You visit the dealership lot and your eyes settle longingly on the gorgeous red automobile gracing the nearby pavement. You must have it, no matter the price. Slow down and take a breath. Buying a vehicle is a substantial investment. Unless you’re paying cash, you’ll be making monthly payments for several years. Will you feel the same way about the car three or four years down the road? Or, are you merely suffering from love at first sight?
If you’re hoping to trade-in your clunker to have the value applied to your new automobile, be careful. When it comes to numbers and amortization schedules, the dealer’s salesperson is king. Too often, prospective buyers will blend the negotiations. Predictably, the salesperson will offer what seems to be an incredibly generous amount on the trade-in. The buyer, reeling from his good fortune, practically falls into the seat of his new vehicle. Unknown to him or her, the dealer’s profit is built into the monthly payments.