When you're negotiating the best deal for your car, these tips might help you out:
Get a pre-approved car loan before you go to the dealership
Applying for a pre-approved car loan is not as complicated as you think! You can apply for a preapproved loan straight from the bank or if your desired bank has online loan application banking services, you can get your car loan quota via online.
The best way is to get a few preapproved car loans from several banks and compare them to see which one suits you best (ie: the lowest interest rate for your credit score). So once you’re at the car dealership, compare again your best offer with the dealership’s offer and take the best deal for your new car. Or try to negotiate an even lower interest rate with the dealer.
Take a test-drive
You wouldn’t buy a pair of shoes without trying on them first, would you? The same goes when buying a car! You have to make sure that you choose the right, comfortable and suitable car for your uses to avoid any regrets and further complains after getting the car for only two weeks. There is no harm for you to take the test drive, it is free!!
Take initiative and seek for promotions
Ask the dealer if they have any current promotion because sometimes manufacturers offer cash incentives or 0% Annual Percentage Rate to promote certain vehicles during the festival season (like Hari Raya Aidilfitri promotion).
Some dealers might not tell you upfront, so just gird your loins and ask for it. Cash rebates promotion: Cash rebates can be used to decrease the down payment and at the same time lower the whole loan amount or used to offset the registration fees or taxation.
Low (sometimes even 0%) financing: For some cars which dealers need to shift quickly, they may be willing to offer you low (lower than banks) rates of financing so definitely shop around to see if you can get a good rate!
Try to negotiate the loan interest rate
As you have your own pre-approved loan from your bank, you can use this rate to negotiate with the dealer to get a lower interest rate. If you failed to do so, you still have your best rate at your chosen bank. Or else, if you can’t get any qualified loan from banks because of your poor credit score, you probably have to strike a deal with the dealer. In this instance the interest rate might be higher since you are considered a “credit risk”. So, try to negotiate to lower down your interest rate.
Careful about the “add-ons”
Tinted windows, skirting, plus a funky sticker for your brand new car? Before you say yes to the dealer, remember that the more you purchase the addons, more numbers will be "add on" to the total price. So, think carefully about purchasing those add-ons.
If you have enough money to spend, try getting a good price on an extended service warranty for your car. For items like window tint and alarm system, scout other offers outside for a better deal (ask your friends on their alarm system!). For most new cars, rustproofing is actually included in vehicle factory warranty, so you don’t need the double protection.
Don’t relax until you get the car
Although dealers can appear sincere and friendly, their main job is to sell you a car! Be aware of any additional items that they offer even after you have settled the car purchase price and all car financing matters. They seem like they want to help you out, that may be true but keep in mind that they are also aiming to earn as much commission as they can. So just remember that the deal is not over until you actually get the car.
an article in Malay Mail by Caitlyn Ng, savemoney.my