(for Riverside/San Bernardino Counties)

vehicle negotiation tipsIf you are thinking of financing a vehicle, you’re probably feeling a mixture of excitement and apprehension. Yes, you’re going to end up with a new vehicle, but the prospect of applying for financing is rather daunting, especially when going straight to the dealership where the salesmen is going to do everything in their power to get you to spend more.

Thankfully, there are many ways to make the process easier. In fact, with the right negotiation tactics, you stand to save a fair amount of money by getting the best price possible for your budget. Check out these 4 negotiation tips when financing a vehicle:

Set a Budget First
Always start the negotiation process by knowing your budget and sticking to it. Include the costs for monthly payments, running costs (gas, maintenance etc.), insurance, tax and everything else associated with owning a car.

With a firm budget in mind you can stand firm on what you can afford to pay towards the vehicle, which should help avoid being upsold unnecessary features or buying a car out of your price range. Never let the dealer talk you into going over your budget!

Always Look for Shorter Loan Deals
When the loan term for car finance is shorter you’re going to pay less interest, so it’s well worth negotiation for shorter deals. Yes, monthly payments are higher but because the interest is lower than the long-term loan you end up saving, providing its within your budget.

Remember, vehicle values depreciate at a ridiculous rate, so the shorter the loan the better it is for your long-term finances – four years is the ideal length for vehicle financing.

Don’t Let the Dealer Talk You into Lower Monthly Payments Over Longer Terms
This is a common tactic used by dealers and it does seem tempting but there are many reasons to avoid it. They’ll ask your ideal monthly payment amount and then work to reduce this, usually by extending the loan length, meaning you pay more interest over the term of the loan.

So, it may appear like you are saving money with lower monthly payments but this is not the case. You’re paying more interest – the price of the car will not change even with seemingly low monthly payments.

Consider a Down Payment
If you can afford to put a down payment on the vehicle you are going to be saving money over the long-term. You may feel it’s unnecessary because not every dealer requires a down payment, so you seem to be spending less, but it can be quite a risky route to take.

For instance, if you don’t have any down payment and find yourself needing to sell the car quicker than you anticipated, then you may end up paying more towards the financing that you got for the vehicle.

Down payments help to avoid these situations, as you’ve already covered a large amount of the expense so will have less to pay back compared to no down payment. Without any down payment your loan is going to be longer and with more interest.

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