Submitted by: Michael Challiner

You ll have to bargain hard. For a car salesman, selling you a finance deal can be more important than selling the car itself. Car dealers have been faced with falling margins on the sale of cars and therefore they need to make up for these falling margins. Sometimes they can earn more from selling the extras such as optional extras, finance and paint treatment than from selling the car.

Our advice is bargin ith them. Get an online quote for a personal loan and use it as a bargaining tool. They may respond by giving you a better price for your car. It’s also a good idea to visit two or more dealers and then play them off against each other.

Will you know whether the interest rate offered to you is competitive? Unless you know the current APR interest rates you should qualify for, you ll be all at sea. The APR (that s the annual percentage rate) is the only rate that enables you compare one loan deal with another. And get it in writing because oddly enough, some car dealers aren t keen to discuss it! They often use the flat interest rate when they talk about finance inorder to make it appear cheaper but unlike the APR, fat interest rates do not take account any add on fees nor when the interest is paid, so it s very difficult to make a meaningful comparison.

To beat them, ask always ask the dealer for the APR of the loan they are offering. The APR will then include absolutely everything – both fees and interest – so you ll be able to compare the total cost with other types of finance available to you.

Never be tied down. Your car dealer may decide to offer a discount on the car which is dependent on you accepting its finance package. This is their way of making the profit they want but just getting it in a different way.

How can you beat this? Well, never rush into signing on the dotted line. Take time to work out whether it’s cheaper to get your car finance elsewhere.

If the salesperson quotes you weekly payments, take the longer view. Weekly repayments might look affordable but can disguise what is actually an expensive deal. For example, 70 pounds a week still means monthly payments of 303 pounds 33 pence.

How do you beat them? Ask the sales person for the monthly cost of finance and ask them if there are any additional finance costs such as upfront fees. Again always ask them for the APR in writing.

Then do your sums. Longer repayment terms are tempting, but be aware that the longer loan period, the more it will cost you in the end. By adding a couple of years to the loans repayment period, the salesperson will make their deal look a lot more affordable. For example, a 10,000 pound loan over five years at an APR of 10 percent will costs 320 pounds a month whereas over three years it will cost 210 pounds. But the extra two years credit will cost you an extra 1,078 pounds. To beat them, always be aware that a longer loan period will cost you more in the end and do your sums!

So always take your time. High-pressure sales tactics such as suggesting that the special deal is only available today are employed to convince you to sign up there and then. Always resist this sort of pressure. Never allow any salesperson to pressurise you. Remember, salespeople are there to sell and a similar or better deal will always be available tomorrow, either at that same dealer or another.

So keep your cool. Salespeople are trained to make it seem as if they’re really squeezing their margins for you. Don t be fooled, they always know exactly how far they can go before losing their commission! Don’t be fooled by the old ‘I’ll have to go and ask my boss’ trick it s surprising how many do! To beat them, just accept that it s part of the game they play. Don t be fazed by it.

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