Don’t Get Ripped Off!
You work hard for your money, right? Then don’t just give it away when you don’t have to.
Just by following these simple 10 Steps you can save yourself hundreds if not thousands of dollars. Take these simple steps and you can be confident you bought your used car the right way!
If you have any questions about this process just give me a call and I will help you the best I can.
(413) 543-3800 or (413) 781-3800
Good luck! Here is a guaranteed method to save money on your next car purchase.
Step 1. Determine Your Budget
- Budget your income and expenses to determine how much you can afford.
- Know what other expenses to expect when you own a car – You will need to count on Title, Registration, gas, oil, maintenance, Excise taxes once a year and insurance. Factor all of these costs into your budget.
- Down Payments – If not paying in full, always give down payments with credit card – never cash and not more than 20%. Do not give a down payment unless you know for sure you are buying the car.
- If you Have a Trade In – do not tell them you have a trade in until you have settled on a price for the car.
- Learn how to value your current car and know its market value – especially if you are going to trade it in..
- Take Control of the Car Buying Process – Remember, you are the boss not the dealer. You call the shots. If you don’t like how a salesman/owner is dealing with you then walk away. If you control the situation you will win.
- What the Car Dealer is Thinking – They are think that they want to make as much money off of you as they can – and they are very good at it. Always remember this.
Step 2. Choose the Car You Want – What do you have in mind?
- Interested in Good Gas Mileage? Get a four cylinder, gas is expensive.
- What size Car do you Want and/or Need? Think of your situation, kids? Just you? Lots of traveling? Let your situation guide the type of car you want/need.
- Transmission – What type do you want? Automatic? Or Manual?
- Certified Used Cars – This can be a good option. Dealers spend time and money going through these cars point by point to ensure they are running and looking good. Good enough so they give you a decent warranty with them. They will cost a bit more but may be worth it in the long run.
- What type of Car Fits into your Price Range? You can search for your vehicle by price. The price that fits into your budget. This will determine the approximate year of the vehicle that you will be able to afford.
- Get Car Insurance Quotes – Once you know the type of car you want, call around and get a few car insurance quotes – be sure you buy car insurance the smart way- just like you are doing with your used car purchase.
Step 3. Search for Your Used Car
- Where is it available? The newspaper? Online?
- This link will show you where your car is available locally.
Step 4. How Will You Pay? Financing or Pay Cash
- The Car Dealer Makes More Money When You Finance with Them – If you have no credit/bad credit and are buying a car over $5000 – you are going to pay 20%+ interest rate – which is very high. They get the money for 5% or 8% and “resell” it to you at a much higher rate. Therefore try to get financing somewhere other than the dealership – perhaps your bank or a credit union.
- Pay Cash – If the car you are buying is under $5000 then you should really pay cash. If you cannot afford this, then save up. I wouldn’t recommend financing an older vehicle that doesn’t cost much – it just increases the cost of the vehicle that much more.
- If you Need Financing – Apply for Financing before you go to the dealership
- Bad Credit – No Credit Financing Refinancing – If you have poor credit or no credit – then get the car loan and pay it on time for the first 8 months – never late – then you can attempt to refinance with a different lender for a much better rate.
- Taxes on Your Vehicle – Massachusetts state sales tax is 6.25% – consider this in your budget.
Step 4. Go Test Drive the Car
- You are not going to buy the car on the first visit. Only go test drive the vehicle – NO NEGOTIATING at the dealer or the person’s house!
- How a Dealer Makes Money on a Used Car – The dealer buys the car at auction for much less than the car is worth – they then put it on their lot and can sometimes make double their money – IF you don’t know what you are doing.
- The Car Sales Person and/or Sales Manager – They will try to sell you the car on the spot – but you must resist this. Simply test drive the car and politely leave – then you go do your research.
- Should you Buy Based on Monthly Payment? Never. Do not answer their question “How much were you looking to spend each month?” – Do not give them this ammo to rip you off. Just tell them you would rather just talk about the price of the vehicle.
- Used Car Checklist – These are the items you need to check on a car you want to buy.
- Vehicle History Reports – Very important. Ask if the dealer already has this – if not, and you are serious about buying the vehicle, buy a report on the car – especially if it is a car over $2500. This will protect your money. This report can prevent you from ever buying a lemon. Just get the VIN of the car you are looking at and purchase a Vehicle History Report. IF there is a problem with the car this will tell you.
- What Mileage Should Your Used Car Have? You want a car with less than 15,000 per year. More than that usually means the car can have some maintenance problems shortly.
- Should you Buy a vehicle “As Is”? – Never from a dealer! Most person to person sales occur this way. But if the dealer won’t give you a 30 day warranty – then find another dealer and another car.
- After the test drive ask for the dealer’s business card with fax number and leave. Or if person to person sale get their phone number and tell them you will call them later.
Step 5. Research Time
- Very Important – Get Online Car Values – NADA or KBB – Use this value to make your first offer. Print out the value. Know the vehicle details, year, make and model – details, options and mileage. Choose Fair, Good or Excellent for the condition of the vehicle.
- If you are serious about buying the car I highly recommend you have a mechanic look at the car. Yes, it may cost $75 or so but it can save you thousands in future payments and alot of headaches. So, between your Vehicle History Report and your mechanic you are assured to get a decent vehicle – not a lemon!
- The Right Price to Pay for Your Used Car – If the dealer is asking $9,995 for the car and after your research you find the car is worth only $5000 – you know you are not going to want to pay much more than $5000, right? The dealer bought the car at auction for less than $5000 guaranteed. Offer $5400 and see what the dealer comes back at you with. If they are unwilling to be reasonable and negotiate – then find a different dealer and a different car – there are hundreds out there.
Step 6. Determine Your First Offer
- Used Car First Offer – How to Determine this Amount – Offer the value of the car plus a fair profit of $400. See where this gets you. In most cases the dealer will come down from his asking price. But do NOT pay thousands more than the value you have researched. Find a different car and a different dealer.
- The Secret to Saving Thousands? – Knowing the Actual Value of the Used Car you want to buy is the entire Used Car Negotiating system – you must determine this figure before you make an offer or even consider buying the car.
- Your Secret Weapon – You must remember that you are the boss – you have the ability to simply walk away.Do not fall in love with one car – choose several cars to look at. You want to find a good car at a good price from a dealer who will negotiate with you.
Step 7. Contact the Seller and Make Your First Offer
Make Your Offer from the Comfort of Your Home or Office – Simply fax the dealer your offer or in a person to person deal call the person and tell them your cash offer. Be sure to present your offer with confidence and provide them with printed proof of the cars actual value.
Step 8. Negotiation
- Negotiation with a Dealer – They will probably not accept your first offer so you must be prepared to negotiate. Do this with confidence and with the feeling that this is not the only car for sale on the planet. If the dealer isn’t willing to work with you then find a different car and a different dealer. Let them rip someone else off – not you!
- How to Respond When you Get a Counter Offer – No matter what the dealer comes back with – you calmly raise your offer by just 4% – and throughout the negotiations you never raise it more than a total of 12% of your original offer.For example, your first offer is $3000, they say that is ridiculous and want $5000 – you come back with $3120 ($3000 plus 4%) and in total you will not pay more than $3360 for the car – know the figure you will not go above. Be prepared to walk if necessary.
- Once you settle on a price – get it in writing and tell them you will be in to pay for the car.
Step 9. Present Your Trade In – If You Have One
- Get the Most Money Possible for Your Trade In – Sell It on Your Own. A dealer will only give you the “wholesale value” of the car – which is less than what you would get if you sold it on your own.
- When to Tell the Dealer you Have a Trade In – AFTER you have negotiated the price for the car you want.
- Used Car Trade In Value – Know your approximate Trade In value before you present your Trade In.
Step 10. Pick Up Your Car and Sign the Paperwork
- When picking up your Used Car from a Dealer or a Person – Give it a once over – look at everything again to be sure the car is in the same condition as when you took it for your first test drive.
- Always take it for a quick second test drive – just to be sure.
- Paperwork for your Used Car – Make sure all the figures are correct and that it matches the price you negotiated – no surprise fees added.
- Warranty Information – Get the warranty in writing.
- Title – Be sure the title is present – do not pay for the car if the dealer or Person does not have the title – no exceptions.If it is a person to person sale ask for the persons ID and match that up to the name on the front of the title.
- Print out and Prepare Your Bill of Sale before you go pick up the car.
- Car Dealer Problem Resolution – Call your local Attorney General – They over see all Car Dealerships and their licenses to sell cars in Massachusetts.If you have a problem with a dealer, the car or your down payment – tell the dealer you are going to the Attorney General – that usually gets their attention.
If you follow these simple steps you are guaranteed to save money on your next car purchase. Call us with any questions or concerns.