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Stay in control during the car buying process

Nov. 5, 2015 at midnight

One of the more daunting experiences in your adult life is the process of purchasing a vehicle. Whether you are a computer savvy, online shopper with a knack for researching and reading reviews, or a hands-on shopper perusing the local car lots to find the best deal, the process can be downright intimidating. There are many ways to feel more in control and at ease during the car buying process.

Get Pre-Qualified

Unless you have a large pile of cash that you can hand to a car dealer at the point of sale, you are going to need to finance all or part of your purchase. What most people don’t realize is that they can shop like they have cash in-hand, if they first get pre-qualified through their financial institution. When you go to the dealership, you will have leveraging power, because you are pre-qualified for the loan. Going into this process understanding that you will be making payments is important. Your first step is to get pre-qualified through your financial institution for a loan. This will tell you how much money you have to work with when it comes to purchasing your vehicle. Your financial institution can help you prepare a loan application in person, and often over the phone or even online. Your qualification amount and the interest rate that you are qualified for, are based mostly on your income (your ability to pay on the debt) and your credit score (your history of paying debts and current debt owed).

For your application, you will need to provide personal information, such as your income and employment information, and your credit score will be pulled to assess your creditworthiness and determine your interest rate. A pre-qualification for a loan is not a commitment to buy a specific vehicle; it simply means that when you find that vehicle of your dreams, you are approved for a precise dollar amount. Your pre-qualification, plus your down payment, and the trade-in value of your current vehicle (if you have one) all equal the total amount that you have to spend on a car. Your next step would be finding the vehicle that fits into your budget and then finishing the loan application process with that vehicle's information.

Do Your Research

Once you know your budget, go online and explore your options for vehicles. Does your lifestyle require you to have a larger vehicle to transport your children or supplies for work? Do you live in an area in which you would benefit from a four-wheel or all-wheel drive vehicle? Going into the car buying experience with a basic understanding of what you are looking for means less shopping around and traveling from lot to lot. You can pinpoint a few dealerships with which you may do business and start the search through them. Some dealerships or types of vehicles have incentives if you buy from them. Taking these incentives into consideration when purchasing a vehicle can save you hundreds or even thousands of dollars. You should, however, read the fine print and ask questions. Some incentives may come with terms and conditions that could have repercussions.

Negotiate for What You Want

The price of the vehicle you choose is not set in stone. There are many websites online (such as with which you can research the best or average price of a vehicle to see if you are getting a good deal for where you live. If the dealership states that the price is firm, you can negotiate with other options for your vehicle to make it your style. Your pre-qualification letter is a great negotiating tool in that it represents a guarantee that you can afford a specific amount, and therefore, it is as good as cash to the dealership.

Trading in a Car

There are two logical ways to replace the car that you currently own. You can trade that vehicle in to the dealership for a sum of money, or you can sell your car on your own. There are pros and cons to each of these methods. If you choose to trade your old vehicle in, you will not get the full value of your vehicle, but you will get the peace of mind of dropping off your old vehicle and picking up your new one all on the same day. This makes the process easier and less stressful. If you choose to sell your old car on your own, you have the opportunity to get full price for it; however the amount of time it may take to find a buyer may not be worth the convenience of trading in for slightly less money.

Enjoying Your New Car

Once you have been pre-qualified for a loan, picked out your new vehicle, negotiated a fair price, and determined what to do with your old vehicle, you must finalize your loan. Your financial institution can help you complete the information on your pre-qualified application, and finalize payment to the dealership for your new vehicle.

To complete the process, autograph the paperwork and take your new car off the lot for its final drive home. This last step is without a doubt the most satisfying.



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