Millions of car buyers know the empty feeling in the pit of their stomach when they are about to buy the car of their dreams. On Thursday, CBS News Correspondent Jim Acosta reported the car's sticker price could be the least of their worries. In some cases, finance charges were manipulated, unapproved extras were slipped in and sometimes signatures were forged, so car deals would sail through the banks.
On Friday's The Early Show, Jack Otter, editor at SmartMoney magazine, gave some tips on how to get the best deal when buying a car.
Otter says to use the following steps when buying cars:
- Do the research on Edmunds.com
- Worry about options later.
- Don't tell the dealer how you plan to pay for it until you've settled on a price.
- Never let the salesman change the focus to monthly payments.
- Get approved for a bank loan first.
- Ask the dealership to get you a better rate. (Check bankrate.com for the best rates.)
- Don't end up upside down. To entice a potential car buyer, dealers will put together a package that
requires little or no money down, and extends the loan for five or six years. The buyer will have a car that is worth less than the outstanding loan balance. Otter says to put at least 10 percent down, and don't borrow for more than 48 months. If a car buyer can't afford those terms, they can't afford that car.
- Follow up. Car buyers should get a copy of their financing documents from the bank then check them to make sure all the numbers are the same that they were when signing the dotted line at the dealership.