You picked the right car, now it's time to make the right deals to drive it off the lot.
If buying a car was like playing football, choosing the right model would be like a long drive to the red zone. It is in this moment you can play like Aaron Rodgers or Jay Cutler depending on how prepared you are inside the business office. From my personal buying experience, the business manager threw things such as GAP Insurance and extended warranties at me with lightning speed. This made me scramble, trying to decide what was worth the price and what was not. In part 2, I will try to be your coach in successfully closing the deal.
Paying for the Car
When I started the process I knew that I was going to trade-in my old car to help pay for my new one. Like a team in drafting a player, I had a rough idea on what I was going to get and knew it was not going to cover the entire cost. While it was enough to cover the taxes and fees, I had to explore different financing options. Ultimately, I decided to get an auto loan to help pay for the rest of the car.
At this point, you can either review options from the dealership or come in with a pre-approved loan from a bank or credit union. With some research beforehand, you can get an auto loan with a good interest rate and a payment that works for you, so it's worth seeing what you qualify for in advance. I got approved for my loan from my credit union, but I couldn't drive off the lot just yet.
Like many people, I have frequently been unsure if the warranty is really worth it. However, in the past year or so they have saved me thousands of dollars. Everything from replacing my $150 game controller to a complete replacement of my steering rack has been covered by different extended warranties. From my recent positive experiences, I would now recommend them for your next major purchase.
First, do your homework to see what the warranty covers and under what circumstances. More than likely, the dealership will offer one while you are closing the deal but it might not be as good as one you can find from an independent agent or your credit union. This can help you avoid policies with confusing terms and conditions, not getting enough additional coverage, less then stellar customer reviews, or plans with high deductibles.
Another item the dealer will throw at you is GAP (Guaranteed Auto Protection ) Insurance. Your car loses value the second it drives off the lot and chances are most regular auto insurance policies do not cover the "gap". GAP Insurance covers the difference between your car's depreciation and the balance left on your auto loan in the event your car is wrecked or stolen. This is great to have if you are financing an expensive vehicle, have a large auto loan, or are purchasing a brand new or recently used vehicle.
While the dealer may pressure you into purchasing this on the spot, much like extended warranties, it is a good option to consult your current auto insurance company or FFCU to make sure you're getting the best coverage and rate.
Another item to consider that may not come up while you are in the business office is debt protection. It is a loan-payment protection plan that protects the loan holder if certain life event such as disability, loss of life, or involuntary unemployment happens to you. I like to compare this to having a good backup quarterback just in case something happens to your starter. Like extended warranties and GAP, this is another way to protect yourself against unexpected cost.
While there is not one perfect game plan in the car buying process, you can prepare yourself for the big game by doing your homework beforehand. Teams don't enter games without proper preparation. Good preparation before entering the dealership will increase your chances of saving money.