Dave Ramsey's Five Important Vehicle Buying Tips

Car shopping can be an exciting activity … if you have the money.

In all of the excitement, be thoughtful and wise, since you’re getting ready to spend thousands of dollars. Here are some ways to car shop with caution and get a great deal, too:

• Knowledge is key. The most powerful thing you can bring to a car purchase (other than cash) is knowledge of what you are buying. If you know about the vehicle, what it costs and what it’s worth, then you won’t make a bad purchase. What's more, knowledge enables you to quickly spot a dishonest seller and walk away.
• Be willing to exercise walkaway power. This is where negotiations can turn in your favor. If the dealer won’t negotiate, you have the power to leave and find a deal elsewhere. That puts you in control. You’ll think clearly and won't make a bad purchase because you got car fever.
• Don’t get pressured. Dealers or ads will present you with a deal and say it’s only good until a certain date. Or, a private seller might tell you (truthfully or not) that there are other people coming to see the car who sound interested in purchasing. Don’t crack under the pressure. You were doing fine before you knew about the car and you’ll be fine afterward. The world doesn’t end with the deal.
• Ask for facts and figures, not opinions. If you ask the seller what kind of gas mileage the vehicle gets, you don’t want to hear, “Oh, it gets great mileage.” Get a concrete number of miles to the gallon. If you ask anything else about the car that is measurable, get specific answers.
• BYOM: Bring Your Own Mechanic. Definitely have a mechanic you trust inspect the automobile you want to buy. It’s not smart to trust a stranger who tells you that the car is in good shape. It’s your money, so make sure you are getting a quality product.
  

A little common sense will take you a long way when buying a car. Remember to always pay cash and never buy a new car unless you are a millionaire. Why? New cars go down in value like a rock. If you buy a $20,000 new car today, it will be worth about $8,000 in four years. You’re much better off buying a $10,000 car that is three years old and letting someone else take the depreciation hit.

Have fun and shop smart!