Car dealerships are known for being stressful places. It can be very difficult to resist pressure from a skilled vehicle salesperson—and customers say yes, often with their hearts rather than their heads.
The best way to make sure your experience at the dealership goes in your favor is to prepare ahead of time. Know what you want and what you can afford. Do all your research ahead! Also just be prepared to feel some pressure from salespeople hoping to earn commission, but don’t let that take you away from the ultimate goal.
Here are a few things to know when at a car dealership:
Know What You Can Afford
You want to walk into an dealership knowing exactly what you can afford to pay each month. If you walk in with a general idea of “about” X dollars per month, you can bet the sales staff will treat that figure like a soft suggestion rather than a firm limit. The looser your budget, the more likely you are to agree to a deal that’s at or above the limit once the sales manager comes up with a number—especially once you factor in fees, taxes, add-ons, etc.
Sit down beforehand and break down your income. What percentage of your take-home pay can you afford to dedicate to car payments each month? Crunch the numbers on your own time. Otherwise it's just going to be a mess and your time will not be fun at all.
Don’t Budge on What Matters to You
Just like you are doing with your budget, write down what features really matter to you. Differentiate between what you want and what you need in a vehicle. This will help you avoid the shiny object syndrome and getting extras you don't really need.
As someone who works for a dealership; Here’s a common scenario car shoppers will go through at the dealership: They agree to test-drive a car that’s either at the top end of their price range or just a bit above it. The salesperson then reminds them about all the great features they’ll get—heated seats, a multimedia entertainment system, push-button start, etc.—by spending just a touch more. The buyer will suddenly feel like they need these things and agrees to a payment plan that’s a strain for them, destined to feel the pinch for months and months to come.
Set what you want and leave it at that with slight wiggle room depending on what else you like.
Don’t Increase your Loan Length to Lower Payments
A longer loan period means lower monthly payments—but you’ll pay more in interest over time, plus you’ll be on the hook for additional months or years. A shorter duration means you’ll pay more each month, but you’ll pay off what you owe faster and without accruing as much interest.
Most auto loans vary from 24 to 72 months—but longer loans of 84 months are becoming more prevalent. It’s generally unwise to go past 60 months because the your car will be worth significantly less when you go to trade it in. Yes it's possible to refinance your car through other companies but you should consider if this is something you want to deal with for a few more years.
Take Your Time and Be logical
It’s easy to get caught up in the persuasive part of the car dealership environment. The salesperson wants to say yes. You want to say yes. But you need to take a step back. After all, you’ll be living with the financial choice you make for years to come. If you need to, come back the next day after thinking it over more.
Knowing these few tips before you visit an auto dealership will help you keep your cool and make the smartest decision for your life.
*Disclaimer, I am in no way taking shots at the dealership, Just helping guide customers to making smarter decisions when making a big purchase :)*