Did you ever have the experience that you walked into a car dealership, stood your ground talking them down to the price he had in mind and then congratulated yourself for being a great negotiator? While it is possible that you are, lots of people every day are fooled when they bring a car dealer around to a price they are comfortable with. That’s because car dealers like to yield on sticker price and then make it all back and more with a complicated deal on a car loan that few people are likely to be able to understand. How do you negotiate for a great price on a car as well as low interest car loan? Let’s look at a few of the best practices there are for the best in car loan negotiations.
The mistake that most people make with a car loan is that they don’t think about it until they head in to a dealership and select a car. You don’t want to the dealer to know that you have your heart set on a car you can only get for him. Car dealerships consistently rate as one of the worst places to go to for a low interest car loan. Online banks and small banks are infinitely better. And credit unions usually charge far lower than even that. Once you have a loan approval from one of those people, they’ll hand you a blank check that’s good for anything up to a certain amount. Head into a car dealership with a check in hand and ask them to beat it if they can. It’ll improve your chances of snagging a great low interest car loan.
Each time you apply for a loan, your credit score takes a dip. It doesn’t even matter that you actually take out a loan for it to dip. The very act of applying does it. That makes your next loan attempt that much more expensive. Make sure that you make all your loan inquiries and applications within a 15 day period. That way, all your applications will count as one loan, and you won’t be damaging your credit score and shooting yourself in the foot. In the end, make sure that you make inquiries by the total loan amount that you wish to take out, and not by how much you wish to pay each month. Lenders have a great way as making your loan look much cheaper naming it by what you want to pay each month. They can easily make you take out a bigger loan by making it last for longer. You just have to drive an old car for longer, and they don’t care.