While most people are aware of common dealership scams, less experienced buyers may fall prey to their tactics. When selling a new or used car, dealerships profit in two ways. They profit from the sale of the vehicle, and from the interest paid by the buyer.
Hence, a universal goal of most dealerships is to trick buyers into paying more money for their car.Dealership Mark-Ups.Car dealerships have a tight relationship with certain finance companies.Thus, the dealerships will likely encourage buyers to use a specific finance company. If possible, secure your own financing with a bank or credit union. Because dealerships also profit from the interest paid, the in-house finance company may increase the loan rate by a few points.
The difference paid is received by the dealership.Dealership mark-ups can be avoided by simply comparing auto loan lenders. Do not accept the first loan packaged offered, and never accept dealership financing without shopping around. Request a no-obligation quote from an auto loan broker. This way, you acquire multiple quotes from honest lenders.
Upside Down Auto loans.In an effort to finance everyone, some dealerships offer crazy loan packages.This might include zero down loans, extended loan terms, etc. While these options sound appealing, and they may help you afford a nicer car, keep in mind that car's lose their value quickly. Thus, avoid long finance periods.
If possible, attempt to have the car paid off within four years. Also, save money for a down payment.Failure to Negotiate on Car Price.
When buying a new car, never pay sticker price. Experienced buyers know how to negotiate a better price and interest rate. On the other hand, some dealerships take advantage of inexperienced buyers by failing to negotiate.Everything can be negotiated. Therefore, if you feel that the dealer is offering unreasonable terms, walk away. For a list of reputable auto lenders, visit www.
abcloanguide.com.Pushy Car Salesmen.Car salesmen have smooth tactics.
However, do not fall victim to their fast talking and pushy sales approach.In some instances, the buyer may have to take control of the conversation. Keep the focus on the price of the car, trade-ins, and finance options. Furthermore, read all loan agreements before signing..View our recommended providers for a Car Loan Quote. ABC Loan Guide also has a list of service providers who give Credit Repair Advice.
By: Carrie Reeder