Think About Financing FIRST When Shopping For A New Vehicle!
People always think about financing too late. They wait until they are ready to head out the door, keys to their old beater car in hand, to drive to the dealership and “shop” for a car. They tell themselves, “I’m just looking today. I want to see what’s out there in my price range.” Without giving any thought to what their “price range” might be!
In fact, for most people “price range” isn’t even accurate, “payment range” is better. People always have an idea of what “payment” they want, and don’t really understand how payments vs. car price work. And that’s where the dealership gains the advantage and can sucker you into a vehicle that costs way too much, with payments that are stretched way too far. Especially if you’re in the market for a bad credit car loan!
As a former car salesperson I sold vehicles with 84 month payments, and one time I sold a car with 92 months! That’s 7.5 years! Why did I do this? Because stretching the payments that long fit my customers budget - and I therefore sold a car and earned a commission. Make no mistake about it. Salespeople have to put food on their table and clothe their kids just like you do! And if that means stretching payments to hold profit on a vehicle then that’s just what they will do! They ARE NOT on your side.
As a salesperson I found, more often than not, it was mostly about the look and feel, and a lot less about the price, for most buyers. By shifting focus OFF the price and ONTO the eye-popping fun features, I was able to make them practically drool for the car, and then it was only a hop and a skip to the next step of “bumping” them up $50 or more than what they originally “budgeted” for in payments.
Pre-approval is what keeps you and your emotions in check. It helps you focus in on the most important thing – how much does the vehicle cost. It helps eliminate the “drool factor” from car buying and keeps you in check so you don’t get suckered into 92 month payments!
Pricing new cars is the simple part. Shopping online is easy. Most dealerships have websites that list their inventory and pricing.
Before you even get to the dealership, or apply for a loan, you should always begin by checking your credit report . I saw many salesmen and managers that would tell the customers outright lies about their credit score in order to bump the interest rates or payments on a car. So pull your credit first!
Once you know your credit score you can apply for a car loan and get pre-approved . Pre-approval is the absolute simplest way to purchase your new vehicle. It tells you how much you can finance, and gives you approximate payments. This way you can shop for the best vehicle that you can afford! Instead of honing in on the biggest, shiniest vehicle on the lot – and getting suckered into payments you can’t afford.
If you have questionable credit and you go to a dealer without being pre-approved, then you are setting yourself up to get ripped off. The dealer will have a million and one reasons why you will have to pay such a high interest rate. It’s true that a person with bad credit will have to pay more than someone with sterling credit - but if you can save 2 or 3 percent you can save between $150 and $200 per month. Quite a savings!!
With Pre-approval you will have the check in your hand ready to endorse to the dealer. Expect them to try to play some games to get you to pay more, just stay the course and you will drive out with a car you can be happy with AND can afford.
