My Story: Buying a New Car
Tips on Trading in Your Car
How would you like to purchase your next vehicle without leaving your home? What if you could get the exact features you desire, the best interest rate available, and have dealers outbidding each other to get you the lowest possible price? What if unpleasant haggling and the disquieting feeling of getting rooked at car dealerships were a thing of the past?
All this is possible by buying a car online. Our family just purchased a new van by using our computer. We didn't have to leave home until we went to test-drive and pick up our new wheels. Since we did all the research and negotiating first, it was a simple matter to sign papers and finalize the deal.
It started when our eleven-year-old car started breaking down frequently. We assessed our needs and decided that a van would meet our requirements. I got three free copies of our current credit report by calling 1-800-685-1111. It is fully automated and takes about fifteen minutes.
To check or correct your score:
Don't be tricked by similar websites or phone numbers where you must pay to get this information. You are entitled to at least one free credit report a year, or if you have been denied a loan or credit application. Knowing where you stand can help tremendously in procuring financing at a reasonable rate. If you notice any inconsistencies or errors, write or call the lender to get it corrected. If you close any credit card accounts, make sure they note that it was closed "by customer request."
Now that you have your credit score straight, you can begin researching your chosen vehicle. Here are some helpful sites:
You can choose used or new. We began by researching used vans, but discovered that with the employee pricing, incentives, and a $2,000 rebate, it was actually cheaper to buy new. The Kelly Blue Book site also lets you compare models by price, features, make, dealerships, and many other factors. You can check out your estimated trade-in value, compare financing rates, and even compare auto insurance rates.
Knowledge is power. Once you have narrowed down the make and model you desire, you can get free price quotes in your local area. Two excellent sites are:
When you have a few quotes, you can contact your local dealers directly through e-mail or by phone. They are anxious to work with you and get your business, so they will work hard to get the exact vehicle you want with the features you need and in the color you choose. If they know that other dealers are "wooing" you, they will bend over backwards to beat the price.
After three days of fast and furious e-mails, we had it down to two dealers, one local and one in a neighboring state. The out-of-state dealer was willing to drive the vehicle to us at no extra charge and he was about $1,000 cheaper than the lowest bid. As I was heading out the door, a local dealer called with an even sweeter deal. They promised to match or beat their price, as well as get us the best interest rate and trade-in value.
I went in to "crunch some numbers" and left an hour later with a packet of signed papers and a delivery date. We got everything we wanted and more. (To seal the deal, the salesperson threw in a free tank of gas and doubled our trade-in value on our car!)
Before signing any financing contract, there are some questions you should ask. Is it a simple interest loan? Beware of "add-on interest" or the rule of '78. That means the interest is piled on at the beginning so the creditor is sure of collecting the maximum amount even if you pre-pay the loan.
That leads to the next question. Is there a pre-payment penalty? To avoid interest, you can make additional payments or add a little to each month's check. Make sure before signing that you won't be penalized if you choose to do so. I already have plans to prepay a set amount each year, so we will reduce our five-year loan to three years and save a lot of interest.
If you do not want your credit score checked while you are test-driving a vehicle, but the salesperson still wants your driver's license, photo-copy it (front and back) and black out your driver's license number. (Some states use your social security number.) Write on the copy "No credit checks authorized."
More and more consumers are buying or leasing vehicles through the Internet. Many dealers have one or more salespersons that deal exclusively with leads from the websites that I've mentioned. Smart buyers are doing their homework first instead of relying on dealers to be straight with them. Getting all the facts makes choosing the best deal as easy as 1-2-3.
I thoroughly enjoyed the process of researching and buying a car online. I would recommend this process for anyone considering buying a new or used vehicle in the near future. Your next car is only a few clicks away!
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