There are two methods for paying for any vehicle you purchase, whether in the dealership or with a private seller: cash and financing.
If you have cash in any amount, you are in the driver’s seat. If you find a motivated seller and you tell him that you can pay $500 less than he is asking in cash, you may be able to strike a better deal.
Buying online for cash doesn’t negate the need for inspecting the vehicle. This inspection includes a test drive, close inspection of the title document and a Carfax or similar vehicle report.
Once you are satisfied with all the terms, invite the seller to meet you at your bank at a certain time and date. Tell him to bring along a Bill of Sale and the Original title to be signed over to you. Your job is to present him with a Certified Check drawn on the bank where the meeting takes place.
Assume we are not talking about a $500.00 cash purchase here. For $500.00 you can hand over hard cash at your bank meeting. What you will not do is hand over say $10,000 in cash as you have no recourse should anything go awry.
If the seller balks at receiving a Cashier’s Check, you may want to ask him why. Then again, you may not want to know the reason. You can merely say that this is the way you conduct business.
Any bank meeting between you and the seller should be transacted in a spot where the bank’s security cameras can tape the entire transaction.
When you are paying cash at a dealership, you will want to know the final amount so you can bring back the check. Some car dealers will accept a personal check and then have their cashier check the funds at your bank and put a hold on them.
Read over your sales agreement very carefully as the dealer will often add extras that are not verbalized during the transaction discussions.
If your purchase is to be financed, before you even begin searching for a car, tell your lender exactly what type of car you are in the market for. They will tell you the usual amount of loan they make on such a car so you can figure what your down payment will be.
Also inform your lender that you are purchasing the vehicle from a private seller and find out all their rules and regulations for handling such a deal. Many times, they want you to make the down payment to them and they handle the rest of the dealing directly with the seller.
Even if you are going to make your purchase from a dealer, it is wise to have your financing in hand before you shop. You know what you can afford and exactly what your interest rate is.
Sales people and finance managers at the car dealers always try to increase your interest rate when you finance through them because they earn commission when they sell for over their backer’s stated interest.
