The are 4 questions to ask when you are buying a car or else you may end up paying too much for the car, or getting ripped off. Car salesmen are trained daily to divert your attention from these basic, but important questions. They even may seem elementary, but in the heat of the negotiation, you may not know all of the answers.
What is the price of the car? – Seems basic, right? Well, car salesmen are trained to keep a customer’s mind off the actual price of the car and onto the payment. If the salesman can get a commitment on the payment that a customer is willing to pay, the actual price of the car becomes a variable that can be adjusted at will.
What is the interest rate? Or better yet, what is the interest rate that I qualify for? – If you get to the point in your negotiations and agree on a payment, you may be surprised at what the interest rate is that the dealership is charging. This is because dealerships get paid on the reserve, or spread between what rate they sell to the customer and what the bank buys it at.
What is the term of the financing? – So many times, a customer will agree to the negotiated payment on a car and not even realize how long the term is for. A $500 payment for 60 months is drastically different than a payment for 72.
How much did I get for my trade in? – Used cars is a great profit center for dealerships and trade ins are the gravy! They will try to “steal” the car you are trading in so that they can resell it for a profit. The lower they give you, the more they can make on the resale.
These 4 questions to ask when you are buying a car will allow you to understand how good or bad of a deal you negotiate. If any of these answers are missing, you run the risk of being scammed by the car dealer and paying too much.
