Buying a new car can be a real nightmare with serious financial consequences in the long term, or an interesting challenge that the smart shopper who uses all the resources and information available today on the Internet, can be prepared with all weapons the dealer to buy or make a lease, under the best possible conditions.
Should I buy or make a lease?
To win in this game and save a lot of money, it is important to know at least these 10 expressions used in the typical language of a process of buying / selling a car and understand its consequences
10. MSRP or Manufacturer’s Suggested Retail Price or (Suggested Retail Price by Manufacturer): Also known as the “sticker price” or “price tag” is what the vehicle manufacturer believes that a fair price. However, in most cases, the MSRP is just the starting point for the negotiation of the final sale price, which also includes registration fees, tuition and sales tax.
The key in all this is the word “suggested” or “Suggested” so that the concessionaire is not required to offer the exact price. Sometimes, when a model is in high demand and there is little inventory, the price shoots, but the most popular cars, the price of the “tag” can be negotiated down.
9. Invoice or “Invoice Price” is the price the dealer paid the manufacturer allegedly by the vehicle and in Spanish some marketers refer to as “cost price”. Sometimes the seller can use this figure as a starting point for negotiation as it is generally lower than the MSRP.
Many offers include this term as a hook, but may be tied to other financing terms less favorable than can end up costing more money.
8. Downpayment or Initial Payment: It is a fundamental factor, but not only, to determine the conditions of the contract, either purchase or lease.
And the larger the downpayment or downpayment, the lower the monthly payment – usually per $ 1,000 over downpayment, can be reduced by about $ 100 monthly payment, but we must remember that there are other fundamental points as the value of the Trade -in (value of the car is delivered to exchange) and above all, the next point
7. Credit Record or Credit History: Perhaps this is the most valuable weapon with which a smart shopper can get a dealer as a good credit history not only guarantees the best interest rates, but it can also open doors to exclusive offers for buyers with the best scores, as those that promise input 0, 0 and 0 interest payments for a few months.
6. Financing Yo-yo Yo-yo or Negotiation: This term applies when a buyer agrees to take a car from a dealership without having completed all terms of funding, either for purchase or lease, only to return to next day to find that your credit was not approved under the conditions initially promised.
Usually, the credit terms are less advantageous for the consumer, although there are rare exceptions where the credit report yields better results that neither the buyer himself – much less the salesman, waiting. Therefore, it is so important to know in advance the credit history because it can respresentar substantial savings.
5. Monthly Payment or Monthly Payment: Most consumers worry too much about the monthly payment, but disregard the terms that lead to a seller to offer cirta amount.
Therefore, an offer that promises monthly payments of $ 199 can be tied to interest rates and down payment too high, less value for the car that is exchanged (trade-in), longer terms or, in the case of a lease more restrictions on miles driven, for example. So a low monthly payment may seem very attractive at first, but long-term cost much.
4. Annual Percentage Rate or ARP: This information is what determines the interest rate the buyer or holder of a lease term will pay for the transaction.
This interest rate is adjusted annually based on the remaining debt: That is, the first year, the consumer will pay that interest rate for the total debt, for example $ 20,000, but if you pay $ 2,000 a principal debt the first year, you only pay interest on the remaining $ 18,000 in the second year and so on to clear the debt.
3. Destination or Transportation or Delivery Fee: This charge is absolutely inevitable and not charged or the car manufacturer nor the dealer sells, so it is not negotiable.
This is the cost that companies that transport the vehicle from its point of manufacture or port of entry if imported, to the dealer. Usually this round charge around $ 500 for the most economical cars and can climb to $ 1,000 for luxury.
2. Dealer installed optiones or dealer-installed accessories: Contrary to the above, this charge – or charges-are full discretion of the dealer uses to try to sell unnecessary accessories under the excuse that only has vehicles with those choices.
To avoid these charges, the smart consumer must configure your vehicle on the manufacturer’s website and get to the time of purchase or lease armed with the exact list of the accessories you want in your vehicle.
1. Sign and Drive !, No Credit, no problem! or Firm and manage !, Bad credit, no problem !: These perhaps more phrases used in advertising campaigns car dealers, but are far from being as convenient for the buyer.
First, take a car from a dealership without fully understand all the conditions of the sale or lease has a number of serious financial consequences and the same as the credit history because worst score, the cost of funding. So the promise of “no problem” may be true to the point of signing, but will become a long-term financial problem.
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