give a better interest rate than the company selling the car, which could lead to hundreds of dollars in savings.
No. 3 – Know your backup vehicle
Sometimes, you head to the dealership with the perfect vehicle in mind. You want that pickup, sports car, sedan, or van only to find out that it is gone. Another interested party swooped in minutes before you arrived and purchased it. Instead of letting the salesperson pressure you into a vehicle you may not necessarily want, have a couple backup options selected that are in your budget. Maybe that Civic Si is gone. In that case, turn to the Civic Sport or another vehicle that checks some of the boxes on the list of desired details.
No. 2 – Know the add-ons you want
Many dealerships offer extra services that can increase the purchase price of the vehicle. Some are worth the money, such as a few year’s worth of free oil changes and regular maintenance. Others, however, are just ways to get the dealership some money. Know which add-ons are available at the respective location and which ones you want to purchase before heading there.
No. 1 – Know how to say ‘No’
An unfortunate part of the dealership experience is the upsell. The primary salesperson may be great to work with, but they will inevitably give way to someone else who will put on the pressure. This could be a sales manager, who “just wants to check in.” It could be the finance person, who repeatedly badgers you about purchasing extended warranties while filling out paperwork. It could be easy to falter under pressure, but know how to say “no” when it comes time.