The more the buyer is informed the wisest is his purchase. However, there are customers who go to the dealership without doing any research. Often they get confused by the seemingly endless stream of complex information that comes with buying a car. Car dealers often use a trick which bounces profit potential from one transaction to another. If a customer is set on getting a good deal on their trade-in, a car dealer may then choose to concentrate on inflating monthly payments or the down-payment.
There is no law obligating car dealers to offer customers the lowest interest rate they qualify for. When the car dealer run your details on the credit check they’ll know your income, housing status and if or when you were late paying your rent or mortgage. Often dealerships manage to get this information when the customer is taking a test drive, and the car dealer is already adding up just what price they think you’ll pay.
And if you sign up for a higher rate than the car dealership pays back for the car, you’ve just gifted them some more. Often this difference lies in fractions of percents on your rate. Find out which rate you qualify for first.
