• Don't be a monthly payment buyer. Car salesmen assume that young buyers will have to take out a car loan to make a deal. So, when you sit down to negotiate, the first thing they're likely to ask is, "What do you want your monthly payment to be?" The way to avoid having to answer this question is to get pre-approved financing at the credit union. Click here for the online application. This is valuable for several reasons. It forces you to confront any credit problems before you ever go near a dealership. It will also ensure that you get the best interest rate you deserve. Finally, it keeps negotiations simple. So, when they ask what kind of monthly payment you want, smile knowingly and say, "I'm a cash buyer — let's just talk about the cost of the car.”
• Check Your Wallet. Determine your budget and stick to it without violating the first tip above. If you are financing a car, find out exactly how much you can afford to spend on a monthly basis. Do the calculations before you go shopping. You can click here for our "Estimate Amount You Can Afford to Borrow Calculator". You can get pre-approved with the credit union (click here for the online application) to find out what your interest rate will be or enter an estimated interest rate. Enter the bi-weekly, semi-monthly, or monthly payment you can afford and it will calculate the total amount you can finance. When you go shopping just ask what the drive out price is. The drive out price includes tax, title, and license fees. You can estimate the drive out price by adding seven percent of the price of the vehicle.
• Don't shop on the weekend unless you have to. Weekends are when everyone goes car shopping. But when there is a lot of foot traffic at the dealership, two things happen: The service isn't great and the price of the cars stays high. If you don't buy the car for their price, they reason, someone else here will. But on Monday the weekend seems awfully far away for most sales managers. They like to keep the cars moving off the lot. So, take a day off from work and enjoy a stress-free shopping experience that will save you money
• Ask for the fleet department or call them before you go. Most all dealers allow credit union members access to the fleet department. The salesman that greets you at the dealership has to make their monthly salary on the few cars they sell a month. The fleet department can sell the same vehicle cheaper because they sell hundreds of vehicles a month.
• Dress to un-impress. It's hard to convince someone you can barely afford to pay invoice price wearing diamonds and designer duds. "Never dress up," says David Thomas, editor at Cars.com.
• Leave the Lexus at home. Don't arrive in a Mercedes, unless that's all you have or that's what you're trading in, says Thomas. If the salesman surmises you have boatloads of money, he's not going to go for your lowball offer.
• Don't rush. You can avoid high-pressure tactics by letting the salesperson know you don't have to buy the car today. You want them to think you have all the time in the world and if you wait and get the credit union involved you will save hundreds if not thousands of dollars. You can always leave your phone number and come back later. Don't sign anything just because you're tired or it's easy to do everything there.
• Don't hand over your driver's license. Some dealers like to hold you hostage by keeping it while the salesman tries to wear you down and get you to sign a contract or -- if nothing else -- keep you from going elsewhere. Before you go, make a few photocopies of your driver's license that you can hand out and write "no credit checks authorized" across the image to protect your credit score from damaging inquiries.
• Don't trade in a car you owe money on. Most likely, the balance of your loan will be rolled into the new car's loan amount, piling the debt of two cars onto your plate. Even if that's not the case, you'll have less bargaining power if the dealer has agreed to pay off your old car loan. Pay off one car at a time or refinance the old car loan. If you insist on doing this, at least get the details in writing and give them no more than 10 days to pay it off.
• Don't sign anything at dealership until you come back to the credit union. The dealership may tell you that they are beating the credit union's interest rate to get you sign the loan contract, but they may be over charging you for the vehicle to offer the lower rate. Ask for a write up of the cost of the vehicle including options. Bring the options list and write up to the credit union and we will book out the vehicle. We often find the we can save our members hundreds if not thousand of dollar! Once you sign the contract at the dealership they will not lower the price!
• Above all, remember your right to say no.
• If the dealer won't budge from an unfair deal, you can always leave. There is good chance they will call you tomorrow with a better deal or you find a better deal.
