EchoBay Expert: I'm getting ready to do battle with the finance manager at a car dealer and need to know some strategies for negotiating the best auto loan. What are your strongest tips?
Loyal Reader: When negotiating for the best car loan possible, the best advice to follow is the timeless saying of "He who cares less, wins." Don't walk into the finance manager's office feeling that you need him to arrange financing for you; make him feel like he needs to prove that he can be of service to you.
They're probably not the only dealership in town, and let them know you know it. Dealerships need to make money, and to make money they need to convince you to get a car from them and arrange financing through them.
The best way to do this is to go in with offers from their competitors (i.e., banks, credit unions, online lenders). Unless you're dealing with a manufacturer's special, interest rates are negotiable. If you don't like the offer thrown on the table, tell the finance manager you'll be going elsewhere for your finance needs. He may be willing to come down some once he realizes you're serious.
Another step towards getting the best auto loan is realizing that you should never discuss your trade in until you've been given a set price on the car you're purchasing. Salespeople love to play with numbers and they're great at making the worst deal possible look like a steal. You're not obligated to discuss your trade in until you're ready to.
Also be sure that you avoid the temptation to negotiate the car purchase from the stance of your monthly payments. Salespeople love the line, "Where are you looking to keep your car payments?" The minute you give them the answer, they begin to calculate how much they can milk you for while keeping you within that payment bracket.
When you're in the finance manager's office, let them know that you won't be paying any nonsense or "junk" fees such as prep fees, promotion fund charges, paint sealers, pin striping, or unnecessary extended warranties.
Also be prepared for the fact that the dealer is probably going to try to play the "your credit stinks" game with you. Bring a copy of your credit report with you, and you'll be able to counter any claims they make about the interest rate you qualify for.