The Fast Lane to Car Buying

Pat Petillo, a retired sales executive from DeBary, FL, used a combination of traditional and online research to buy a new car. “I wanted a quality car that was enjoyable to drive,” says Pat. “I also wanted some of the latest features like XM radio, navigation and On Star.” Since none of Pat’s requirements were exclusive to any type of car, he was able to take full advantage of the best research tools new car buyers have available. “I looked at Consumer Reports for the cars with the best ratings in my price range,” says Pat. “Then, I went on the internet. When I felt I knew the price I should pay, I started calling dealers.” He then fielded offers over the telephone and via email, finalizing the deal in person. He and his wife Nancy are both very happy with their 2008 Acura RL.

Follow the Money

When buying a new car, some people are under the impression dealerships are the only car-finance option. This is completely false. Banks, credit unions and online lenders all have special programs that will match or best any dealer’s first offer. Financing information is nearly as important a bargaining tool in the car-buying process as market-value figures. Your credit score is an important piece of that financing information.

Never let a car dealer tell you your credit score without verifying with an independent source. Many web sites like AnnualCreditReport.com offer free annual credit reports from the big three credit agencies—Experian, Equifax and TransUnion—and charge reasonable rates for continual updates.

According to Sutton, there’s an even cheaper alternative. “There’s an easy way to find out your credit score: Apply for a loan at a bank or credit union. Literally, apply for the loan and you’ll get your baseline,” he says.

New-car buyers should never be afraid of their credit score. Some specialty lenders will offer decent payment plans despite less-than-stellar credit with rewards for on-time payments. Tom secured such a loan from his bank, allowing him to get the vehicle he wanted. “I’m usually not a shrewd person, but I had a lot of factors on my side,” he says. As a result, he confidently approached the dealer and got a good deal on a Chevrolet Express Cargo van, not a glamorous vehicle, but one Tom feels good about owning.

For car buyers with weak credit scores and modest means, leasing may be an option. A lease is essentially an extended car rental. However, leasing is still a serious financial commitment. So, your thorough research is in order. You may have to pay a higher interest rate or provide a larger down payment to get the car, so shop around until someone will work within your credit boundaries. Remember that a lease does not directly lead to ownership and once a lease expires, a leaser may have to pay an inflated price to buy the car.