For First-Time Car Buyers Part 2 (Car Buying Tips)

If you read my first post "For First-Time Car Buyers Part 1 (A Car Buying Tip)," you would know that I highly recommend buying from a private owner rather than a dealer. I failed to mention that you usually can get a warranty for a privately bought car.

Check out Warranty Direct at www.warrantydirect.com. At the time of this writing, a representative on the phone told me that it usually can offer a warranty on vehicles that are from 1989 or newer and with less than 150,000 miles. This company costs up to 60% less than the dealer warranties and they allow you to get your car repaired by any certified mechanic and not just a dealership.

Tips for First-Time Buyers Who Want to Buy from the Dealer
Here is a top-5 list of what is important to remember:

1. Everybody who works at the dealership is there for one reason. They are trying to make as much money as they possibly can. They are trying to sell you cars at inflated prices, extras, warranties, service contracts and much more. If they recommend that you lease rather than buy, it's because they think they'll make more from you if you lease. Every suggestion they make will be to their advantage -- not yours.
2. Spend plenty of time researching cars before you visit a dealer. Have at least 3 to 5 possible models in mind. By the time you visit a dealer, you better know what your current car (if you have one) is worth and you better at least know the dealer invoice for the cars you want. Don't pay any attention to the sticker price. People who lose money at the dealership look at those.
3. Never, never, never buy a car on your first visit to a dealership. Do you have at least 3 to 5 models in mind? The first visit to a dealership should be for a test drive. Drive the car to see what you think of it and then leave immediately. Go to other dealerships, test drive the car and leave. Do this until you have a clear idea of what type of car you liked best. Do not sit at the negotiating table during these visits!
4. Keep your emotions under control. Emotional buyers pay the most for cars. They start wanting the car so badly that they seem to lose all ability to think logically. Both the emotional buyer and the logical buyer can eventually own the car, but the logical buyer will have much lower payments. In fact, when it is time to buy, bring someone with you who could knock some sense into you if you're going to make emotional mistakes.
5. Never discuss monthly payment with anybody who works for the car dealership. Your salesman should have absolutely no clue what you want to pay per month. Keep it this way, because if he does find out, then you are on your way to losing thousands of dollars on your purchase. If the salesman asks, just say, "I'm not a payment buyer. I'm only interested in the bottom line." You can determine the monthly payment with one of the tools mentioned below.

Tools for Determining Monthly Payment

• Use this car loan calculator. At the minimum, you will need to know the anticipated selling price of the car, your local tax rate and the interest rate you expect to get for your financing. It will give you the monthly payment.
• Use the reverse car loan calculator. Enter the monthly payment you want, your local sales tax rate and the interest rate you expect to get for financing. It will tell you the maximum selling price to fit your budget. This will help you to know your price range even before you visit the dealership.
• Those who buy The Car Buying Bible get a unique printable worksheet that allows anybody to find the exact monthly payment for any car on a dealer's lot within seconds.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.