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From the Experts at

Top 5 Worst Car Buying Mistakes

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worst car buying mistakes

Next to buying a home, buying a car is one of the biggest financial decisions you’ll make in your life, and you’ll likely do it more than once. And when it comes down to how to buy a car, making a monthly car payment, or even asking yourself “How am I going to pay my car loan?”  there are so many options — new vs. used vs. certified pre-owned, dealership vs. independent seller, base model vs. higher-end options — it’s no wonder the world of cards and credit can be mind-boggling.

When buying a car, financial options can get confusing. Luckily, the experts at have some car buying tips to help you navigate your way around picking the right car, getting the best loan you can and negotiating your way to some savings. From dealer scams to credit traps, these five car buying mistakes could cost you thousands.

1. Starting to Shop Before You Know Your Credit Standing

One of the biggest car buying mistakes you can make before you even step foot on a lot is not checking your credit. Your credit scores will impact whether you can get approved for a car loan at all and the rates and terms banks, credit unions and dealership financing units will be able to offer you.

To be sure that you are getting the best rate on your car purchase, take a look at your credit scores (you can see two of your credit scores for free on before you start shopping.

If you have some time before you need to pull the trigger and buy a car, you can do a little work to fix your credit, getting you a better rate on the loan.

If you have no credit, getting a car loan is a bit trickier, but not impossible. Car loan rates are very low right now, with many dealerships running 0% offers on new models. And car loans generally have looser credit standards than credit cards because the dealer or bank knows they can always repossess the car to get their money back if you stop paying them.

This means that people with no credit can still get a car, but they’ll be paying a higher interest rate, may be required to put up a larger down payment, and they may also need a cosigner with decent credit to secure financing.

2. Not Researching Online

Thanks to the internet, car buyers have a ton of information available to them these days. Websites like Kelley Blue Book, and Edmunds all offer free information about car models, features, prices and you can even find owner ratings, car suggestions and reviews. Before you take your first test drive, you should compare cars in your price range, decide which car is right for you, and what price is fair to pay.

Once you have selected a car to purchase, be sure to get the VIN number and look up the vehicle’s history report online. It is important to check a car’s history even if it’s new. A lot can happen to a new car on the way from the factory. There have been cases of unscrupulous dealers trying to pass off vandalized or damaged cars as brand new.

Plus, brand new cars damaged in floods or hurricanes often end up on the market. Avoid bad deals and lemons by doing your research online.

3. Thinking in Monthly Payments Instead of Price

A standard car dealer trick is to talk to you about a car’s cost in terms of what you are willing to pay each month instead of the actual price. This can be confusing and is often misleading because the salesperson will use the longest auto loan term available (72+ months) to calculate your possible rates. That extended loan term may seem affordable and budget-friendly when you look at just the monthly payment, but taking on a longer loan term means you’re upside down on the loan for longer, limiting your options for trading it in.

A $25,000 car with a five-year loan has the same monthly payment as a $16,000 car with a three-year loan. The difference? You’ll end up paying $2,500 more in interest for the more expensive car.

Go into the dealership knowing the total amount you can spend and stay below that number. (Getting pre-approved for a car loan in advance will help you stay within your budget as well.)

4. Buying Add-Ons From the Dealer

Add-ons are optional features that a dealer adds to a car. Common add-ons include undercoating, CD Stereo, alarm system, window tinting, chrome wheels, pin-striping and leather seats. These features are often overpriced and used as a way to boost the sale price of the car. Plus, it’s been shown that add-ons rarely add long-term value to your car.

In some situations, such as an upgrade to a premium model, these add-ons can actually harm the resale value of a car. If you do decide that you need an add-on, check first with outside companies that may offer the service for less.

5. Not Shopping Around for Car Financing

If you don’t know how car financing works, you may think your only option is getting a loan at the dealership. Dealership financing offices usually offer auto loan rates that are several points higher than what you could receive from an online auto lender, bank or credit union. These rates are largely based on your credit score, as well.

As part of the car buying process, you should shop and compare auto loan rates from various sources. Reducing your loan from an 8% interest rate to 4% could save you a bundle on the car of your dreams.

What about getting a personal loan to finance your vehicle? In many cases, the interest rate you can get on an auto loan will be lower than what you can get on a personal loan. That’s because the auto loan is a secured loan (the vehicle is collateral) whereas the personal loan is unsecured.

However, dealership financing can be the best deal in some specific situations. For example, if you qualify for a special 0% offer, or if you have bad credit and can’t get a loan from an outside lender, dealership financing may be your best choice.

Get pre-approved for an auto loan before you start shopping for a vehicle. That way you’ll know the interest rate and amount you are qualified to buy. Plus, it gives you additional negotiating leverage because you’ve already lined up financing.

A Few Additional Tips

Just in case the above tips weren’t enough to get you to stop and do your homework before purchasing a car, we thought we would throw a few more into the mix as leverage.

Appraising Your Trade In

If you have a trade in that you will be using, then it is always a good idea to look up the value of your trade in yourself instead of relying solely on what the dealership is telling you. Print out the value you found yourself and take it with you to the dealership so when they low ball you, you can furnish a value that is higher.

If they don’t respond favorably, you may find better success selling the car as a private sale rather than using it as a trade in for your new car.

Call Your Insurance Company

Certain vehicles may carry a higher insurance premium, and this is not something we always consider when we are in the throes of the car buying process. Make a quick call to your insurance company prior to the sale to discuss any rate changes you may have so there are no extra surprises that pop up a little too late.

Find a Trusted and Reputable Dealer

If you have a weird feeling about the salesperson or the dealership you are using, then maybe you should turn around and conduct a bit more research before settling. Purchasing a car is a sizable business deal and investment and is completely worthy of a little extra time and patience.

A trusted and reputable dealer will be open and honest throughout the entire car buying process and will not try to shield you from valuable information you need but they don’t want to share. Bottom line? If you are uncomfortable, then do a little digging.


Kali Geldis contributed to this story.

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    • MrEddd

      A minor disagreement with the author. For someone with bad credit I would suggest buying a new car, but the cheapest model available. Research what the best price should be and make the dealer go with it. Dealers will sometime try to make a credit poor person pay more for the car. No reason for it. Your interest rate will be high but you can refinance it after two years of making timely payments. If a person has financial issues they should not buy any car without a minimum 3 year warranty. When I was having financial problems I bought a new Ford Festiva with no options. The dealer tried to screw me but I walked out. They called back on the next day and gave me a good deal. Car lasted for 5 years with no repairs except tires. Most used car dealers, especially the buy here-pay here ones will screw you over badly and there will be trouble with the car pretty quickly. Good Luck.

      • Gerri Detweiler

        Thanks for sharing your experience – it’s helpful.

    • Gerri Detweiler

      The issue of auto dealer financing markups at some dealerships (certainly not at all) has been documented by regulatory and consumer groups. For example, the CFPB recently weighed in on discriminatory auto dealer financing mark ups. Consumers are wise to line up financing in advance, and then if the dealer can match it or do better they can make an informed choice.

    • Ken

      Whether too buy new or used depends a lot on the brand and kind of car you are buying. A great majority of the one or two year old cars for sale are retired rental cars with 30,000-40,000 miles on them. The people who bought new personal cars are still upside down and can’t trade in their cars. You don’t want a retired rental if it is a sporty/performance car. Also, powertrain warranties on some brands (100,000 powertrain warranty on Hyundai/Kia,etc) does not transfer to the second owner.
      Also, if you’re buying a car that depreciates slowly like a Toyota or Honda, the premium for buying new is far less than for a fast depreciating car like a Chrysler, VW, etc.

      • Rich

        My credit score is decent, but I went through a chapter 7. I had bought 4 new cars from the local dealership and always had my financing (credit union) in place. Sometimes I would purchase new cars and leave with equity. Went to the same dealership after I had gone through every curse known to man and laid out my finances. I went to the dealer on a Saturday, which I learned is a no no, and got a Malibu from the Honda dealer ship and there would be one person showing me the cars one person going over the paperwork and they were pretending to be soooooooooooooooooooo busy! I left the dealership with a $418.00 car note that lasted until hell thaws out. I called my brother and told him how devastated I was to have been taken. He told me no you think you been taken! I said what do you mean? He said how much do you think the Honda dealership have tied up in a Chevrolet Malibu? and I replied they charged me $18,000 plus a $4500.00 maintenance plan (Because that was the only way the finance company would finance the car) for the 2012 so the dealer must have around $8000-$10000 tied up in the car. My brother told me the dealership more than likely received a fleet of cars from a car rental agency at a rate of between $2000-$4000!!! I figured him nuts until I later looked in the glove box and saw at least 5 yellow rental agreements, and I remembered the salesman asking me if I was familiar with a Cruze? I learned from the lesson and I managed to make them eat the car without bothering my credit, but that was a weekend that I had an ulcer. I know for certain that If a person can keep their car functional the best way to get a car is to purchase it with cash from an individual. And be sure to get it checked out.

        • justme

          FYI- the finance company can never make you buy a maintenance plan…. they screwed ya there!

    • scarhill

      Seriously, buying new is not always bad. The key is to negotiate a good price, much lower than MSRP. As a result, the depreciation hit is minimized. Also, a new vehicle will provide a nice period of no repair bills, a single repair bill on a used vehicle can quickly offset any price difference. Furthermore, when it is time to trade or sell a new vehicle purchased will be worth more than a used vehicle purchased. And finally, for many the feeling of driving a modern, safe new vehicle is worth paying a bit more.

      Number 5 is flat out incorrect. Dealers always have numerous financial sources which the buyer may not have. I have always found dealers are able to provide a lower interest rate than I was able to locate on my own. The key is to research the interest rate for which you, the buyer, can obtain from your bank or credit union. With that knowledge, it is always wise to allow the dealer an opportunity to beat the rate. Example, I recently bought a new vehicle, new not used. The rate I got from my bank was 2.25 percent. The dealer was able to offer 1.8 percent. Interestingly, the dealer’s financing was from my bank.

    • Gerri Detweiler

      Thanks for your insights Jeffrey. I have to say that when I bought my last car couple of years ago it was hard to find low mileage used vehicles for a good price; apparently they were quite in demand at the time and people were holding onto them rather than trading them in. But that may be shifting again as the economy has improved and more people are back to buying new.

      • Elkdag

        I just bought a new car. Did not want to buy another used lemon and end up having to sink money into it. Buy new…less worry.

        • Dialn911

          if you research your vehicle, you wont get a lemon.

      • kjsippel

        Gerri, I think that you were hitting the used car market just following the “Cash for Clunkers” program, which effectively induced an intentional market scarcity in the used car market. Even though the used car you were looking for almost certainly qualify for “clunker” status, it seemed as though the people who took advantage of the program where they wouldn’t have ordinarily. My observations are largely anecdotal, but seem to be confirmed by the phenomenon.

    • NewCarBuyer

      “Always buy used” is one of those sweeping generalizations that never worked well for me. I have purchased both new and used. My best experiences are with purchasing new and driving the car as long as it will last.

      • Joe Schmo

        I think the key here is to buy lightly used. Purchase a car that is about 1 year/10,000 miles in at a price you can reasonably afford. Doing that, you basically get none of the used car headaches, as well as purchase the car after its biggest initial value drop when it rolls off the lot. I have no problem with people buying brand new, but to me it feels like throwing out several thousand dollars for the satisfaction of it being brand new, without any real tangible benefits.

        • Seth Cunningham

          Bad idea. Most of these cars are obtained in less-than-desirable means, i.e. repo, hail damage. What you’re looking for is a 2-4 year old car with average miles. Lease returns are really where the rubber meets the road.

    • Credit Experts

      We can try. While the monthly payments would be the same, you would own the less-expensive car in three years (and thus be payment-free in years 3 and 4). Now, imagine that you continue making “payments” to yourself. At the end of five years, you would have a car, plus a good bit of savings toward another one. OR you would have a $25,000 car now worth substantially less than that. (Your 16K car would also be worth less, and some cars hold value better than others.) Another consideration might be insurance premiums or gas mileage. Those affect your monthly cost of driving, as well. But a salesman might ask you what monthly payment is comfortable for you — and you could find yourself with eight years of “comfortable” payments, because you were looking at that rather than total price.

      • Sal

        Do Not ever buy a car from a dealership , you pay some stupid charges dock fees ,To start with.I have worked for dealerships and know what I am talking about .They also make money off you for financing the vehicle .Do your own research on line.Look for kelly blue book and black book to find out the real value of the car.Most dealerships get the cars they sell from trade ins or the auction .Which they have public auctions you can go to. Find a friend with a dealer license and go buy you a car.Buying new is the worst thing you can do and financing for more than 48 months not smart because of the interest you pay and cars depreciate from the second you drive off the lot that is for new cars.Go to a credit union better interest rates and buy from an individual finance for four years do you homework.Run a car fax on the vehicle .get a mechanic to go with you and pay him to check out the vehicle for you. You will be happy with your purchase and save thousands if dollars. Done this many times never got a bad deal or a bad vehicle .Let the dealership pay their own dock fees.You keep laughing all the way to the bank.Like I said worked for several dealerships and did well just got tired of all their bull that goes with it.I am a successful business man today that is the way I do it .Everyone comes out happier and gets a good deal .Stay away from dealerships and new cars and dealership financing .
        good luck .

    • Gerri Detweiler

      You can try Consumer Reports and In addition, you may be eligible for a car buying service through a membership such as Costco or your credit union.

    • robert

      How many time can my car loan be sold to other finance company?

      • Credit Experts

        We are not aware of a limit.

    • Thomas Zickell

      Agreed when it comes to rates for purchasing a vehicle you can lose never top what the manufacturer of the vehicle offers I could only do better than BMW financials pricing with if I were willing to jumping through hoops and because I have used them so much in the past I would rather stick with the same company anyway. What I’m getting at is car manufactures have huge incentives especially around the new year.

      I like to lease vehicles however what you said about new cars is true. You can get a certified preowned vehicle with probably a better warranty from the factory and do just as well. But the vehicle will not be worth as much when you go to sell it because it is not a one owner vehicle.

    • Peter Lewis

      Not much use if one is after a newly released model that is so new it’s not in the showrooms yet.
      Buying nearly new makes sense, but finding the right model with the right spec can be very tricky.
      Obviously you lose quite a bit driving a new car off the dealers forecourt, but at least you know the cars true history.

    • Bluffguy

      ALWAYS take the rebate and go through regular financing.

    • Collings290

      Another KEY POINT not mentioned is that dealers may typically run your credit score multiple times!!!! This is (usually) BAD. The more you run your score, you will lower credit score, sometimes by 20 points. I believe the factors used to calculate by the credit houses, which are closely guarded secrets, include the thought that the more you have your score run, the more credit cards or major purchases ( in other words Debt) you’re seeking to take on. Not a good thing in general.

      • Don Pease

        I know this was from two months ago, but I just want to clarify that if you are actively car shopping, the credit bureaus will delay factoring in car/house/school loan inquiries for 30 days, meaning as long as you don’t take longer than a month to find that car, you don’t have to worry about those inquiries affecting your chance at getting good financing. Obviously the inquiries will hit after the fact but at that point you’ve hopefully already purchased a car, and inquiries are generally a short-term effect on the score itself, even if they stay there for two years.

    • NoDeal


    • NoDeal

      If you actually run the numbers for items involved in owning a vehicle it is never a good idea to purchase a new vehicle. Add up the cost of the vehicle, sales tax, dealer fees, finance cost, repair and maintenance, insurance, state excise and registration fees for both a new vehicle and a used vehicle. Then deduct the resale value of the vehicle. You can run these comparisons on any interval i.e. 3 years, 5years, or 10 years. If you purchase a used vehicle with 80,000 to 100,000 miles vs a new vehicle you will end up spending $8,000 to $10,000 more for the new vehicle.
      That is more than enough to cover an unexpected transmission problem and I still come out ahead by $5,000 to $7,000. Thankfully there are people that like the smell of a new vehicle.

    • Tlyman

      I have a idea, if you can’t pay cash for the car, DON’T BUY IT!! Just because you want a nice car to keep up with the Jones’s does not make it right. Save, buy a car with cash. Save more, sell or trade your car and add cash buy a better car. Guaranteed you will never have to every worry about interest rate or being upside down with this method!!!!!!

    • Jonson

      I’m looking at a new car, a Subaru. Round numbers the car costs 20k new. I could get one that’s two years old with 35k or 40k miles on it for around 17,000. I could buy a 5 year old model with 100k miles on it for around 11k. I plan to get 200k miles out of the car–maybe a little more. Why would I spend more than half the price of a new car on a car whose life is half over, when I only get to enjoy the worst half of the car’s life. Seems to me the person who buys the car new gets the best deal.

      • RgR

        At 20k, you’re absolutely right. No consider a 230k S65 AMG, after 5 years is 79k – see the difference here?

      • Joe Schmo

        A 2 year old car with 40k miles on it, with only 3k knocked off the new price is a rip off, regardless.

    • Lindsey

      I bought a used Mustang and paid most of it in cash, but left about $1000 just to build my credit a bit more. The dealership not only wanted 14%, allegedly because of my credit rating, which was already good, but also added $500 for “administrative fees” which I didn’t notice until AFTER I had signed the contract. I had taken a workshop on what and what not to tell these car sharks, but absolutely missed that one by accident. When I questioned them, I was told that $500 was for their “Christmas party”. I asked to speak with the manager and was told her was at lunch. I was made to wait over 30 minutes until he came back from lunch and then spent another 30 minutes trying to get him to explain the $500 charge. He accused me of being “defensive”. I told him he was the one being defensive, as he wouldn’t explain that charge to me. He finally admitted it was, indeed for their Christmas party and bonuses. They also wouldn’t allow me to test drive the car except on a road where the speed limit was 45 mph. I later (too late) figured out why. I should have torn up the contract and made them do it over, but I didn’t think, once I’d signed it, I could do that. If I had it to do over again, I certainly would, because I had told them how much I would give them for the car. It was simply a sham to avoid calling it “dealer prep” which is no longer allowed. NEVER give them your payoff on your current vehicle; DON’T let them know if you have a trade-in, get the best price on the car you want to purchase FIRST, then deal on the trade-in off of that price; NEVER give them your Social Security number, because they will run a credit check on you in a heartbeat; DON’T tell them how much you can afford or what you want your payments to be because that is exactly what they will sell you and then some. My daughter had two instances where (1) she was leasing a car and she hadn’t even driven it yet (!) until I went with her to make sure she read the fine print before signing on the dotted line (they hate it when they have to sit and wait for you to read the contract) and I found out what they were doing (she wasn’t 21 yet); and (2) she walked in to inquire about a price on an SUV and the salesperson immediately wanted to know her Social and her payoff on her current vehicle. Fortunately, I had taken the workshop and was able to let her know what not to tell them. When they asked her something she shouldn’t tell them, I would touch her knee. Those salesmen went running to their manager!!!! They were not happy with me being there. They watch for people to walk in that have STUPID or SUCKER written across their foreheads or on their shirts. DO YOUR HOMEWORK!!!!!

      • LB

        Very insightful! Thanks for posting…I have to turn in my lease July 1 and am looking at buying used.

    • Common Sense

      The worst mistake is that people buy grotesquely over-sized vehicles that neither they nor the roads need, and which they then can not maintain nor operate properly.

    • Homer

      Completely disagree with #1 in this article. With a used car you lose your manufacturing warranty. You also are subject to higher APR’s depending on the year of the car and your credit. Also, because of the economy, used cars are not as cheap as they were. An SUV with 100k miles on it can still run anywhere from $10,000-$15,000. Sure you can by a strip down something for cheap, but is your used car dealership being honest? I just went shopping and found a Pathfinder 2008 44,000 miles and fully loaded. Upon my further inspection, I found chipped paint and rust on top of the vehicle that “they didn’t know about, but thanks for bringing that to our attention”. Sure, what other goblins am I going to find under the hood.

      The warranty is HUGE. Cad converter is $800-$1000 to replace, AC=1000, Tune up=199, radio (Factory most expensive) = $800-1000. Drivetrain warranty after 100k miles…gone. Transmission, $1500-3000. Plus with a used car, you still have to keep up with tires, shocks, etc. It’s not like that just goes away because you buy a used car. In the end, it’s a wash. Just be smart, and focus more on what you need and what % of your monthly budget can be used for your car payment. Cars are like boats, money pits. You don’t win either way. Just be smart.

      • nosugarshane

        That’s completely wrong. The manufacturers’ warranty stays with the car until the it goes past the term or mileage limit on the warranty. The number of owners is not relevant.

    • frisker

      i disagree with number 5. i buy mercedes automobiles, and their financial services outperforms the auto loan market for low rates. I can get a 0-3yr. old used benz from a mb dealership and get financing for as low as 2.99% for up to 72 mos. My last car finance from them was 1.74%

      • Credit Experts

        Good to know. Thanks for sharing. However, we think it’s always a good idea to know what your options are (and to have some idea of what your credit profile looks like and how likely you are to be approved).

        Thanks for joining the conversation.

    • Ken

      Being a share holder of Ford stock I receive nice discounts on new Ford products. Price on same 1 year older model with 7000 miles was $600 less.
      Dealer financing on New Car was 48 months at 1% plus $1000 rebate. Loan was required to get rebate. Could be paid off early $50 minimum processing fee. Used car rate was 4% interest no rebate. Figuring the total cost of ownership along with 1 year less on warranty buying used would have cost me more.

      Something to think of is setup a replacement car bank account. Continue to make payments into the new account. A plus is you are used to making this payment the money is not missed. When you need to replace that car you have some if not all of the money saved.
      I had saved enough to pay cash. I fook the loan for 60 days paid the $50 proceeing fee. I was $950 ahead of paying cash for it.

      • Credit Experts

        Good for you. There are exceptions to almost every general rule — and running the numbers for yourself is the best way to know for sure.

    • J-Dub

      OK, neither of these is correct. Have the dealer show you the print-out of the full “deal structure” showing the rate you have from your credit union (get pre-approved before you go to a dealership) and the incentivised rate (0% or whatever). Or, as some car companies do, their standard rate with rebates. Then you decide. What you’ll notice is that there will be little difference. It’s math. If the dealer won’t or claims that it is unable to provide you with these comparison numbers then it’s time to go somewhere else.

    • J-Dub

      And the reason is that you had an established relationship with your credit union. Credit union financing has a different set of rules for loans and rates than conventional financing sources. The rate quoted you by the dealership was not inordinately high at 15.9 for a 600 score. I always recommend that you shop for your money before you shop for your car. They are both “products” and they are both part of the negotiation. And, I would maintain that a reputable, new car dealership with a manufacturer’s logo over the door is NOT “hosing” you at a higher rate. A dealership is allowed to “mark-up” a rate in order to improve profit. There is nothing either illegal or wrong with it. Dealerships work on slim margins.
      The biggest danger is for a customer like Samuel to invoke previous purchases, rates, etc. Rates change due to economic conditions, credit strength changes, incentives change, etc. Don’t be so arrogant that you think you know it all. I see customers all the time who either can’t do or refuse to do 4th grade arithmetic such as multiplying $300 times 72 and expecting to get a $25,000 car with $1000 down–you can’t do that even at 0%.

    • BayronPosas

      Here in Texas the dealer can markup rate 2%. Your credit sucks even if they gave you that 2% your rate is still super high. Pay your bills on time and make sure you fulfill your debts then you won’t have that problem.

      • Dialn911

        its not always that simple. I had good credit and worked as a police officer. Then I was hurt on duty and later found out I had Chrons disease. I lost my house and had no income for several years before being granted disability. COnstant hospitalizations and medical destroyed my credit. I have a perfect payment track record for my credit cards, car loans, etc. but still destroyed credit from all the other issues.

        For many, its much more complicated then not simply being careless. Sometimes situations beyond our control destroys our credit score even though we have good payment history otherwise.
        It’s too bad that portfolio lending is a lost art.

    • Christian Winbush

      My credit is bad , what should I do ?

    • Gina Love-Aguilar

      I’m a woman who knows nothing about fixing a car. Especially these computer operated vehicles of today. I always buy from dealerships and I always buy lightly used cars. I have been blessed enough that the cars that I select do not need repairs, for the most part, but if they did, I have the peace of mind to know that I am always covered by an extended warranty plan. This to me is worth the relatively high price. Although I only paid about $2,600 each for my last two warranties, they are worth it, I think.

    • Gerri Detweiler

      This sounds questionable. Read: CFPB extended warranty questions.

      • dk

        Now they are saying they had to mark down the price of the SUV to get the loan Agreed to 9500 they had to drop it to 8900-1000 I put down 7900 but they still have not answered why I was told by the finacial officer that the extended warranty had to be included i also find it strange that before I even agreed to buy it the sales man came to me and said we are looking at mid 250s for 60mths i am going back Thursday any advice they said they will drop the EW but is there anything else they might try to pull? Will the bank cancel the loan they gave me? Any info apprecited

        • Gerri Detweiler

          Please talk with a consumer law attorney with experience in auto lending. They are in the best position to review your documents and tell you want your rights are, as well as suggest how to proceed. As much as we’d like to help, this is no doubt a large amount of money and in my view it would be well worth it to get a consultation (which you should be able to do for a reasonable cost). Visit the website of the National Association of Consumer Advocates where you can search for one locally.

    • ddm1959

      First of all, if you have negative equity then, you need to get off the lot until you pay off your old debt, then consider purchasing a car with cash only later.

    • Dan

      Sounds like someone works for a dealership. As a former auto loan analyst for one of the top auto lenders, here’s why you should buy from a dealership:

      1. Manufacturer’s finance divisions (i.e., Toyota Financial) have the lowest rates most of the time. When you go through a dealer, that financing is available to you.

      Here’s why you SHOULDN’T go through a dealership:

      1. Dealer’s compare rates among banks, but have little to no motivation to give you the best rate. Why? Because

      a. Banks pay dealerships to send them loans. For example, Capital One has a program which gives kick backs to dealers for giving them your loan

      b. Banks let dealers charge a rate higher than what the bank offers, then share in that rate hike. It’s called Participation, and banks and dealers are in trouble because it’s known to be racially discriminatory

      2. Dealers often use this as a tool to pretend to give customers great deals. This means you get a great price on the car and a horrible rate, so in the end you pay more than MSRP and a standard loan rate

    • kristina smith

      This is not accurate. Generally the interest rate was better than what I could get at my local credit union or bank. Plus LOCAL service beats an automated teller every time! You can easily save yourself lots of running around by just letting the dealer know what you can get and seeing if they can beat it. No brainer

    • Jackalope

      Some good points if we’re talking generalizations, but there are specific cases where the article is wrong. For example, purchasing a new vs. used Jeep Wrangler Unlimited. The resale value on these cars is so high that people are paying 80% of the price of a new one for a used one five years old with over 100K miles. In this case, new is a much better choice than used. So when doing all this online research, one thing that should be carefully researched is resale value of previous models. Luxury cars, for example, drop like a rock. One of the best buys on the planet is a $100K luxury car that’s about five years old. Frequently (because these buyers have multiple cars) you can find a very low mileage example for a song…allowing you to drive top of the line for budget prices. But the flip side is very high resale cars from Jeep, Corvette, Porsche, etc. where you’ll pay a ton just to get in a ten year old clunker.

    • Clement Joshua

      One trick I have always used when buying a used car from a dealer, after researching the vehicle of course, is to buy it with my American Express card. The advantages to this are many, but one is, if done right, is an interest free loan. Another is the car is yours, you hold the pink slip. Now, you may be asking, How do I pay the AMEX at the end of the month when that comes due? The secret here is to transfer the balance to a 0% offer on another card. You have to be aware of closing dates on your cards and if done right, your first payment isn’t due for about 4 months. The payment may be higher for the months you pay off the credit card, but only for a year to a year and a half, Compare this to a car loan for 36 months or more. It takes some planning and discipline, but you save a ton of money and if all goes really bad (you won’t let that happen, right?), the car is still yours and can’t be repossessed.

    • James

      I traded a truck that the payoff was 44000 I got a car that with me being upside down us about 40000 I got a check from ford for 4000 as a refund is it mine

      • Gerri Detweiler

        It sounds like it but I can’t say for sure. Proceed carefully.

    • Net Auto

      Great advice! Buying a slightly used car can save you thousands of dollars upfront. Always make sure you get the best deal for your situation!

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