5 Questions To Ask a Car Dealer That Could Save $200 a Month on Car Payments
After buying a home, buying a car may be one of the biggest purchases you ever make. With so much money at stake, it’s crucial to be an informed buyer.
Too many buyers focus solely on the sticker price and monthly payment amount without digging deeper. This approach might lead you to paying more than you need to. A few strategic questions during negotiations can potentially slash hundreds from your monthly car payment and thousands over the life of your car loan.
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Are There Any Extra Fees?
The out-the-door price is what truly matters, not just the vehicle price. But many dealers will surprise you at the last minute with a myriad of random fees to inflate their profit margin.
“Some dealerships add fees while others don’t,” said Jamie Mitri, manager at Cumberland Hill Auto Sales and Service. “It’s important to know that upfront.”
Get them to remove as many dealer fees as possible.
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Is There a Warranty on the Car, and What Does It Cover?
An extended warranty may be worth considering. While they do come at an additional upfront cost, the long-term financial protection can be invaluable. They provide some economic protection against unexpected repairs after the original factory bumper-to-bumper warranty expires. However, they also tend to be lucrative money-makers for dealers. Be sure to scrutinize whether it makes financial sense for your particular situation.
“Are there additional warranty options that you can purchase?” said Mitri. “Having options is a good sign. Keeping a warranty on the vehicle will save you in maintenance fees and costs.”
If there are, get them itemized and ask about the true costs so you can make an educated decision on whether they are worth it. Ask about the warranty pricing, covered components, deductibles or fees and time- or mileage-based limitations.
What’s the Car’s Safety Rating and Accident History?
Safety should be a paramount concern when purchasing a vehicle, whether new or used. Official safety ratings are important data points. For used vehicles, the accident history report is also crucial. Even minor prior accidents could indicate underlying structural issues.
“A low rating and if the car has been in accidents previously will impact the quality of the car,” said Mitri. “It’s important to check information on the vehicle before purchasing. A good-quality vehicle will not need maintenance as often and this saves you money down the road.”
Don’t settle for vague answers. Request a vehicle history report like CARFAX or AutoCheck to review the specifics. Prior damage could drastically impact the car’s safety, longevity and resale value down the road.
Does the Dealership Allow Outside Financing?
One of the biggest profit sources for dealers is financing — both the interest revenues and fee markups. Because of this, some dealers may try to restrict your ability to seek outside financing at more competitive market rates.
“This can help you pay for the car and provide you with options,” said Mitri. “Or are you able to pay cash for the car if possible? This could save you on interest costs of financing an auto loan.”
If possible, get preapproved financing offers from your own bank, credit union or other third-party lenders before visiting the dealer. This allows you to compare their offered rates to your own secured financing.
Has the Car Been Properly Serviced and Inspected?
For used vehicles, understanding the service history and getting an independent mechanical inspection are wise precautions. A vehicle with poor maintenance records or significant unresolved issues could mean headaches and expenses right after your purchase.
“If the car has been serviced by the dealership and has a recent state inspection, this is a great sign that you are purchasing a good-quality vehicle and it will save you maintenance costs down the road,” said Mitri.
For new vehicles, make sure you ask about included or recommended predelivery inspections and servicing you should expect for a brand-new vehicle. You don’t want to get stuck with a lemon or a car with needs that will instantly erase any wins you made during negotiating.
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