When it comes to buying a car, the monthly payment is often the most important factor for many buyers. However, it is not advisable to discuss this with the dealer during negotiations. According to John Nielson, director of AAA, the safest option is to negotiate the purchase price. There are many variables that affect monthly payments and dealers make more money when their contract is based on monthly payments.
It is important to note that once you focus on a monthly payment amount, the process moves forward without analyzing the details of the contract such as the interest rate, length of loan and amount you will spend if you keep the car until the end of the loan. This information is only revealed after signing on the dotted line. Therefore, it is best to tell the seller that all you care about is getting the best price for the vehicle. Another mistake buyers should avoid is letting the dealer take out a credit report for them.
Once they know your credit score, it can affect negotiations for the car you're interested in buying. It is also important to remember that when buying a new car and exchanging an old one, these are two separate transactions and it benefits you to make them in that order. When negotiating with a car dealer, it is important to keep in mind that they are trying to maximize profits and will reduce your payment by extending the life of the loan or by requiring more money up front as a down payment. It is also important to remember that advertised interest rates are usually for the shortest duration of the contract and getting the monthly payment you want will likely require a longer contract.
The ultimate goal when negotiating with a car dealer should be to get them to take such a low price that they are willing to pay for the car in exchange for getting it off their lot. It is also important to remember that buying a new car can be expensive and not always a pleasant process.
