How to Tell if You're Getting a Good Deal on a Car
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Car sales people can be intimidating. They're known for being incredibly driven and competitive when it comes to scoring a sale. Many people feel they will sweet-talk you and try to persuade you into a deal that might not be the best for you.
But, an informed consumer is hard to trick! With the right tools and strategy, you can feel confident knowing you're getting a good deal. Here are five things you should keep in mind when evaluating a deal to buy a car.
1. Be Informed Before You Start Talking Price
When it comes to being an informed consumer, the internet is your friend. Before agreeing to any deal on a new or used car, research different quotes and prices that can give you a good idea for an estimate. Websites such as Edmunds even allow you to see what people around your area are paying for cars. With this information in your back pocket, you'll be able to assess when a quote is unreasonable, and use the information as leverage when you go car shopping.
2. What You Should (and Should Not) Try to Negotiate
Many people think that you should negotiate a car based on the monthly payments. This is not the best idea. You should always negotiate based on the car's full price, since monthly payments are influenced by several things, making it hard to determine actual value. Based on your research, you should know what to shoot for, and you can always pin dealerships against each other to see which one of them is willing to offer the best deal.
Another thing you might be able to negotiate is the interest rate. Take some time to explore different options for auto loans, and make sure to get approved before hitting the dealership. This way, you will have room to bounce some quotes with the dealership.
3. Beware of Hidden Costs
If you manage to get an excellent quote to the point where it's suspicious, look for the hidden costs. Some dealers will bend at your request but then try to recover the money in other areas. Things to look out for include:
Trade-in price: When you sign the contract, you might be signing yourself into a very low trading cost that could make you lose some money down the line.
Add-Ons: The sales associate will try to sell you many add-ons for your car that, while indeed nice, might not be necessary at all.
Extended warranties: Your contract might include the sale of an extended warranty, which you may not want.
4. Watch Out for Extra Fees Related to the Purchase
It's typical for car dealerships to charge some fees associated with a car purchase; however, sometimes they can try and sneak high or unnecessary charges to unsuspecting customers. These are some of the standard and acceptable fees:
Tax: These are entirely standard and will also vary by state.
Documentation charges: The price for the preparation of your documents. Some states regulate the cost of these documents; make sure to research the average price in your area.
Registration: The fee for registering your car in the DMV.
Some dealers will try to add their own fees to the contract. Read through the document, and if you see a charge you don't recognize, ask for the reason behind it; this can give you a bit more insight into whether or not it is a reasonable fee to pay.
5. The Bottom Line When it Comes to Getting a Good Deal
Buying a car is an important decision, one that you should not rush. Take your time getting to know your options and exploring the market, because getting the best deal you can make the extended purchase time worth it.