Archive for October, 2009
When buying a new 4×4, keep in mind that you’re actually engaging in three distinct transactions: buying a new truck, financing it, and unloading the old truck. For best results, keep each transaction separate. Negotiate the price of the new vehicle flrst.That done, proceed to financing. (Big tip: Call your bank or credit union for their rates before you walk into the showroom. Armed with this information, you may be able to get dealer financing at a lower interest rate.) Finally, you can consider trading in your old truck, though you’ll usually do better if you sell it yourself.
A common ploy among salesmen is to mix these transactions. It’s a form of voodoo economics in which they take the trade-in, apply it to the down payment, and then offer a longer-term loan—all of which gives the appearance of lowering the purchase price of the new truck. Doing so makes you a three-time loser: You get less lbr the trade-in, pay more in interest on the loan, and spend more on the truck. The tactic works because most people look only at the monthly loan payment—the lower, the better.
Also be aware that the dealer cost (what the dealer paid for the truck), the manufacturer’s suggested list price, and the sticker price (which includes all special equipment, preparation charges, and other fees) are different. So when you talk “price” make sure you and the dealer are speaking the same language.