Whether off the line new or new to you, there are several things you can and should do to prepare to buy your next vehicle. We have compiled a few key items you can check off to help you be a smart and savvy shopper and hopefully a few steps ahead of the game.
Where to buy:
For sale by owner- For vehicles sold by the current owner you’ll need to take a few extra steps and precautions before even going to take a look at a vehicle for sale by these means.
- Only meet in public places where you are sure you will be around many other people. If possible only meet during daylight hours, if not ensure this place is well lit.
- Take someone with you, know the sellers' name, phone number and description before you get there.
- Ask for the VIN number and do your homework ahead of time.
- Ask the seller if he/she has a clean title. If not, this is a red flag and it’s best to move on.
Dealerships- One of the best ways to find a good dealership is to talk to your friends! Where have they purchased a new vehicle and had a good experience? Check with the Better Business Bureau, and online reviews for dealerships.
Buy Here Pay Here- Payday loan’s little cousin offers almost anyone a car with often no income or credit verification. That comes with a big cost. According to Road and Track, the average interest rate at one of these dealerships is 19% and as high as 29%. They also often have a “one strike you’re out” late payment policy and will repossess your vehicle after one late payment.
Buying a vehicle on credit is the most common way American’s buy their rides. Getting the best deal on financing while protecting your credit requires a bit of being in the know.
- Credit Union, Bank, or Dealership financing? Per Bankrate, Credit Unions typically beat banks by 1%. Sometimes dealerships will have financing specials that are the best route to take, however, check with your bank or credit union first to see what they have to offer. Be sure to find out if there are better rates with a higher down payment as well.
- Know your credit scores before you go shopping. A low score finance approval may come with such a high-interest rate you might be better off spending a few months cleaning up that credit report before you buy.
- Protect your credit in the process of getting approved. Dealerships will often have your credit pulled by multiple lenders to shop for the best rate to offer you. When done in the same day they count as one hit against your credit score, however, if you go to several dealerships over a period of time and apply for a loan it could have a larger negative impact on your credit.
Used vehicle safety:
- Recalls- Go to: https://www.nhtsa.gov/recalls. This site allows you to search by VIN number.
- Vehicle history reports- There are several online sites that provide full history reports that can provide police reports, repair documents and insurance claims. Many of these reports are free and will help you to know what previous issues and or potential issues exist with the vehicle you are looking to purchase.
Sleep on it and call your insurance company before you buy! Any salesperson who pushes you to leave the lot in one of the lots vehicles is one to be concerned about. Get your data, go home, decide tomorrow. Get an insurance quote on the vehicle you’re thinking about picking up and making your own. There’s nothing worse than finding out the insurance policy is beyond your budget after you’ve already purchased your vehicle.
Blog By: Allison Green