by Cody Hodge

Created on: January 20, 2009   Last Updated: January 21, 2010

When shopping for something as expensive as a car, you need to know how you can spend the least amount of money for the most amount of car. Car buying can be tricky, as dealers will lure you into a sense of finality by saying the sticker price is the lowest price they will give you. They will put out deals like 2500 cash back, or zero percent financing, which lead you to believe you are getting a great deal. Be wary though, things aren't what they seem when buying a car, let me share some experience with you.

Zero percent financing probably isn't an option for you, but that doesn't mean you can't negotiate a good deal on the interest rate. I bought my first car on my own, no co-signer for a 6.5 percent rate, when the dealer wanted to charge me 8.5 percent. It took a bit of haggling, and some searching for a bank, but most dealers have more flexibility on rates than they will lead you to believe.

Take advantage of any rebates you can possibly get. Dealers are retailers just like anybody else trying to sell you stuff, and so if they can sell for less, its better than selling for nothing. If you are a student, or if you buy as the new model year is approaching, you can get good deals on the previous years model. You can get 1,000 for being a recent college grad, or save 2,500 or more for buying an 08, when the 09 model year rolls out.

Negotiate the price first, then the monthly payment. Remember, with interest, and other costs, the monthly payment isn't the same as the amount you pay for the car. Depending on the interest rate, you could be paying mostly interest on the first several payments, so don't worry about the payments before deciding on the final price. Keep in mind, you will be paying roughly 200 dollars for every 10,000 dollars financed.

Never take the first deal they give you, even if they say its the best they can do. Always leave if you don't think your getting the best deal. Again, they want to sell for less, rather than for nothing, plus they always leave themselves wiggle room to make a profit. I bought an 07 Pontiac last year, but not before going, and then leaving, two different dealerships. It took me a few extra days, but I got the deal I wanted, and was glad I didn't overpay.

Make sure you know the value of your trade in. Don't ask for 3000 if your car is only worth 500, and don't take 500 if your car is worth 3000. Keep in mind though, that your trade isn't going to be what the car is worth. Generally, you and the dealer are just trying to get to a final number, and the rebates and credits aren't a perfect science, just a way to get the final cost to an agreeable number for both sides.

So if you can keep some of these tips in mind, you will be in good shape. You are in control of the negotiations, and not the other way around. You can negotiate over the phone too, if you don't feel as if you would do well face to face. The dealer has nothing until you sign the papers agreeing to pay, so make sure you hold out until you get the best deal you possibly can.

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