| If you want to buy a car with negotiating power, | | | | amount you are able to pay each month for a car |
| you need one thing - cash in hand. | | | | payment. You tell them "around $400/month". The |
| Have you ever heard the saying: "money talks"? | | | | salesperson goes in the back "to talk to the |
| What this means is that when you have money, you | | | | manager" and returns to tell you that you are eligible |
| have the power to negotiate. Apply this to buying a | | | | for an auto loan at an interest rate of 10% and a |
| car, and you will have great leverage for negotiations. | | | | payment of $425/month for 5 years (60 months). |
| The problem is, you don't have thousands of dollars | | | | They ask if this payment is okay with you. Excitedly |
| just lying around that you can use to buy a car, | | | | you say yes, they write up the deal, and you drive |
| right? Of course you don't. But it does not mean that | | | | off in your new car with a monthly payment of $425. |
| you can't get it. All it means is that you need to get | | | | Not bad right? Wrong. |
| your auto financing together before you go to buy a | | | | What they did not tell you is that your 5 year loan at |
| car. | | | | the 10% interest rate was for a loan amount of |
| The Best Way To Buy A Car | | | | $20,000 - giving you a monthly payment around |
| Most people fall in love with a vehicle before they | | | | $425... But the car was on the lot for $15,000, right? |
| have any clue about how they are going to pay for | | | | Well, originally it was. Yet you were tricked into |
| it. Then, they fall victim to the sales person doing all | | | | paying an additional $5,000 that is now hidden in your |
| the work to find financing. This is the way I used to | | | | monthly payment. And where does that extra $5,000 |
| do it, and the way it is usually done. | | | | go? It's simple. It goes right into the dealership's |
| The problem is, when you let the sales person handle | | | | pocket. It's a shady practice, but it happens every |
| your auto financing you are giving them too much | | | | day. |
| control over the bottom line cost of the car. When | | | | If you had secured your car loan financing ahead of |
| the car dealership starts negotiating the price of a | | | | time, you would have been able to get the $15,000 |
| car with you, most times you will be asked what kind | | | | car for $15,000 and not a penny more. And guess |
| of monthly payment you can afford. What you will | | | | what else... the monthly payment on $15,000 at the |
| not be asked is how much you want to pay for the | | | | same 10% interest rate, for just 4 years (48 |
| car. The amount of monthly payment you can afford | | | | months) is only $380.44. This is less than the $400 |
| and the bottom line price of the car are two | | | | month that you wanted to spend - and you will pay |
| different things. By letting a salesperson know how | | | | your car off a year sooner! |
| much you can pay, you are allowing them to add | | | | As you can see, by having your car loan in order |
| money to the bottom line price of the car. The | | | | before you go shopping is the best way to buy a |
| following is a classic scenario: | | | | car. If the car is already financed, dealerships will |
| You fall in love with a $15,000 car and you sit down | | | | never walk away from cash in hand. |
| with the salesperson to figure out how you are going | | | | Ken S. |
| to pay for it. The salesperson then asks you what | | | | |