You need a savvy negotiating strategy and the right information to get the cheapest loan and lowest price on a new truck or car. A sales person will assume you do not have knowledge on the cost of the car their dealership is selling you when you go car shopping. They will also hope you do not know how much you should pay for a loan, whether any discounts are available or the amount consumers are paying for the same models. Without this information, you can easily end up paying more than you need to. There are some tips that can help you get most value for a car.
Know how much you should spend
Once you have made up your mind on the truck or car you want, start preparing for negotiations. Begin by finding out the cost of the car online. There are many sites that can give you an idea what the particular make and model should cost. Price calculators are available and give results after entering relevant data such as color, accessories and engines. When you are done, you will receive the cost of the car.
Make a choice on discount
If you have the option of choosing between low-cost financing and rebate, you need to choose the discount that will save you a lot of money. For example, let’s say you plan to borrow $18,000 over a period of five years and have to choose between two loans. 1% from an automaker’s finance company, such as GMAC or Ford Credit, and 3% from a bank you found online or offline.
If you choose the bank loan, your payments will total to $323 each month and you would have to pay $1,406 in interest during the period of the loan. If you decide on the discount financing, you would pay $307 each month and $414 in interest over the loan’s life. Now look at the difference between the total of the two loans. In the example, it will be about $1,000. If the rebate proves to be more, go for it.
Line up a loan
Some people do not want to take a discount loan from the manufacturer. To some, this may seem to be a wise move. However, it will all depend on several factors. If this is the case, you should look for the cheapest and most affordable way to finance the purchase of your car. The current survey of major lenders shows 4% is the average annual interest rate for three year, four year and five year month auto loans.
This means that unless you do not have above average credit, you should not have any reason to pay more than this. You should be able to easily qualify for a lower rate. You can get the best auto loan rates by looking at the scores of lenders offering their services in your locality and on the internet. Opt for a finance company or bank offering one of the best deals. Usually, you can apply over the internet and approval takes a few minutes or hours, with the most time being 24 hours.