4 tips to ensure you're getting a great price on your next car

4 tips to ensure you're getting a great price on your next car


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Whether you're an avid car guy who loves the smell of new leather, or just tired of your old clunker rattling at every stop light, spring is a great time to go car shopping. Before you start hitting the lots, however, it pays to plan in advance. Here are four tips to help you get the most for your money.

1. Know how much car you can afford

Instead of finding a car and then rearranging your budget to fit, let the amount of money you have available determine what kind of car you can afford. Your "available cash" is made up of three things:

  1. Cash you have for a down payment
  2. Cash from a trade-in (this may be after paying off an existing loan)
  3. The amount of "cash" your monthly payment will buy you. For example, if you can afford to pay $200 a month for 48 months, you have $9,600 "available cash" An online loan calculator is a great way to help you determine the total amount you can afford. Then stick to your budget. This is your best defense against pushy salespeople who may try to pressure you into making budget decisions that favor them instead of you.

2. Don't pay more for your car than is necessary

Whether you have good credit or less-than-stellar credit, there are ways to ensure you're not paying more than you have to. Pre-approval through a financial institution will often help you get a lower interest rate than you can get if you finance at the point of sale. Plus, be careful of zero interest deals. Such deals may have hidden fees or restrictive terms that may end up inflating how much you pay for the car in the long run.

3. Do your homework first

So you know what you can afford and have the financing in place, now you just have to find the right car. Before you go to the showroom or car lot, find out everything you can about the year, make, model, and market value of the car you are interested in. Online price guides such as NADA Guides or magazines like Consumer Reports are great research tools. A salesperson's goal is to sell you a car, not necessarily to educate you about a car's safety, reliability or resale value. Coming prepared will help you make the right decision when lured by shiny wax and gleaming hubcaps.

4. Learn to negotiate

If you don't do it often, negotiating the price of an item can take you out of your comfort zone, but to get the best price you'll need to brush up on those bargaining skills. This is where all your homework and planning comes in handy, because you'll know the numbers and what you can afford.

  1. Start with a low but reasonable offer and only raise it in small increments
  2. Be prepared to walk away from the deal if you don't like it
  3. Most important—remember a deal isn't a good deal unless you get the car you want University Federal Credit Union is a member-owned financial institution open to anyone who lives, works, volunteers or worships in Salt Lake County. Federally insured by NCUA.

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