Additionally, a credit rating that is far below-par indicates a person who has had difficulty making payments in the past, and that increased risk to the lender is reflected in the higher interest rate to the borrower. Remember, it's always wise to shop for the lowest-interest car loan before you make the deal. But if your credit rating is not good, you shouldn't be shopping for a new car in the first place. If you have a good credit rating, be sure to check what finance incentives the manufacturer is offering. But be aware that many interest-free financing offers may require shorter terms, which will result in higher monthly payments.
As tempting as a dealer's discount financing may seem, don't overlook deals from specialized providers such as Bank of America. A Bank of America auto loan puts you in the same position as a cash buyer, ready to purchase upon arrival at the dealership. When you walk onto the lot with financing in place, you won't face the same obstacles because you've done your legwork in advance. And since there's no obligation until you buy the car, you can assess your purchasing options against the dealer's best offer. Visit the finance section to learn more about smart financing. With low interest rates, an array of incentive options and the competitive advantage of online financing, you have more tools than ever at your disposal when it comes to making a smart vehicle purchase. WarrantiesChances are, an extended warranty or service contract will be offered to you when buying your next car. An extended service contract backed by an auto manufacturer is usually your safest bet. These contracts encompass a wide range of repairs and services. The repairs can be done at any authorized dealership and tend to be approved without a hitch. You won't pay a penny for approved repairs unless your contract includes a deductible. An extended warranty from an independent company could cost less than an extended service contract from a manufacturer. But the quality of this kind of contract varies widely from company to company. Shop carefully. Insurance RatesThe truth is, automobile insurance is a necessity. Several states require all vehicle owners to have insurance and be able to show proof of it. The type of vehicle you choose and the history of your driving record can have a profound effect on the cost of insurance. Typically, sports cars, high-performance cars, turbocharged or supercharged vehicles, those with larger engines and vehicles with four-wheel drive often result in higher insurance rates. Also, vehicles with histories of being stolen can demand a premium. Since it always pays to shop around, check rates with your insurance company before you buy your new vehicle. These additional expenses may be unavoidable, but they can also be negotiable and should be reviewed carefully before making your next purchase. As a result, you could save yourself a lot of money and aggravation in the years ahead.|Step 8: Sell or Trade Your Current Vehicle Like most do-it-yourself projects, selling your own vehicle to a private party can be cost-effective. In contrast, trading in your current vehicle at the dealership is certainly much easier. Before buying your next vehicle, consider the pros and cons of what to do with your current vehicle and make an informed choice. Trading -- Pros & Cons Trading your vehicle at the dealership may be quick and easy but it may not necessarily always be painless. The upside of trading is that the dealer does all the paperwork. After settling on an acceptable price, all you have to do is sign the vehicle over and be done with it. The price you pay for the convenience of being relieved of your vehicle will likely be less money for you than if you sold it yourself. Some people expect the dealer to give the full retail value of the vehicle and are often disappointed by the offers presented to them. Such people are being unrealistic. To avoid any surprises, be sure to get the Blue Book® Trade-in value of your vehicle before you go to the dealership. This number -- based on the condition of your vehicle -- is a more accurate representation of what you may expect to be offered. Keep in mind that, if the dealer is going to re-sell the car then it must assume the responsibility for preparing it for that eventual resale. This process usually includes mechanical and smog inspections, repairs to make the car ready for sale and providing some sort of warranty on the vehicle for the new owner. The dealer might also sell the car to a wholesaler, or at an auction, where dealers buy and sell cars from and to each other in order to balance their used-vehicle inventories and make them most appropriate for their respective dealerships.
For example, if you trade-in an old, worn-out pickup truck to a high-end import luxury-car dealership, that dealership is not going to put that truck into its used-vehicle inventory. So that truck goes to the auction. Trading can also help if you owe more on the loan than the car is worth. This is known as being "upside-down." The dealer can roll the remaining balance of your current vehicle's loan into the new loan, thus allowing you to trade in your vehicle without having to pay additional cash. While this is not advisable -- because it inflates the loan far beyond the new vehicle's actual value -- it is an option for a buyer who wants to get out of the current vehicle. And it will cost that buyer a lot of money.Selling--Pros & Cons Selling your car on your own can get you more dollars, but requires patience and good judgment. First, you will need to determine a fair asking price. Blue Book® Private Party value will give you a price, based on the vehicle's condition, for you to calculate the value of your vehicle in a consumer-to-consumer transaction. Be aware, you may have to absorb the cost of making the car presentable and passing any required state inspections or emissions tests. And remember, first impressions are important, so always keep the car clean, presentable and ready to be shown while it's available for sale. You must also figure what your time is worth, because you will need to be available to answer questions and make appointments for people to see the vehicle and take it for test drives. Another downside to selling your car yourself is that you may be contacted by some unsavory individuals, or people with whom you just don't feel comfortable. You need to have good instincts about people and have strong negotiation skills. If you do decide to sell your car yourself, be sure to put everything in writing and request payment in the form of a cashier's check. Personal checks can bounce and cash in large quantities is not wise to carry on your person. Generally speaking, points which will enhance the notion of selling the car yourself include: Is it a vehicle that's normally in strong demand anyway? Is it unmodified, thus appealing to the greatest number of buyers who, generally, don't want someone else's modifications? Is it in really good condition? Is your pricing reasonable? If you decide to sell your car yourself, there are several options available to advertise your vehicle to potential buyers.
- Advertise online with for free on Craiglist.
- Advertise online via a paid listing on eBay Motors.
- Advertise in local newspapers or printed selling guides for a more local audience.
- Place a Kelley Blue Book printed For Sale sign in the vehicle's window and park it in a highly visible area (see sample). Start by finding your vehicle's Private Party value, then click "Print For Sale Sign" when the final pricing report is displayed.
Points to Consider When Selling Your Car
- Make your car presentable. At the very least, a good wash and wax of the exterior and complete vacuuming of the interior is in order. If you really want to impress potential buyers, take the car to a professional detailer and have the interior, exterior and engine thoroughly cleaned.
- Sell your car AS IS: You are not a dealer and there is no warranty or return policy in effect.
- Try to have all service records complete and neatly arranged for your prospective buyer. This will instill confidence that the car has been well maintained.
- Be honest. Disclose any serious problems or repairs that might be needed to bring the vehicle to correct condition.
- Don't be offended if someone wants to have the car checked out by a professional -- in fact, take the vehicle to a shop before you start price negotiations.
- Set your asking price a few hundred dollars above what you really want. This allows some room to negotiate. And remember, just because you might think you "need" a certain amount of money from the sale is no reason at all to expect someone else to pay that amount. A car is worth only what someone will pay for it, on that day, at that time.
Quick Glance Trade vs. Sell
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Ride ComfortIs the ride smooth or harsh? How does the driver's seat feel while driving? Are there any unusual vibrations or jolts when you go over rough roads? NoiseDo you hear excessive engine noise coming through to the cockpit? Can you hear the wind coming through the windows? Or is there annoying road noise from the tires, or squeaks and rattles?Power/AccelerationHow does the vehicle respond when you push the accelerator pedal? Does it hesitate or lurch forward? Does the engine feel strong and smooth? BrakingWhen you apply the brakes, does the vehicle come to a smooth stop? Do you feel any vibrations through the brake pedal? Is the steering affected by the braking? Does the car stop in a straight line? HandlingIs it easy to park? Does it seem easy to maneuver? When you turn the wheel, does the vehicle respond in a predictable manner? Is the turning radius tight enough to make a U-turn? Are there any blind spots that hinder visibility? Your driving experience should back up the homework you've already done. If not, you may want to revisit your selection. Now that you've driven the car, you may finally be ready to make a solid purchase decision. Remember, your final decision will always include a certain amount of emotion, but the more homework you've done, the less emotional your actual purchase will be. Drive Off ...The good deal means different things to different people. With the help of Fair Purchase Prices, you can be confident that you are paying the best possible price. But remember, price isn't everything. Knowing what you want to accomplish is the other half of the battle. Before you close the deal, ask yourself:
- Did I purchase a well-built vehicle that meets my needs?
- Is it at a price I can afford?
- Is the price I paid a good value for the money?
- Did I fully understand and feel comfortable with the entire transaction?
If you have accomplished all those points, you have made a good deal.After a thorough check of your new vehicle and completion of the paperwork involved, you have become the owner of a shiny, brand-new car or truck or sport utility vehicle or minivan or whatever it was you wanted. Congratulations!