10 tips to buy a used car

10 Tips to Buy a Used Car

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For many consumers, a new car is one of the most expensive purchases and is only surpassed by a home purchase. According to data provided by the National Automobile Dealers Association, the average price for a new car in the UAE is approximately 30,000 AED. Therefore, it is important to know how to get the most convenient deal.

Think about what car model and options you want and how much you are willing to spend. Do a little research, so you are less likely to feel pressured to make a hasty or expensive decision in the salesroom and more likely to get a more convenient deal.

Consider these suggestions:

Consult specialized publications and websites with information on the characteristics and prices of new cars from Toyota Dubai. These sources may provide you with information on dealer costs for specific models and options.
Search and compare to get the best possible price by checking the models and prices published in advertisements and in dealer salons. To compare prices, you can also contact car-buying services and car buying agents.

10 tips to buy a used car
Prepare to negotiate the price of the vehicle. Dealers may be willing to haggle over their profit margin, which is often 10-20 percent. This is usually the difference between the manufacturer’s suggested retail price, also known as MSRP, and the invoice price.

You can save money by negotiating the price because this is a factor considered in the dealer’s calculation whether you pay for your car in cash or finance it – and this will also affect the number of your monthly installments.

If the dealer doesn’t have the car you want to buy in stock, consider ordering it. This may involve a delay in delivery, but the cars that the dealer has in stock may have some options that you do not want – which can increase the price. But dealers typically want to sell their inventory quickly, so if the dealer has a car that meets your needs, you may be able to negotiate a suitable price.

Learn the terms

Car sales negotiations often have their own vocabulary. Let’s look at a list of some of the terms you can hear when discussing the price of a car.

The invoice price is the initial cost that the manufacturer bills the dealer. This price is usually higher than the final cost the dealer pays because they receive rebates, deductions, discounts, and incentive prizes. Generally, the invoice price should include the cost of freight (also known as destination and delivery charge). If you are buying a car based on the invoice price (for example “at invoice price”, “$ 100 below invoice price”, “two percent above invoice price”) and the cost of freight is already included, make sure this item is not added to the sales contract again.

The base price or base price is the cost of the car without the options but includes the standard equipment and the vehicle’s factory warranty. This price is printed on the Monroney price tag.
The Monroney price tag, or MSRP, indicates the car’s base price, manufacturer-installed options with the suggested retail price, manufacturer’s transportation charge, and fuel economy per mile traveled (mileage). Federal law states that this label must be affixed to the car window and can only be removed by the buyer.

The dealer’s general price tag is a supplemental self-adhesive label indicating the price of the Monroney tag plus the suggested retail price for dealer-installed options, such as additional dealer remarking (ADM), or the dealer’s additional profit margin (ADP), dealer’s cost to prepare the vehicle, and corrosion protection.

Financing your new car

If you decide to finance the purchase of your car, know that the financing offered by the dealer may not be the most convenient, even when the dealer contacts the lender on your behalf. Make direct contact with the loan entities. Compare the financing that the providers offer you with the financing that the dealer offers you. As loan offerings vary, do a search for the best terms, compare the Annual Percentage Rate (APR), and the length of the loan. When negotiating car financing, don’t just focus on the monthly installment amount. The total amount you will end up paying will depend on the price you manage to negotiate for the car, the APR rate, and the duration of the loan.

Sometimes dealerships offer a very low financing rate for some specific cars or models, but they may not want to negotiate the price of these vehicles. In order to get special interest rates, you may need a high down payment. Under these conditions, you may find that in some cases it may be more affordable for you to pay higher finance charges on a car that has a lower price, or to buy a car with a lower down payment.

Before signing a contract to buy or finance a car, consider the terms of the financing and assess whether it is within your budget. Before leaving the dealership driving your new car, be sure to take a copy of the contract signed by you and the dealership and check that all the blank boxes are checked.

Some dealers and auto loan entities may ask you to purchase credit insurance to pay off your loan in the event of death or disability. Before buying credit insurance, consider the cost and assess whether it is worth it. Review your insurance policies to avoid duplication of benefits. Federal law does not make credit insurance compulsory. If your dealer requires you to purchase credit insurance to finance your car, the amount of the insurance must be included in the cost of the credit. This means that this amount must be reflected in the annual percentage rate.

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