Arrange financing before you arrive, then let the dealer compete
Dealer financing is not inherently worse than a bank or credit union. It is simply harder to evaluate while you are sitting in the office being asked about monthly payments, which is exactly when most buyers evaluate it.
- Filed by
- Nadia Ferreira
- Senior inspector, automotive
- Published
- Length
- 1 min read
An outside approval in hand does two things. It sets a number the dealer has to beat rather than a number you have to accept, and it moves the conversation off monthly payment and onto the two figures that actually determine cost.
Negotiate these separately
- The price of the machine, settled and written down before financing is discussed at all.
- The value of your trade-in, settled independently of the price.
- The annual percentage rate and the term, which together determine what you pay for the money.
- Any add-ons — protection products, coatings, service plans — each priced individually or declined.
Let the dealer try to beat it
Dealers frequently can beat an outside rate, sometimes through manufacturer subsidised programmes that no bank can match. Say plainly that you have an approval at a given rate and term, and that you will take a better offer. This is the ordinary use of an approval, not an adversarial move.
Before signing, confirm the rate, term, and total of payments on the contract match what you agreed, and that no add-on has appeared that you did not ask for. Read the figures on the document in front of you rather than the ones from the earlier conversation.