Car Buying Tips You Don't Want to Miss

If you dread - absolutely dread - buying a car, you are not alone. A reported 83% of Americans loathe the process of dealing with a car salesman. You would rather go to the dentist, handle a job interview, or sit through dinner with the in-laws. But, the truth is that you can make the job of buying a car less painful by getting prepared.

Chris Radomile (along with an anonymous insider co-author) recently penned a piece for the the popular and irreverent blog, "Cracked," recommending 5 key points to help the hapless car buyer. You can read the full, colorful discussion here.

The authors point out:

1. If one dealer seems to have a better price, read the small print
2. Negotiate on the total price of the car, not the monthly payment
3. The Internet is your trump card
4. Car buying isn't nearly as bad as it used to be
5. A shocking amount of customers prefer haggling

Of these five points, we would particularly agree with items #2 and #3. Doing your homework on the internet is crucial to car buying these days, and a thorough Google search can save you money in overall price and/or monthly payments for years to come. One of the best sources is the car valuation feature on the Edmunds website. You can access this tool here. Also, download one of the many available percent calculator apps so that you can quickly compute the true cost of credit.

With respect to item #1, if one dealer seems to have a better price for the same make/model vehicle, we recommend not only reading the small print, but reading the very large print that might say "AS IS." It is shocking how many people ignore this red flag. If the price is too good to be true, there could be something seriously wrong with the car.

With regard to items #4 and #5, it is true that many consumers are more comfortable with the whole negotiating process, now that they have more information available about the cars themselves. Nonetheless, car buying in some ways is even worse than it used to be, because the dealer finance departments (called "F&I") have slick software programs and aggressive sales techniques to up-sell the customer on after-market items. The best thing is to research the estimated price of the car you want before financing, calculate what the car will cost with all the finance charges, and resist buying any aftermarket items when you sign the contract. These add-ons are usually unnecessary and consist of high-profit negotiable price opportunities for savvy dealership salesmen.

After you know what the price of the car should be before financing, pull your own credit report, so you know what your score is, and do not authorize the dealer to pull another. Estimate what you think you can make in car payments per month. Do not wait for them to tell you what you can afford. Set that amount of money aside in a bank account each month for 2-3 months, to see for yourself if it will "break the bank." Only then do you know what you can really afford.

One final word to the wise. For the remaining 17% of people who do not dread buying a car, but consider it a form of suburban entertainment, don't take the family on a Sunday afternoon. Take only your spouse or co-buyer, or a truly objective trusted friend. The American car lot is not a playground, but rather a dangerous place for your financial well-being. If you want to spend a weekend afternoon with the children, go to the beach or a movie or a park. Otherwise smart people can make bad deals because they brought the whole family with them for a test drive. A few hours later, they are still there, the kids are hungry, and Mom or Dad will sign anything just to get home.