Buying a car is a big deal. Outside of a house, it is often the most expensive item in our possession. It is also one of the riskiest investments you will ever make.
If you aren't careful, you can find yourself paying hundreds (or even thousands) more than your car is worth. In the worst case scenario, you can shell out the big bucks for a junker that looks good on the outside, but is falling apart on the inside.
Auto sales are rife with scammers, from the mysterious international buyers who offer to buy (or sell) only after you wire them "shipping costs" and then proceed to take your money and run, to the old-fashioned price gouging and shady dealings that have become synonymous with used car dealerships.
Whether you want to buy a new or used car, it is vitally important that you do your research.
Auto Sales Deals: Value Your Trade-in
Car dealers have a whole slew of tricks in their back pockets to lure you into the deal.
Be wary of "push, drag, or pull" deals (which often make a trade-in meaningless) as well as offers to pay off your existing auto loans (which usually just rolls current payments onto new car financing plans).
You can protect yourself by estimating the Kelley Blue Book value of your car ahead of time. Don't let a dealership convince you that your car is worth less than it is.
Price Check Your New Vehicle
These days, it is absolutely necessary to research a used car's Vehicle Identification Number (VIN) before buying. Otherwise, you could end up with a car with hidden problems. One common scheme involves passing-off junked or salvage vehicles without disclosing their history of accidents, theft, or damage.
If you are buying from a dealership, be wary of "extras" advertised in the sticker price. They will often tack-on amenities such as fabric protection to sweeten the deal, and quickly "throw these in for free" when it comes time to sign the contract.
Your best protection is to know what your desired vehicle is worth beforehand and don't crumple under the hard sell in the office. They know that you want the car and they will do anything to make you feel like you have to do it right there, right then. But remember, you are in charge. You have the money, and ultimately, the power to walk away.
Finally, be wary when a dealer tells you that they can't sign the deal right away, but need to "get back to you" with the final agreement. This can be a stall tactic. When you get the car home and fall in love with it, the dealer may call you in a day or two to say that the "financing fell through" and require you to pay a larger down payment or higher monthly payment.
Preapproved Auto Loans: Know Your Worth
The best way to avoid paying more than you can afford is to obtain preapproved financing before you even start shopping for cars for sale. That way, you know exactly how much money you have available, and the dealer can't pressure you into paying more. If you want to roll the dice with the dealer's financing, at least know your credit score before you walk through their door, and do a realistic budget to give yourself some parameters.
If you are the victim of a car buying or selling scheme on the Web, contact the Internet Crime Complaint Center. The only way for consumers to protect themselves is to report it.
Do you have any tips to make another buyer's car-buying trip a success? Share in the comments below!