Car Buying Tips: Five Things You Need To Know To Avoid Hidden Fees And Additional Costs
Before purchasing your next car, you’re going to want to check for hidden costs, add-on fees, and other charges. You could end up spending hundreds, even thousands, of dollars over the lifetime of your loan.
Once you’ve found the car you want, it’s time to sit down with your sales rep to negotiate the terms of your contract. After a little back and forth on price, figuring out your interest rate, and calculating your monthly payment, you’re ready to sign on the dotted line, right?
Not so fast.
When you read the fine print you may find that additional fees and charges have found their way into your contract including add-ons you didn’t necessarily ask for.
Most car buyers are so focused on getting the best interest rate and negotiating the most affordable monthly payment that they’re unconcerned with the fine print of the contract. By the time they get to the step where they review and sign the paperwork, if the sales rep is throwing industry terms at them that they don’t fully understand, they’re becoming exhausted from the entire process and just want to get it over with.
Here are a few insider tips to make sure you don’t regret signing those papers.
1.) Read the Fine Print
While this seems pretty obvious and self-explanatory, it’s amazing how trusting the consumer can be. Honestly, the last time you bought a car, did you read and fully understand the contract before you signed it? Probably not. Most people don’t.
Some unscrupulous car dealerships are betting on that. Because most people don’t read the fine print, some sales reps can slide in additional, undisclosed charges or extras with huge mark-ups to their profit.
Also, make sure there are no blank spaces on your finance contract that can be filled in later wherever there are blank spaces, write in “$0″ or “N/A.”
2.) Typical Extras
Most of us are familiar with learning about the standard features of an automobile and then figuring out which additional features we are willing to pay extra for, but here are some extras to look out for when reviewing your contract:
Rust proofing
Extended warranty
Fabric protector
Car alarm (including Lojack, a device police use to find your car if you report it stolen)
Paint sealant
Credit life insurance
GAP
Window etching
The value of such extras depends on individual customer needs and situations. If the sales rep attempts to tell you that some or all of these extras are standard for every vehicle on the lot, ask to order your car from the factory, or suggest the dealership trade with another dealer that hasn’t pre-packaged their vehicles.
Extra products can add thousands to the negotiated price of the vehicle. Most products fill a customer need that when priced and disclosed correctly and can add real value to the whole transaction.
The problems with extras occur in two areas. First, when the sales rep doesn’t spend the time necessary to determine which products fit the specific needs of the customer. Rather than suggest specific extras individually priced, the sales rep lumps all the products together and pushes you to buy them as a package.
Second, unscrupulous sales reps can add thousands of dollars to the amount financed for these products, but not disclose the price increase until the last possible moment, when the financing contracts are being signed.
3.) Documentation and Administration Fees
Federal, state, and local governments are pushing more and more of their regulatory cost onto the local dealerships. In an effort to offset some of these fees and services dealers are required to perform, most add, a documentation or administration fee to the total cost of the transaction. Depending on state and local regulations, fee adding $100 to $150 seem reasonable and cover most of these additional items. These services include:
Duplicate Title Fees
Notice of Security Interest (to perfect lien)
30-day Permits
Federal terrorist matching data bases
Federal information privacy requirements
State vehicle id verification
Highway Patrol Inspections for out-of-state titles
Registering leases at customer’s county of residence
Carfax
FedEx charges/Shipping charges
Additional title addendums
Truth in lending record retention
Some dealers have taken up the practice of marking up documentation and administrative fees and are now charging as high as $300 to $500 per sale. A few are even higher. The charge for most of these fees seems to be more based on getting a customer to pay extra after the customer has finished negotiating, not the average amount it cost to get most deals through various state and federal regulations, as implied.
4.) Ask for a Menu System Disclosure
The best disclosure method I’ve seen in years involved using a menu system. On a separate sheet of paper the rep produces a document that includes:
1.)The negotiated price of the vehicle or trade difference
2.)The additional price of suggested extras (these can be shown as various option packages that may save money when bought in combination and as individually priced options)
3.)New totals initialed by both parties
This procedure makes sure that any suggested extras are properly explained and disclosed. It also allows the customer time to consider each item separate from the longer and potentially confusing finance documents. The final numbers from the menu should get carried over directly to the finance document.
5.) Other Costs
When buying a car, remember that there are other “hidden” costs (or, costs that aren’t usually considered), that go beyond the dealership.
During the lifetime of your vehicle, you’re going to have to pay for registration and tags, taxes, insurance, oil changes and fuel every year, and periodically pay for maintenance and repairs. Older models (cars more than 3-5 years old) may cost less up front, but you will likely need to factor more maintenance and repair costs into your budget than if you bought a newer model. While new models need fewer repairs and maintenance work, you will have to pay more up front.
Your wallet does not have to go through the ringer the next time you decide to visit a new or used car dealer. You can protect yourself from blindly signing into an unfavorable car deal by doing your homework, going to a car dealership with a good reputation, being prepared, asking questions, and double checking behind your sales rep.
Tags: Best Interest, Betting, Blank Spaces, Car Buyers, Car Buying Tips, Car Dealerships, Dotted Line, Finance Contract, Insider Tips, Interest Rate, Last Time, Lifetime, Mark Ups, Paperwork, Purchasing Car, Sales Rep, Sales Reps, Sit, Thousands Of Dollars, UpsRelated posts
Everyone wants to buy a new car apart from providing pleasure it also improves the standard of living of a person. The growing models of new cars are making more and more difficult for a person to choose the best of the lot. Firstly understand which one is better for you leasing or buying. If you are planning to buy a new car soon update yourself with the automated information available on the internet. It would be a better option if you purchase your car through a new car dealer.
The best time to buy a new car would probably be September and October this is the time when the new models cars arrive. Even if you have already decided the type of vehicle you will buy, make yourself 100% confident about the vehicle. A buyer is said to be in a key position during the entire buying process. Hence it is very important to be well informed about the product even before entering into dealership. You need to keep in mind certain points before you buy the car from a new car dealer.
The following tips will help you to take proper decision before you buy your dream car.
1) How much can you afford: This is the most important decision you need to make even before selecting the vehicle. Money plays a very important role hence analyzing your budget is very important.
2) Shop and get the best rates and models from different dealers and compare them to find out the best which suits you. Also check out for information on the internet regarding the features and the prices of new vehicles.
3) Find out whether the amounts quoted are before or after the rebate is deducted.
4) Order a new car if you are not happy with the dealers lot. Make sure you make the best decision even though there is a delay. You can also bargain by 10% to 20% as dealers usually tend to add his incentives in the invoice price. Always remember that the dealer pays the factory invoice price to the manufacturer.
5) While purchasing a new car always consider an alternative fuel vehicle as your main commuting car. Another important consideration would be to check how much of the vehicle can be recycled once it has lived its usefulness.
6) Always be cautious about the add-ons the dealer might force you to buy. They are specially designed by the dealers to earn that extra income.
7) Always remember that the manufacturer usually offers a guarantee of 36 months with the automobile. However the dealer might defraud you to buy the warranty you already have.
Finally remember that all new car dealers are not scammers. Out of one million people who work for dealership most of them are honest, hardworking and reliable. You need to do a little car research if you want to get the best possible car at a reasonable price. If you are not happy with the dealers lot you are free to walk away.
Did u know?
According to Consumer Reports, only 69 percent of women thoroughly research car prices before they buy, compared to 86 percent of men.
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While you can get a great bargain by purchasing a second hand car you can also get nothing more than an old banger if you dont take care. When it comes to purchasing a second hand car from a private dealer there are different rules than if you bought from an established dealer. One of the biggest differences are your consumer rights – or lack of them.
While there are many honest and trustworthy people out there selling used cars there are also some dodgy characters and of course sometimes it is hard to tell the difference. One of the best tips when buying a car from a private dealer is to pay a small fee to have a car data check carried out. This will check such things as the previous owner of the car, mileage data associated with the vehicle and if there are any problems relating to finance or insurance.
When going to look at a second hand car sold by a private buyer you should consider taking someone with you who knows about cars. If you dont have someone who knows enough about cars and what to look for when buying second hand then it could save you money and heartache in the long run if you were to pay a mechanic to go and look over the car with you before committing yourself to purchasing it.
When buying privately make sure that you learn as much as you can about the make and model of the particular car that you are going to look over. Do an online search through used cars for the model and make sure that you have a very good idea of what that particular make and model is selling for.
When buying privately always make sure that you go and look over the car in daylight. If the seller is wary of letting you do this then it is very likely that they have something to hide. The seller should be able to answer all your questions willingly about the history of the car. If they tell you they dont know or are unsure because they are selling the car for a friend or relative then you should stay clear and look elsewhere. They should also be able to provide you with all the necessary documentation relating to the cars history.
If you are buying from a dealer then be aware of all the added extras which they could try to entice you with and ask yourself if you really need them. Also be careful when it comes to taking any payment protection insurance associated with any car finance through them as this can boost the price up drastically of the car.
Tags: Banger, Bargain, Buying A Used Car, Car Data, Car Mileage, Heartache, History Of The Car, Insurance, Mechanic, Mileage, Mileage Data, Online Cars, Private Buyer, Private Dealer, Purchasing Car, Second Hand Car, Selling Cars, Selling Used Cars, Tips For Buying A Used Car, Trustworthy PeopleRelated posts
Every year in the UK over 7 million used cars are purchased, with many of these cars being purchased privately direct from the owner. Whilst this can often be the route to achieving the best bargains it can also become very expensive in cases when it emerges that the car has a number of problems or a previously unknown history. In order to reduce the likelihood of being caught out weve put together the top tips when buying a car privately:
The first step is to do some research about your desired car. Check classified ads and trade guides to get a good idea of prices. Parkers.co.uk is an excellent site and contains a free used car valuation tool and thousands of reviews and ratings.
Once youve decided on which car youd like to buy and have found a possible seller always go and take a look at the car in daylight.
Take a friend along with you. If problems occur in the future its very useful to have a witness available to validate what was said.
Check that the car has not been clocked. The average mileage is 12,000 miles a year. Have a look at the tyres to see whether this looks right or if the car has new tyres ask the owner for details of its servicing history.
Always go for a test drive. However, make sure that you are insured to do so and if the seller says that he has cover ask to see his policy.
Carefully check the log book, officially known as the V5 or registration document. In particular look for the chassis number, known as the vehicle identification number (VIN). This will usually be located on a small plate on the drivers door or in the engine bay. The absence of a VIN number strongly suggests that the car has assumed the identity of someone else, probably because it has been stolen at some point in its past.
You could also consider purchasing an AA Car Data Check. Importantly this will include a full description of the car, including engine size and date of first registration, so you can be sure of what you are buying. It will also tell you whether the car has a finance agreement recorded against it, if the car has been written off, and whether the car has had any number plate or colour changes.
The chances are that at some point youll enter into negotiations over the price. Have a highest price and target price in mind before entering into negotiations. If your two offers are some way apart you try not to say anything. Car salesmen use this tactic all the time as people find silence uncomfortable. Try this and the seller will often suggest meeting half way, at which point you can propose meeting half way between your offer and the new offer, getting yourself a better deal.
Finally, if interested in the car consider having it independently checked by a reputable garage. Reputable sellers will understand this so be wary if the owner of the car is against having it checked.
Tags: Aa, Absence, Bargains, Buying A Used Car, Car Data, Car Tyres, Car Valuation, Cars Direct, Chassis, Chassis Number, Classified Ads, Likelihood, Mileage, Purchasing Car, Registration Document, Tool, V5, Vehicle Identification Number, Vin Number, Witness