Saturday, 27 October, 2007 6:38 PM
Five Tips to Save Big Bucks When
Buying a Car
Most people hate buying
a car. They rate it right up there with getting a root canal—downright
painful. But why oh why is buying a vehicle such a nightmare? For
many of us it is the painful negotiation to get the best price.
Is there any way that we can buy a car and save money without all
of the stress?!
YES! The reason that the negotiation is so stressful is that people
don’t understand how car dealerships make their profits: your
car loan. This is where the real profits come into play. And while
everyone cringes when it comes time to talk about credit, don’t
let your eyes glaze over just yet, because that’s where you
need to focus if you want to be a savvy consumer and save money.
5 Tips to Save Big Bucks When Buying a Car!
1. Check Your Credit Report
Most credit reports contain inaccurate information. It’s up
to you to find the inaccuracies and correct them - there’s
no government agency that requires the credit report companies to
amend mistakes to your report.
2. Good Credit Means That You’re Ripe for Abuse
When you have good credit, banks place fewer restrictions on your
loan and that allows dealers to charge you more for the car and
inflate your interest rate. So it’s crucial to know your lender’s
conditions on your loan up-front.
3. Bad Credit Means the Bank Protects its Money
When you have bad credit, the bank places more restrictions on the
loan. That gives dealers less wiggle room to add on options or raise
the interest rate. But bad credit still means you have fewer options
when borrowing money.
4. Get Pre-approved Before You Visit Any Car Dealers
That way the dealer is forced to make a deal that fits the conditions
outlined by the bank - again, eliminating that profit wiggle room.
5. Have an Exit Strategy
Don’t let the lust for leather seats and a premium sound system
melt your brain. When buying a car, keep in mind at some point you’ll
sell that car. So you must be smart. You’ll pay much more
for options than you’ll recoup when selling it down the road.
Mark Marine author of “Don’t Kick the Tires, Kick the
Dealer” says that consumers also need to know that when it
comes to their credit, the best thing they can do is pay their bills
on time and beware of ‘credit repair’ scams.
“Understand that not all of the credit repair companies have
your best interests at heart,” says Marine. “Some of
these companies claim they can hide or remove negative information
from your credit report, even if that information is true. But they
can’t. In some cases after they’ve ‘repaired’
your credit, your score drops even lower than before you went to
When it comes to your credit and buying a new car, consumers need
to be informed. Check your credit score, get pre-approved first,
and plan your exit strategy. A car purchase will affect your economic
life for roughly three to seven years. That’s a long time
to be stuck in a bad deal.
About the author:
Mark Marine has been in the car business since 1989. He grew frustrated
listening to the litany of stories from consumers who were upside
down, or owed more than their car was worth, in their car loans.
Bothered by the standard practices in the auto industry, Marine
decided to start empowering consumers by explaining how dealerships
His work for consumers led to national interviews on the Allan Handelman
Show, Everyday Wealth, Dr. Penelope Sugrosse and Ellen Rohr with
Bare Bones Biz and The Jim Sumpter Show. Marine also hosted a daily
talk show for four years on KTKK radio in Salt Lake City and wrote
a weekly column in the Enterprise Newspaper, which was distributed
to businesses throughout Utah.
He currently lives in Utah where he owns and operates a car dealership.
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