Basic Car Buying Tips

Besides the obvious reason, that being transportation, just like water a car is now considered a necessity in most urban areas.

One of the reasons to consider when buying a car is if the vehicle being purchased is a good deal.
Is it in good condition?

How long a life does it have left?

Is it an excellent ride?

Does it have a great warranty, etc.

As we said, it’s virtually impossible to get along without a car and if you can’t afford a new car, following are some basic reasons you should consider when making that all important car purchase.

Is it a good buy?

The best time period to buy a car is later in the month. Usually, there are numerous rebate programs and bonuses offered by month’s end based on a dealer’s monthly sales quotas. The idea is, sometimes dealers fall short of meeting their sales objectives if their performance is assessed by the end of the month.

This happens more often than not. The result of this is good news to most car buyers. Since dealers are more desperate to meet their quotas, they now have no choice but to sell the vehicle at a lesser than normal price just to make the sales they need to meet their goals.

Peace of mind

Sometimes dealers will do a “dog and pony show” just for them to make that sale. The result is that car buyers then end up with features that they realize later on they do not really need with a price they actually could not afford. The moral? Don’t buy more than you absolutely need. Avoid unnecessary stress and/or sleepless nights.

Always remember to trust your instincts. If ever you feel in doubt, the answer to that is don’t — do not let yourself be pressured into making that purchase now. This is the common strategy of car dealers where they would compel the customer to buy that car, now, this moment, today!

Do not forget that you can always sleep on it and then decide. This is a lot better than making your mind up now and forever holding your peace. If the car is gone the next day, there’s probably a good reason why you shouldn’t have had it in the first place.

A Spot Delivery When Car Buying Can Leave A Mark

In the car business a ’spot delivery’ is a common practice. But just like about anything else that involves revenue, sales, and commission, there are those that are unscrupulous around us.

What happens in a ’spot delivery’ is that the buyer agrees to the terms and conditions of the loan and to take delivery ‘on the spot’… even though the financing contract isn’t yet been picked up and actually approved by the bank.

All dealerships have working relationships with various financial institutions that approve (and disapprove)the loan papers.

Sales managers work with and evaluate potential buyers credit reports and credit scores all day long in conjunction with the working relationships that they have with their various lenders. Needless to say there are many business hours that a car dealership is open and doing business that the banks and lenders are not. As such, dealers will make the decision to ’spot deliver’ a car based on the probability that they will be able to get the loan as stated in the contract from one of the lenders.

For those customers with good to excellent credit, this is rarely if ever a problem. The problems occur when someone’s credit is in the gray area. Also, more often than not this usually (but not always) involves a used car purchase.

As you might imagine, under the aforementioned business practice there would be advantages and disadvantages (as well as the opportunity for exploiting). The most prominent advantage is for both sides. For the dealer… obviously the sale. For the consumer who may need transportation, the ability to take delivery ‘on the spot’ and not have to wait for the next available approval such as when a sales takes place after hours or on the weekend.

Again, this all depends on your credit rating and if you are deemed a good risk.

The problems can occur when those who don’t have the best of credit and don’t have the income to overcome the lackluster credit, ultimately don’t get approved for the financing terms that the dealer put them in the car at.

So what happens… first of all all the contracts that I ever dealt with state that the agreement that you are signing up for is contingent upon approval from the lender. In other words, the agreement isn’t binding until the vehicle financing is approved.

If the car financing isn’t approved… the ’spot delivered’ car must be returned or you’ll have to re-sign papers for a less favorable deal.

When a dealer mis-calculates and doesn’t get a car buyer approved for the terms that they put the customer in the car with, it’s not a pleasant situation.

I know that there are unscrupulous dealers out there and this is where the window of opportunity opens for them… but that’s a whole other article and for the purposes of this one, I’m going to just stay with the idea that the dealer got a bit too aggressive thinking they could get the customer approved.

So, when the bad news comes back that none of the lenders will approve the loan ‘as is’, outside of returning the car, the customer will generally have to come up with a larger down payment (this puts the lender at less risk), accept a higher interest rate (which will mean higher payments) or in some cases have to come up with a co-signer of good credit standing.

None of these options are pleasant, and for me as a sales manager weren’t pleasant to have to be the bearer of the news either.

8 Car Buying Tips To Avoid This Situation:

1. First and foremost know what a ’spot delivery’ is (which you should by now) and know what can happen if the dealer can’t get you approved.
2. Check with the Better Business Bureau and/or only visit reputable car dealers.
3. It’s in your best interest to find your own loan rate and terms. If you can, apply for and arrange a loan so you’ll already know what you’re approved for. At the very least, talk with your bank or credit union and see what term and rate you could qualify for… you’ll then be able to compare with the dealer’s offer and get the best car deal possible for your scenario.
4. This is a biggie… especially if your credit is risky… if you finance through the dealer, after signing the papers, simply decline to take a ’spot delivery’ of the car… just tell them you’ll be back to pick up the car once the financing has been dutifully approved.
5. Give yourself a cooling off period. This is a good idea because buying a car can be a long and tiring day… give yourself a chance to get yourself back together after the rush of the car deal.
6. Read everything… ask questions!
7. Keep a record of everything and don’t pay cash.
8. Get it in writing… if you’re going to accept the car buying ’spot delivery’ it is not too much to ask to get in writing that your trade-in WILL be returned to you if the financing should fail… and… if the financing does go through but with different credit terms than you were ’spot delivered’ at… you are free to cancel the deal.