How to Get Dealer Car Financing

Most new car dealers are happy to provide financing for the cars they sell. Their financing options are used as a marketing tool to increase their sales, and often provide an additional source of profit as well. Car buyers can save or lose significant sums of money depending on their preparation and attention to detail in car dealer financing negotiations.

Difficulty: Moderately Easy

Instructions

1. Review your credit score before you apply for car financing. Get a credit report from at least one of the major credit reporting bureaus (Equifax, Experian or TransUnion).

2. Allow yourself several weeks, before you apply for car financing, to repair and optimize your credit rating by paying down credit balances and correcting any mistakes in your credit report.

3. Call the car dealership's finance office before you visit and ask them to run the numbers based on your credit score so that they can ensure you of their ability to provide you with an interest rate that is competitive with the current market.

4. Make yourself as much of a math whiz as you can in advance, by studying and knowing off the top of your head how different levels of interest rate, on a set amount to be financed, translate into different levels of monthly payment. Knowing these figures will help protect you against a salesman who tries to talk circles around you.

5. Separate the different issues involved in your car finance deal. Negotiating the price and negotiating your interest rate are two separate negotiations. If a dealership tries to mingle these two issues, it can easily become a confusing shell game.

6. Get the dealership's figure on your trade-in value as a separate agreement before you negotiate the price or financing terms for a new car purchase.

7. Beware of add-ons that are offered to you by the finance department. Such add-ons, such as a little extra chrome or maintenance coverage that you may not really want, are sometimes referred to as "junk fees" that go straight to the dealer's bottom line while adding significantly to your monthly payment.

Tips & Warnings

• Beware of dealer financing shell games that encourage you to focus on one part of the equation to the detriment of others. The new car price, your interest rate and the value of your trade-in and down payment are all factors of great importance in determining what you will pay for a new car. A wily dealer may try to get you to take your eye off of one or all of these factors by appealing to your excitement about getting behind the wheel of that shiny new car.