For most of us, purchasing a car is the second largest purchase we will ever make, second only to a home. However, we often don't invest the same amount of time to make smart choices for us and our budget. Financial expert, Rachel Langlois with Cyprus Credit Union stopped by to discuss what things you should consider when actually going to the car dealership. For more information, click here.
1. Know your budget and come with a pre-approval offer.
a. Communicate this information with your sales representative. Be firm with your budget, your monthly payment and total cost budgets. Do not let an emotional purchase equate to months of financial stress.
b. Pre-approval is power, it will help you receive the best interest rate possible. Most dealerships will be able to match your approved rate, or can possibly get a better rate through their relationships.
c. Calculate what you can realistically contribute to a down-payment.
d. Decide if you are going to trade-in your car or sell privately. Research to know what your car is worth for either option.
2. Take the time to test drive.
a. 1 out of 6 purchasers didn't test drive their vehicle and one third only drove for 10 or less minutes. Be sure to test at highways speeds as well. Many dealerships will let you borrow the car for a certain amount of time to get a feel of how it would work into your lifestyle; do you like the cup holder placement, will it fit your carseats easily, is there enough trunk space.
b. This isn't like a pair of shoes, you can't easily return it if you decide you don't like it later.
c. Compare competitors. If you're upgrading from an older model, any new car will feel good, be sure that you test drive comparable models to get a feel for what you want.
3. Shop more than one dealer.
a. 40% of car shoppers only go to one dealership. Different dealerships may be running promotions you could benefit from.
b. Even if you think you are getting a great deal, it doesn't hurt to compare to confirm.
c. It`s easy to check online shopping sites.
4. Don`t feel like you're imposing.
a. Don't feel bad asking to test drive multiple models. That's what they are there for. If you want to have more time with an associate, consider going during a slower time, such as during a weekday.
b. Don't make a quick decision because you feel pressured or feel bad letting down a salesperson.
5. Prepare for the fine print.
a. Think about what extras you want beforehand (such as replacement key insurance, extended warranties or fabric protection).
b. Read the fine print. Know what you are signing. This can be a confusing part of the process, consider having a partner there to help you make decisions and hear what is being explained.