Automobile Financing

Auto show season tips for buyers

by Broderick Perkins

(1/17/2010) With auto show season well underway, auto buffs are getting their fill and buyers have an opportunity to check out the latest models, all under one roof.

But it's also a good time for consumers to learn the ropes about auto financing, saysAmericans Well-informed on Auto Retailing Economics (AWARE).

"While the auto show season is an attractive time to shop for a new vehicle, consumers should remember to follow the basic rules of financing," says Eric Hoffman, AWARE spokesman.

"Consumers who take the time to research their financing options are more likely to be satisfied with their vehicle purchases," Hoffman added.

It's best when making any purchase that requires financing to obtain a pre-approval first. That keeps you on budget, once you begin to shop, and it gives you the negotiating power of a serious buyer.

Shop around, compare annual percentage rates and other financing terms from multiple lending sources. If you need help, use AWARE's auto finance calculator.

Examine the difference between leasing and financing to determine which best fits your financial planning.

Learn the lingo and make sure you are familiar with common terms you're likely to hear or read in the course of purchasing or financing a vehicle.

If you have a car to trade-in, move that vehicle first and put some extra cash in your pocket and get any outstanding loans off your credit report. Kelley Blue Book and other online sources can help you price your used car right and check the price for your next ride.

Auto value and pricing knowledge is also a strong negotiating position.

Also know what options or additions you need and those you don't so you can focus on the package.

AWARE says, while attending an auto show:

• Stay within the price range that you can afford.

• Understand the value and price of optional products such as extended service contracts, credit insurance, or guaranteed auto protection. Do you really need them or are they frivolous wants? If you don't need the service, don't sign up for them.

At the dealership:

• Negotiate your price for the auto package you want.

• Read the purchase contract before signing it.

Later:

• Make your payments on time. Late or missed payments incur late fees and appear on your credit report, which can impact your ability to get credit in the future.

• Contact your creditor if you experience financial difficulty -- before you miss a payment. The lender will repossess your car if you fail to make timely payments.

Also, get some help with the vehicle purchasing ordeal -- from start to finish -- from Consumer Reports' Cars Center.

A subscription with the trusted, independent rater of consumer goods and service, for insider information, is worth the value even if you only use it for a single auto purchase.

Other related articles:

Automotive Loans: Refinancing

Automotive Loans: Shopping Online

Automotive Loans: Dealer Incentives to Buy

How to drive a hard auto loan bargain

Special Report: Hitting the Brakes on Auto Dealer Loans

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Driving a hard bargain on car insurance