How to Get the Best Deal on a Car

When going into a car dealership, there are several things you need to know before you take on that new car and the auto loan that goes with it. Car dealerships are all about closing the deal, so the first time you walk in there you want to be prepared so that you don’t walk out with a car and an auto loan that you don’t really want.

You have to ensure that they don’t rush you into something that you don’t really want. If they are helpful and don’t push you into anything, and you really do like them, ask for their card. Don’t sign any papers for a car loan, or anything else, simply ask them for their card and tell them you will be back. When you come back, ask for that particular person. And conversely, if you didn’t car for the salesperson, when you come back tell them you won’t work with them or you will go somewhere else with your business.

Watch out for something called “dealer reserve” which is the amount of money that a dealer will try to put on your car loan. They get money for arranging the auto loan, and depending on how much of a risk you are, the lender will approve the car loan or not. The lender approves the “buy” rate, and then the dealer will add to that rate on the auto loan. This amount is a large portion of their profit, and can be additional percentage points that they put onto the auto loan.

It is completely legal, and you will end up paying for it on your auto loan. It is also something that you can negotiate when haggling over the price of the car loan. Remember, as in anything, if you don’t like the terms of the deal, don’t take the auto loan. You can always go somewhere else, or better yet – go to a credit union or bank and get a personal loan and pay cash for the car at the dealership itself.

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