| We all dread walking onto that car lot and being | | | | arranged in advance. Credit Unions frequently have |
| approached by a salesman that we just know is going | | | | very good rates. You can also find some lenders for |
| to try to pressure us into buying today and spending | | | | your area and their published rates by visiting If your |
| more than we want to spend. It doesn't have to be | | | | lender offers extended warranties, be sure to get the |
| that way. With just a little preparation, you can make | | | | pricing and factor that into your payment. Don't tell the |
| sure that you get a great value and protect your | | | | dealer that you are paying cash. Let them believe they |
| investment Don't fall in love with having a brand new | | | | will be doing the financing because they make more |
| car. The newer the car, the worse it depreciates, with | | | | money when they arrange your loan. The old idea of |
| the first year being the very worst. By finding a used | | | | getting a better deal with cash simply does not apply |
| car that is still under factory warranty, maybe two or | | | | any more. The salesman may get excited about your |
| three years old, you will avoid the worst of the | | | | cash, primarily because he's paid to be excited about |
| depreciation and you can usually buy a relatively | | | | anything you say, but the person making the decisions |
| inexpensive extended warranty that will cover | | | | only sees the bottom line. If he believes the finance |
| everything that the factory warranty covers. Look for | | | | department can recover some of the lost profit on the |
| a warranty that has a small list of excluded repairs | | | | sale price, he'll be more willing to sell the car for less. |
| rather than a big list of items that are covered. In the | | | | After you have agreed on a price, it will be time to sit |
| warranty book that originally comes with a car, you will | | | | with the finance manager and, if he doesn't give you a |
| see a warranty that essentially says that everything | | | | better interest rate than you found on your own, hand |
| except certain normal wear and tear items | | | | him your bank check or draft. Be sure to get his price |
| (alternators, tires, batteries, light bulbs, etc) is covered. | | | | on the warranty. Even if he beats your bank's rate, a |
| You want to look for similar wording on your extended | | | | higher priced warranty could outweigh the savings in |
| warranty. A long list of covered items is always much | | | | interest. The simple test is to compare payments over |
| shorter than the list of things that can actually break. If | | | | an equivalent number of months. The total that comes |
| the warranty company is able to claim that a covered | | | | out of your pocket is really all that matters. Don't be |
| item broke because of the failure of a non-covered | | | | afraid to walk on a deal. By doing your research, you |
| item, they will deny the claim. Be sure any warranty is | | | | will know if you are getting a bargain. If a dealer paid |
| transferable because that will make a big difference in | | | | too much for a car it's not your problem and you |
| resale value and desirability when it comes time to sell. | | | | shouldn't be penalized. You can find another car. The |
| Once you have decided on a make and model, decide | | | | value of the car in two years will have nothing to do |
| how much you are willing to spend on it buy | | | | with the amount you spend on it today so why lose |
| researching the value with NADA at or Kelley Blue | | | | more than you have to? |
| Book at Try to pay somewhere between trade value | | | | Kevin Maher is the Agency Liaison at Debt |
| and retail value at a dealer. Mileage makes a | | | | Management Credit Counseling Corp (DMCC), a |
| difference, so be sure to know what effect low or | | | | 501c(3) non-profit charitable organization offering free |
| high mileage has on the value. Have your financing | | | | financial and budgeting education across the USA. |