Whether you buy a car from a dealership or online, there are still only two methods of payment: cash or finance.
If you have the necessary cash, good for you as this puts you in command. If you can find a very motivated seller and let him know you intend to pay cash for the car, you can very often get it for way less than the asking price.
However, you want to make sure that everything is above board before you talk about the cash. Have you taken your test drive? Have you seen a copy of the title in the seller’s name? Have you seen a Carfax or similar product?
Should all inspections say go, tell the seller you will meet him at your bank at a specified time and day. Ask him to bring a Bill of Sale and the original title document so he can sign it over to you. You will then give him a Certified Check drawn from your bank where the meeting takes place.
We are not talking about a $500 car here. If it is $500, you would still meet him at your bank wanting the same documents, but you could hand him $500. You do not want to hand a person several thousand dollars or more in cash.
If the seller has a problem with accepting a Certified Check, find out why. On the other hand, don’t ask why, just tell him that’s the way you conduct business.
Any bank meeting between you and the seller should be transacted in a spot where the bank’s security cameras can tape the entire transaction.
When you are paying cash at a dealership, you will want to know the final amount so you can bring back the check. Some car dealers will accept a personal check and then have their cashier check the funds at your bank and put a hold on them.
Read over your sales agreement very carefully as the dealer will often add extras that are not verbalized during the transaction discussions.
Should you be financing your purchase, you want everything in place before you even start looking for a car. Talk to the bank that is your lender and let them know exactly the vehicle type you are in the market for. They will inform you about the average loan amount on that car letting you know how much of a down payment you will need.
Also inform your lender that you are purchasing the vehicle from a private seller and find out all their rules and regulations for handling such a deal. Many times, they want you to make the down payment to them and they handle the rest of the dealing directly with the seller.
Even if you are going to make your purchase from a dealer, it is wise to have your financing in hand before you shop. You know what you can afford and exactly what your interest rate is.
Salespeople and finance managers at car dealerships will always attempt to increase your interest rate when you do your financing through them because they earn commission on any interest rate over and above the backer’s stated rate.
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