Submitted by: Ryan Letterman
Whether you buy a car from a dealership or online, there are still only two methods of payment: cash or finance.
If you have cash in any amount, you are in the driver’s seat. If you find a motivated seller and you tell him that you can pay $500 less than he is asking in cash, you may be able to strike a better deal.
However, you want to make sure that everything is above board before you talk about the cash. Have you taken your test drive? Have you seen a copy of the title in the seller’s name? Have you seen a Carfax or similar product?
Once you are satisfied with all the terms, invite the seller to meet you at your bank at a certain time and date. Tell him to bring along a Bill of Sale and the Original title to be signed over to you. Your job is to present him with a Certified Check drawn on the bank where the meeting takes place.
We are not talking about a $500 car here. If it is $500, you would still meet him at your bank wanting the same documents, but you could hand him $500. You do not want to hand a person several thousand dollars or more in cash.
If the seller looks askance at your plan of giving him a Certified Check, find out why. On the other hand, don’t say anything. Just tell him that is the way you do business with everyone.
When meeting your seller at the bank, stand in a place where you know the security cameras will record the transaction.
When you are paying cash at a dealership, you will want to know the final amount so you can bring back the check. Some car dealers will accept a personal check and then have their cashier check the funds at your bank and put a hold on them.
Read your sales agreement very carefully as dealers are very good at adding extras that were not brought up in your verbal discussions.
If you are financing your purchase, you will want to have all your ducks in a row before you begin your search. Call your bank or whomever you have lending you the money and tell them exactly what you are looking for. They will tell you the average loan on the car you want, and this will tell you how much down payment you need.
Also inform your lender that you are purchasing the vehicle from a private seller and find out all their rules and regulations for handling such a deal. Many times, they want you to make the down payment to them and they handle the rest of the dealing directly with the seller.
If you are purchasing from a dealer, you still need your financing in place before you shop for a car. This way you are certain of the type of car you can afford and precisely what your rate of interest on the loan will be.
Sales people and finance managers at the car dealers always try to increase your interest rate when you finance through them because they earn commission when they sell for over their backer’s stated interest.
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