6 Tips for Getting the Best Car Deal


If car incentives motivate you to start shopping, here are a few tips to help you get the best deal:

1. Get a preapproved loan before you go to the car dealer. This ensures that you'll know your budget, thus preventing any embarrassment of shopping all day only to find you can't get credit. It also may help you negotiate a better deal with the car dealership, said auto consumer publisher Edmunds.com analyst Jesse Toprak.

For example, if your bank offers you a $30,000 car loan at 7 percent and the car salesmen offers you a deal at 8.5 percent, you know you can get a better deal at your own bank. Without the preapproved loan, how would you know whether the dealer's 8.5 percent is a good deal or not?

"Preapproval gives you leverage," Toprak said. "If the dealership can get you a better rate, and often they can because they have wholesale deals at a bank, it may save you money."

2. Know your credit score beforehand because it could determine which loan rates you're qualified to receive. You can get a free credit report once a year at a Web site set up by the three major credit reporting agencies. The companies do charge a small fee, around $8, to provide your credit score.

3. Research the value of your current car if you're looking to trade it in. It's the only way you'll whether the dealer is offering you too little.

4. You'll likely be offered a low interest rate — as low as zero percent and frequently 2.9 or 3.9 percent — or cash back, which will range from under $1,000 for some models up to $10,000 for lower demand large trucks or SUVs. Generally you'll want to take the lower interest rate if you plan on keeping the new vehicle for three years or more. If you're likely to get a new car more frequently, you're probably better off taking the cash and getting financing at your credit union or bank, Toprak said.

5. Many times the sales person will begin by asking you what you want to pay per month and attempt to negotiate a car deal based on that amount. It's better to negotiate the deal based on the price of the new car and the trade-in value of your car .

6. Make sure you read the contract before you sign it to avoid paying any extraneous fees you may not have agreed to.

Copyright 2009 The Associated Press.

Show Comments

Back to Top