Zero Percent Interest Isn't Always The Best Deal

By: Jeff Neilan

When it comes to the car buying process, doing your financing homework is just as important and doing all of the research and homework about the car(s) itself.

The financing piece of the car buying puzzle is a very important source of potential profit for the car dealer, so you should not take this part of the car deal lightly.

Let�s take a look a few do�s and don�ts when it comes to financing your next car purchase.

First and foremost is for you to find outside financing first; and as a part of this process you�ll need to get a copy of your credit report/credit score.

The financing part of the car deal at the dealership can and should be an opportunity for you to negotiate the best possible interest rate you can get.

When you start by knowing up front what you qualify for and the interest rate at which you qualify for, you will then have something to base you negotiations on when you do get to the financing part of the deal at the dealership.

So, don�t pass go... until you have gotten this part settled on from an outside (non-dealership) source.

At the dealership � don�t reveal any of your aforementioned numbers that you now have.

Just in case you missed it... DO NOT disclose this to anyone at the dealership what you�ve qualified for!

And don�t let the dealer pull your credit report before you agree on the car deal part of the transaction itself. You credit has nothing to do with negotiating the selling price of the new car or the trade-in value of your old car (if you are trading); so don�t give it up.

Don�t be in big hurry to jump on that 0% financing either!

If you qualify for 0% financing from the dealer, don�t just jump right in.

When it comes to car financing every angle is worth crunching the numbers.

Many, many times if you opt for all the rebate monies available to you (which is your money the dealer is using to buy down that interest rate by the way) and use these rebates as a down payment at your bank or credit union on their low interest loan; you might just find that the 0% actually cost you more in the long run. So, crunch those numbers!

Don�t leave a deposit with the dealer. This just isn�t good practice and it sends a message to the dealer that you aren�t quite ready to get serious about the negotiations.

If you don�t feel comfortable about understanding the financing option the dealer is offering you ask for a copy of the contract so that you or someone you trust can look it over and at least compare apples to apples with the firm offer you have gotten from your outside source.

And as always...

Be willing to walk away from the deal.

Remember, without you no deal takes place for the sales person or the dealership. If you�re not comfortable, or don�t feel as though you�re being dealt with straight up... find your car somewhere else.

This can be a difficult thing to do, especially late in the game, but don�t be pressured and hurried... it�s your money.

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