It Pays to Know These Car Buying Tips


There are few items that we purchase today where we can negotiate the price. Buying an automobile is one of those major purchases where we can spend some time dickering or negotiating with the car salesman in order to reduce the price, but there are a few things you should know about buying a car. These car buying tips will provide you with some insight into the buying process and how you can save several thousand dollars the next time you buy a vehicle.

Let me start with saying that most people put most of their focus on the purchase price of an automobile which is very important, but the price of the vehicle is only one way in which an auto dealership can make a very substantial profit. These auto buying tips cover the various segments of the purchase where you can control the amount of profit the dealership makes and the amount of money that you pay overall.

Car Buying Tips to Reduce Your Costs

To start off with the price of the vehicle is important and it can save you several thousand dollars depending upon the vehicle. For example a $20,000 car will generally have between $1600 and $2200 profit for the dealer if you would pay full M.S.R.P., but paying invoice for a car is very realistic which alone would save you between $1600 and $2200. Whether you are buying a new or used vehicle these car buying tips can save you a fortune by doing some homework before you visit the dealer.

The next part of buying a car that many people overlook is dealer financing. This car buying tip refers to having the dealerships arrange your financing based on your credit score. Lenders determine your interest rate according a tier system that raises your rate of interest, the lower your score the higher the interest rate. However it is not uncommon for the dealer to tell the buyer that they must pay a higher rate because of their score and then the dealer gets paid for the difference in the rate.

For example: the dealer may set up your auto loan with a 9% interest rate when you actually qualify for a 5% interest rate. Depending upon the amount financed and the term of the loan the dealer could profit by several thousand additional dollars, regardless of the price of the automobile. That’s a hefty profit that you could avoid paying if you know your tips for buying a car.

The third area where an automobile dealership can make a hefty profit is what I call add-ons and an often overlooked area when it comes to car buying tips. These add-ons consist of accessories, undercoating, rust-proofing, paint protection, fabric protection, extended warranties, service contracts and other similar items. Some of these items might be things you would like to add to your vehicle purchase, but they are all negotiable. Profits on some of these items can be as much as 65%, but with some research and negotiation they can be had for a fair and reasonable price.

Doing some research and learning more about these automobile buying tips really can save you a bundle when you buy a car. An auto dealer can make a very nice profit in each one of these areas and it can increase you overall cost by many thousands of dollars. So you can how it pays to know your car buying tips.

This article on car buying tips was written by James Klark that works in the auto sales industry and helps educate consumers about the steps to buy a car and how to save a bundle at the car dealership. You can learn more tips for buying a car, from buying, financing and avoiding scams when you buy a car at his blog and website including the car buying steps to save big money.

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