If you are about to finance a new car that costs over $25,000 a couple of percentage points in the rate of interest on the loan can make a world of difference, just this little difference can add up to well over $1,000 over the term of the loan.
Set up the loan in advance:
One of the best tips, regardless of what car you are considering, is to compare interest rates and get pre-approved for a loan. Work with your bank and credit union to get their best offer. The thing to focus on is the annual percentage rate (APR) and keep the term of the loan as short as you think you can comfortably deal with. The shorter the term the less the loan costs you.
Don’t just rely on outside financing, contact your Mazda dealer and compare the rates you have against the rates the dealer can offer. It may be that the Mazda you are considering is available at a low interest rate. Even if the dealer cannot match the rates it helps with the negotiations, it is one less thing to deal with.
Know the value of your trade-in:
You can check the current value of your car by visiting web sites that have this information. Be honest, describe your car as the dealer will see it, the trade-in value depends of the cars age, condition, mileage and the area in which you live. If the wholesale value is less than what you want for the car, sell it yourself and apply the money to the down payment.
Set your target price:
It is not difficult to find out the dealers cost for the car that interests you. Once you know this you can set a target price you hope to pay. If the car is a slow moving model you might get a great deal, even below the MSRP but on the other hand you might have to pay the full price if the car is in demand. Whatever you do, don’t forget the dealer must make a profit.
What you don’t want to do is negotiate around a monthly car payment, settle on the price long before you discuss financing or trade-in value. Another thing you want to avoid is buying extras that either you don’t need or you can buy them for less money outside the dealership.
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