liirogue:
Your credit score is reallly irrelevant, unless it’s a disaster. Most automakers will be more than willing to sell you something that is WAY more expensive than you can really afford. They’ll happily finance it, too.
More important: How much money can you afford for a car payment? What’s your disposable income?
Bear in mind that buying new is a FAR more expensive way to own a car than buying a vehicle that’s four or five years old. The best ‘bang for the buck’ can probably be had by buying a used car that still has a year or two of its original warranty left on it. For two reasons: One is that cars under warranty get maintained better than cars that aren’t - people follow factory oil change schedules, and issues get dealt with before they turn into serious problems. And two, you still have some warranty left if you discover some nasty surprises.
If you want to buy new, that’s fine - I just bought new myself. But be aware that you’re paying a pretty hefty price for the privilege.
Anyway… Here are some more hints when shopping for a new car:
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Negotiate everything individually. Don’t let the dealership talk you into a package price including your trade-in, financing, rebates, etc. They’ll offer you a great deal on the car, then stiff you on the trade-in. Or they’ll offer you a great trade-in, then stiff you on the car price. So negotiate the price of the vehicle first. If they ask you if you have a trade-in, say “I don’t know yet. I may sell the vehicle privately, or keep it for my husband. I’ll worry about that later.” If they ask you if you are financing, say “I haven’t decided yet. I just want to negotiate the price of the car first, then I’ll decide.”
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NEVER negotiate based on monthly payments. If the salesman starts by saying, “How much can you afford per month?”, say “Whatever I need to pay. I’ll worry about that after I choose the car I want.” A standard trick is to get you to name what you think is a low number - “I’d buy that car if I ccould get it for $350/mo”. Then they’ll look concerned, and say, “Well, that’s a little lower than what I thought we could do, but let me talk to the manager.” Then he’ll go away, come back 15 minutes later with ‘great news’. They need to make quota, and they’ll willing to do a special deal, yada yada yada. They’ll have documents drawn up for a monthly payment of $349. Then you read the fine print later, and find out that you paid full retail for the car, and your payments were lowered by financing it out over 84 months or something. Then you’ll get killed twicce - once with a high purchase price, and again with huge interest charges.
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When you agree on a price, make sure the salesman puts down, IN WRITING, “No additional fees”. After you agree on a price, the dealership will write up a bill of sale and add on all kinds of extra fees, like dealer prep, documentation, etc. They’ll tell you that this is standard, and that everyone pays it. This is a crock - these things are added to pad the dealer’s profit. I just saved myself $1,000 dollars this way. I had to fight with the manager, who claimed I had to pay it. I just kept pointing to my original contract and saying, “What part of, ‘no additional fees’ do you not understand?”. When he insisted, I threatened to walk out, since my sales contract was void. I got the fees deleted.
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NEVER buy the factory ‘protection plans’. Undercoating, scotch-guarding, special clear coat on the paint, etc. These are a huge rip-off. Often, the dealer will make more profit from the protection package than they make on the vehicle. Buy a couple of $20 cans of Scotch-guard, spray the interior, and you’re done. That’s about all they’ll do anyway. Ford tried to sell me undercoating, cloth protection, and ‘special clear coat to protect the paint’ (i.e. wax) for $995. After I refused, they STILL wrote it into the sales contract. I told him I wouldn’t sign until they removed it. They removed it.
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Most extended warranties are also a waste of money. They offer very little extra coverage (how little is only apparent if you read the fine print), they cost a bundle, and they don’t kick in until after the factory warranty is over, even though you have to pay for them NOW. Ford wanted to charge me $1200 to extend my warranty from three years to five. If I put that $1200 in a mutual fund earning 10% (the historical average), then by the time my warranty runs out I’d have $1600 in the bank to pay for whatever happened. The chances are, I’ll come out WAY ahead - probably with $1800 in the bank at the end of the 5-year extended warranty.
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Go into negotiations prepared. Know the Kelly Blue-book value of your old car, and know the MSRP and Invoice cost of the one you are dealing on. In today’s economy, there is no reason to pay anything over invoice for your car. Don’t let the dealer tell you that invoice is their ‘cost’ and invoice +500 means they are only making $500. Dealers get kickbacks and incentives from the factory, and even at invoice they make reasonable profit. You can get all this info at Edmunds.com
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Don’t get married to the vehicle you’re looking at. Always be prepared to get up and walk out the door if the deal isn’t right. There are lots of great cars out there. It’s a buyer’s market.
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Sell your other vehicle privately. If you negotiate prices separately like I recommended, I think you’ll be shocked to find out just how little the dealership is willing to give you for your car. They like to negotiate the trade-in with the price of the new vehicle so they can make it look like they’re giving you good value for your car. If you succeed in negotiating a near-cost price for the new vehicle, they’ll probably offer you thousands less for the old one than you could get on the private market (unless it’s a beater, in which case it won’t matter).
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If you’re offered a deal, get it in writing, and then tell them you’ll think about it overnight. Don’t let them pressure you into signing on the spot. Then come here and tell us the offer, and we can help you out.
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I hate to say this, but… take your husband along. In my wife’s experience, many car salesmen treat women like idiots, and make it twice as painful for you to get a great deal. If you do go by yourself, impress him with your knowledge right off the bat to save you both some time.
Hope this helps!
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