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Last Updated: Jul 15th, 2008 - 09:12:22 |
You are bombarded with offers for a car loan. You see it every day on television, on radio, and in every edition of your local newspaper – the specials, promotions, and sales on new cars or trucks. Today’s deal is better than the yesterday’s deal and is so good that it will probably never be repeated within your lifetime.
In fact, if you believe all the hype that the car and truck dealerships are making, you have to wonder why they are still in business at all, since they are obviously selling these vehicles way below their cost.
Make no mistake about it – there are very few if any cars that leave the dealer where you paid less for the vehicle than the dealer did. That includes used cars and trucks too. They do not do business that way, and they never will because they would not be able to keep their doors open very long if they did. They get rebates from the manufacturers, incentive bonuses, volume bonuses, and more.
Yes, you may be able to get a killer deal on a particular make and model from one dealer that another dealer cannot match – not because they don’t want to, but because the first dealer gets incentive or volume bonuses that the second dealer does not in that particular month.
However, one of the things to realize is that one of the major profit centers for a car or truck dealership, new or used, is in car loans and car financing. Some dealerships have their own financing. Well, sort of, maybe, although most do car financing through an arrangement they have with a local bank or credit union.
Many larger dealerships have arrangements with multiple local banks and credit unions in order to make it appear that you have multiple options for getting the best deal on your car loan. In most cases, this is correct.
The question becomes one of whether or not you are getting the BEST deal on your can loan or truck loan. How do you know? You do your homework on it to make sure, and you do that homework even before you step foot into the dealership.
People who know have written many times that you best point of leverage in negotiating for a new car is to walk into a dealership where you have already been pre-approved for a car loan, where you know how much money you are able to get in order to keep your payments at a level you can handle, and you know what the interest rate is.
In other words, you should negotiate every bit as much and every bit as hard on the auto financing part of the deal as you did on the price of the car or truck, and what the dealer will throw in, like floor mats or XM radio or whatever.
Saving a couple hundred bucks on having the dealer throw in XM radio is peanuts compared to SEVERAL hundred or even thousands of dollars you could save over the life of the car loan with a killer deal and low interest rate!
One of the best ways to get the best possible deal on a car loan is to ensure that your credit score is as high as it can be. Most consumer credit reports have errors in them, which will lower your credit score.
Take steps to get your credit report correct, and visit Raise Your Credit Score for tips about how to do this and how to win your disputes with the credit bureaus.
Shop around for your car loan, in the same way that you shopped around for the vehicle you want to purchase. If you have found the best deal possible on a car or truck, be aware that with the best car loan deal possible, that makes the whole dealer even sweeter.
About Author: Jon is a computer engineer who maintains web sites on a variety of topics based on his knowledge and experience. You can read more about Great Deals in Car Loans and Car Leasing at his web site at Car Loan Car Lease Resources .
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