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10 Things Not to Say When Buying a Car

So you’ve decided to buy a new or pre-owned car. You know the make, model and year of the chariot. You even know what features you want. Now it’s time to head to your local dealer and sign on the bottom line, right? Not by a long shot. It’s now time to negotiate price. If you want to get the most bang for your buck, here are 10 phrases you should never utter in earshot of a car dealer — and why.

“I’m trying to keep my monthly payments down.”

Families think in terms of their monthly budgets, but most experts agree that’s not the way to price out a car. “Don’t be bamboozled by some superficially attractive monthly payment,” says Joe Ridout, spokesperson for Consumer Action, a nonprofit advocacy group. “There are a lot of ways for a dealer to make monthly payments appear low.” Before you walk into the dealer, know the maximum you are willing to spend over the life of your loan. By stretching the term by a year or two, a dealership can easily bring a $400 monthly payment down to a $300 payment, but you could end up paying thousands more in interest.

“Honey, what do you think?”

Dealers love indecisive couples. By subtly playing a husband and wife against each other (“Seems your wife’s really interested in the luxury package; she’s obviously got good taste.”), buyers are routinely talked into things they might not have otherwise considered. “Never show emotion,” says Robert Sinclair Jr. of the American Automobile Association of New York. “If one of you gets all excited or emotionally attached to a vehicle, then you lose your negotiating position.” Couples buying a vehicle should have a very good idea of what model vehicle they want, what options they are interested in and how much they are willing to spend before they walk into the dealership. If unforeseen issues pop up that merit further discussion, don’t be afraid to ask the dealer to give you some time alone for discussion before making a decision — better yet, sleep on it — then come back as a unified force.

“I have a car to trade in; how does that affect the deal?”

Don’t discuss a trade-in until you’ve settled on a price for the car you’re buying. Making one deal contingent upon the other just allows the dealer more flexibility in his negotiations. Do your research on the value of both vehicles and get the right price on the car you’re buying before you even mention the possibility of a trade-in. The truth is, you’ll almost always get a better price if you sell your old vehicle yourself. A dealer trade-in is a convenience, but he’s not doing you any favors. Make sure you do your research on the true price of your desired vehicle as well as the value of your trade-in (MSN Autos has tools for determining both) before you arrive at the dealership, and be prepared to sell your old car somewhere else if the dealer doesn’t offer a fair price.

“Let’s talk financing!”

Again, settle on the price of the vehicle you’re interested in before you bring up financing — don’t let the rate of a loan influence the price of the car. These days, loans may be harder to come by, but Consumer Action’s Ridout suggests that credit unions still offer the lowest rates. “Show up at the dealer with an offer ready to go,” he says, “then see if the dealer will beat it.” If the dealer is offering special low financing rates as an incentive from the manufacturer, see if you can turn that into cash back on the car instead. Then go shop around for the lowest rate from a third party. Also, keep in mind that advertised rates are usually for the shortest possible term (usually 36 months). If you stretch out the terms, the price can go up steeply — make sure you calculate the total cost of the loan and make sure there is no early payment penalty.

“Here’s how much I have to spend."

Avoid tipping your hand right when you walk in the door. You have no idea how much the salesperson is willing to deal, but if you blurt out your target price, you can be sure that he’s not going to offer you anything lower than that. Discuss the car and the options you’re interested in and let the dealer make the first offer — these days, inventories are so large that dealers will sometimes sell at invoice just to get cars off the lot. Right now, it’s a definite buyer’s market.

“What kind of extended warranties do you have?”

Extended warranties are like insurance, so treat them like insurance. Shop around to third parties and closely compare the terms with what you might get from the dealer. Ridout of Consumer Action says that dealer extended warranties never make financial sense. “You’re betting against the long-term reliability of your vehicle,” he says. “You’d be better off taking the money you’d spend and putting it in a dedicated savings account for car repairs.” If that doesn’t offer you enough peace of mind, check with your insurance provider. Usually, policies from insurance companies cost around $100 or so per year.

“I need this car now.”

Your biggest leverage in any negotiation is the opportunity to walk away from the deal. If you show a sense of urgency, the dealer may become less flexible. The dealer is always trying to move as many cars off his lot by the end of the month as possible, so try to keep the urgency on him. Maybe the car on his lot is equipped with $400 floor mats, and if you want a car without expensive floor mats, you have to special-order it from the factory, which can take weeks. For a customer who is willing to leave the dealership and shop around, suddenly those floor mats are free.

“I think my credit’s good.”

Don’t think — know your credit score before you walk into the dealership. By law, everybody is entitled to one free assessment of his or her current credit score per year. You can request yours at annualcreditreport.com. If you walk in with your credit score in hand, the dealer can’t back you into unfavorable terms with boogeyman stories about bad credit and difficulties in financing.

“It looks like it’s been kept pretty well.”

If you’re shopping for a used car, there is no way to know if the vehicle is mechanically sound just by looking at it. Before you sign anything, pay a licensed and impartial mechanic to do an inspection. According to Mike Brewster, spokesperson for the Automotive Service Association and owner of Gil’s Garage in Burnt Hills, N.Y., a professional vehicle inspection usually costs between $50 and $90, but can save you hundreds or thousands in repairs later. If the seller balks or if a dealership insists that an inspection by their in-house mechanic is good enough, tell him that it’s not good enough for you, then walk away.

“I guess all these fees are pretty standard, huh?”

Actually, some of them are, some of them aren’t. You should expect to pay sales tax, title, registration and delivery fees, but pay close attention to the other extras that are sometimes tacked on. When you see something such as “dealer prep,” that’s a fee charged by the dealership for peeling off the plastic covers for the seats and cleaning up the car. Ask the dealer to remove the fee. If he doesn’t, tell him you’re going to shop around until you find someone who will. Also, you may have heard that the “rust proofing” coating they’ll try to sell you is a sham — it is. Almost every new car these days already comes with a corrosion warranty good for six to 10 years; that’s because if you clean your car on a regular basis, you shouldn’t have to worry about this.

Sam Foley is a Connecticut-based automotive journalist who has written for GQ, Forbes, USA Today, the New York Post and various other publications.

-- MSN Autos Staff

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