Hings everyone should know about Shopping in used Car Lots
Just the idea of buying a car can give most people a migraine, dreading the whole experience. It would be nice to have the money to just show up at a lot and say, “I want that one”, hand them the cash and drive away, but it’s not that simple. No, for most of us there are a lot more involved like, finance companies, down payment, budget, and the credit score. It’s not the greatest experience in the world, but it’s something that we have to deal with if we want to buy a car. There are a few things that you will want to know before heading out to buy that car that you’ve been wanting.
The most important thing that will decide your buying power is your credit. It’s important to know about what your credit score is before trying to purchase a car. If your score is over 650 and you don’t have any repos on your credit, then you have a lot better chance of getting the car you want, at the price you want. A higher credit score will yield lower interest rates, longer financing terms, and lower down payments. On the other hand, if you have a low credit score, everything is just the opposite. You are a higher risk to the finance company if your score is low, and it will be harder to get the car you want with the terms that fit you.
A “Buy Here Pay Here” lot is an option for people with bad credit, or low credit scores. I wouldn’t recommend them, but sometimes it can be the only option. This kind of lot will finance anyone and everyone, no matter what kind of credit you have. They typically hold the note themselves and take on all the risks that a finance company turned you down for. The note on the car is eventually sold to a secondary finance company that will take over the remainder of the car note, and you will pay them for the remaining terms. You might find the type of car you want at a lot like this, and maybe even the right color, but it will probably have a lot of miles on it. You will want to throw the Kelly Blue Book out the window when shopping at this kind of car lot. The price of the car will be higher than it’s suppose to be, and the finance charges will be the max the law allows, but it all goes back to credit. They buy cars at the auction that regular car lots cannot get financed through a bank because of the mileage, or the year of the car.
It’s a good idea to have a mechanic that you know and trust look at a car before you buy it. You can never really tell just by looking at a car, but they can probably tell you about things that they look for in that particular car. There is usually something that this car is known for, or something that they’ve seen a lot of that they can warn you about, or even check it out for you in just a few minutes. They can also check out wear and tear items like the brakes, tires, and belts. These are items that are sometimes overlooked when buying a used car because you’re looking at bigger things like the engine, but can add up being costly if you’re not careful.
Okay, you’ve found the car that you want, it’s used, and your credit score is decent, so let’s negotiate. This is the most painful part of the whole car buying experience, and will take the most time. The sales man will sit you down at a table with a piece of paper, sometimes using what they call a four square. He will write down the price of the car, what you want your payment at, and then how long you want to finance it for. He will then take that paper to the finance manager and run it by him, and he will make changes to it based on what he thinks the bank will approve. This will probably go on for a while since they never write down anything close to where you want to be. Just keep in mind that you have to stick to your guns and the numbers that you had in your head. The last thing that they want to see is you walk out that door without the deal being done. Car lots will sometimes lose money on a deal just to move a unit depending on what kind of month they’ve had. When they’ve ran back and forth a hundred times, the numbers are close, and then you make the deal.
The final step is signing the papers on your car, and that’s where the closer comes in. There are a couple of things that the sales person didn’t tell you when they were running the numbers with you. He didn’t mention extended warranties, gap insurance, or anything else that the closer is about to add to the deal. Your payment just went up and you are no longer in your budget, but they will try and sneak it in on you. I’m not saying that you don’t want those things or need them, but keep them in mind before you make the deal with the salesman. You will have to add those on to your payment in your head, because the salesman will not usually tell you about them. These things might only raise your payment 40 to 60 dollars, but that’s a lot of money over the term of the loan.
Used car buying can be a long painful process, but don’t do something stupid just to end the process. Don’t buy the first car that you see, or the first deal that you’re presented with just because you’re frustrated. You don’t want to cringe every time you get into your car because you made a bad deal, or strapped yourself with high payments. You want to buy a car, not be married to it, and if you make the wrong decision on a used car, that’s exactly what you’ll be, married to it forever.
