Use This Checklist Before You Buy A New Car

By Jon Arnold

You can hardly watch anything on TV or listen to a radio station anymore without hearing about the latest offers for new cars. They all sound too good to be true, and for the most part, they actually are. The purpose of those ads is to get you into the mindset of thinking about buying a new car and to actually get you into the dealership to start a discussion of how affordable it is and how you are losing money every day that you don't go ahead with that purchase.

But for the vast majority of people, reality sets in real quick. Those TV commercials and newspaper ads for 0% interest, no down payment required, huge discounts that make you think that the dealership would actually be losing money on the deal, free tires and oil changes for the life of the car, and sometimes even airfare to Hawaii with your purchase, what is there to even think about?

The reality of it is that these offers are real, as long as you understand the fine print, and have a credit rating high enough to qualify you to also buy an aircraft carrier. The problem is that buying a new car or even a used car is not something that most people do on a regular basis, so they don't understand how the industry works and where they have room to haggle even further on a minor point where the dealer is making big bucks.

Your credit report plays a tremendously large role in the kind of deal you are going to be able to get. Logic would dictate that those with the best credit are going to get the best deals, but believe it or not, some studies actually contradict this. In fact, there is a faction that says that people with bad credit get the best deals, because dealers can make up the profits lost on a bad credit sale by making larger profits on those with good credit.

Whether or not you believe that or if your chosen car dealership works this way is almost immaterial. You want the best deal possible, and like any other major purchase, you need to do your homework before you start shopping, so you can easily eliminate the options that are not going to work out for you, and avoid spending any amount of your time on those particular non-options.

To avoid being taken for a ride and to get the best deal possible, do your homework and keep in mind the following credit checklist:

1. Check your credit reports regularly. There are three of them, one from each of the major credit bureaus, and they are almost guaranteed to be different. Studies have shown that most credit reports contain errors, and the only way to correct those errors is to dispute them with the credit bureaus. Do this at least 2 months prior to shopping to allow the disputes time enough to clear and report correct credit data on you.

2. Understand that if you have good credit, the lending institutions will put fewer restrictions on your loan, therefore allowing the dealer to charge you more. Make sure you fully understand your lender's loan plan, interest rate and pre-payment penalties, as well as what the dealer gets out of it.

3. If you have bad credit, the dealer has less room for expensive add-ons and options because you may not get approved for more money. But you can still negotiate a great deal on some extras and add-ons if the dealer is willing to work with you on them.

4. Your best option for giving you the most negotiation room possible with the dealer is to get pre-approved for financing before you even visit the dealership. Many lenders will qualify you for a loan for a certain amount of money, and it does not have to be on a particular car or even a specific dealer. If you can walk in and be pre-approved for say $30,000, keep that information in your back pocket until you have almost finalized the deal, and then indicate how XM radio or leather interior is big on your list but you may have to shop elsewhere if they can't fit that into the $30,000 that you're pre-approved for.

Remember, it's your money and the more of it you can keep in your pocket, the better off you are. A bit of homework and planning, plus understanding how the car game is played can save you a bundle of money

For more insights and information about New Car Buying Tips and to get a free online car loan quote, please visit our web site at http://www.car-loan-resources.com