Illinois bad credit car loan

Homework and a good dealer relationship can save you money

Ready to buy a new set of wheels? You'll probably head out to your local dealer, let him guide you to models that fit your budget and then take them for a test-drive, right?

If you answered yes, you're practically begging to be taken for a ride, according to Pamela Rodgers and Shirley Gross-Moore. They should know; both sisters are owners of large auto dealerships. Price, while undoubtedly a major factor in your decision, is only part of the equation. And most people calculate the price of a car incorrectly. Rodgers and Gross-Moore say that before you even set foot inside a dealer showroom, you should know basically what kind of car you're looking for, which features it must have and the absolute maximum price--including taxes, license and fees--you're going to spend. Even then, you're not ready to shop for your car until you've shopped for the right dealer.

"There are plenty of dealers who would love to have your business," says Gross-Moore, owner of Barrington Dodge in Barrington, Illinois, near Chicago. Pamela Rodgers of Rodgers Chevrolet in Woodhaven, Michigan, just outside Detroit, agrees. "Our dollars are our power," she says. "We should not support those dealerships who would take advantage of us based on our race or gender."

Indeed. A study of Nissan Motors Acceptance Corp. conducted by Howard University business professor Debby Lindsey-Taliafero, Ph.D., concluded that on average, Blacks paid as much as 90.9 percent more for car loans than their White counterparts.

If you do your homework ahead of time, you can be in the driver's seat when it comes to buying your next new car. Begin by analyzing your needs and figuring out what your new ride should cost. Rodgers and Gross-Moore recommend that you answer these questions to ease the process.

1. What can you honestly afford? Include maintenance, insurance and registration, which most folks forget when they do the math.

2. What are your driving habits? If you'll be putting lots of miles on the car, fuel efficiency is a major concern. Will a compact pop-up trunk hold the kids' sports gear?

3. What features are most important to you? If you need four-wheel drive, for instance, don't assume that you must buy a sports-utility vehicle. Lots of smaller cars can give you that.

4. Which current models fit your needs? This should be obvious, but a lot of us choose a car based on its looks rather than its functions.

Narrow your choices down to three vehicles, and then do your research. There are many resources you can consult that will help you gather all the data you need to make informed choices. Use the library, newspapers, magazines and the Internet, as well as advice from friends and family who own similar cars.

All of this research may seem tedious, but until you've put in the time and energy you won't know a good value from a bad one. You could get the best price imaginable, but if the car doesn't fit your lifestyle, it just isn't the right car for you. And if the car doesn't serve your needs, you got a bad deal.

Once you figure out what you need, then, and only then, should you visit dealerships--but only to test-drive, not to talk numbers. You might consider taking along a friend who can help rein you in if you get caught up with a fast-talking salesperson. You need to test all the cars on your list before you make a decision. If you feel the salesperson is pressuring you to make a decision right then and there, you've got reason to be distrustful. The best time to test-drive cars is on a weekday when dealerships are slow; you'll find the salespeople are more relaxed than on a weekend.

After you decide on a particular make and model, Rodgers suggests you "shop at least three dealers for price, basing your comparison on the exact same model and options." It is important to note that you are not only looking for a car at this point, you are also looking for a dealer you can feel comfortable working with. Buying your vehicle should be a pleasant experience, and whom you do business with should be a major part of the equation. Does the salesperson treat you with courtesy and respect? What type of services does the dealership offer?

When you find the car and the dealership, Gross-Moore suggests you wait until the last two weeks of a month to make your deal. Dealers are always anxious to get rid of "old" new cars to make room for "new" new cars. "You will find your salesperson more willing to negotiate at the end of the month to make their numbers," she says.

You should also be aware that like a hot fall wardrobe, new cars have seasons. "The best time to buy is at the end of the model year; that means August through December," says Gross-Moore. So if you can keep your clunker running for a while longer without endangering your safety, it's best to shoot for that window of time. Also be on the lookout for special rebates and incentives. (Web sites such as edmunds.com list them.)

Another major consideration is the relative popularity of the car you're interested in. Rodgers says, "The price of a vehicle is often driven by market demands and fluctuations." If a particular vehicle is in high demand, it may not, be as negotiable as a model that's less popular. Got your heart set on a Corvette or a PT Cruiser? Expect to pay the sticker price. On the other hand, if you're looking at a Malibu or a Neon, you'll find dealers willing to negotiate.

SIGN RIGHT HERE

The two most important factors of a loan agreement are the term (number of years) of the loan and its interest rate--they determine the total cost of borrowing money. To get the best deal when it comes to your car loan, Linda Watters, a sister who began her banking career as a loan analyst at Comerica Bank and now works at Detroit Commerce Bank, offers this advice:

* Request your credit report (available on-line from Equifax.com or Experian.com). This step is important because interest rates vary depending on your credit-worthiness; knowing your credit status can be a formidable bargaining tool.

* Avoid terms longer than five years on a car loan. Keeping the term short reduces the total amount of interest you pay.

* Shop around. Comparison shop for loans just like anything else. In general, credit unions offer the best rates on new-car loans. If your job has one, join. You can also join a relative's credit union. If you have a preapproved loan in hand, the dealership will likely offer you a better rate.

* Never accept any loan that carries a prepayment penalty. Should you come into a windfall and want to pay your car loan off early, you don't want to have to pay for the privilege.

* Do not be embarrassed about reading every line of the loan agreement. If you don't understand parts of it, take it to someone you trust for an explanation.

REV UP YOUR MODEM

The Web is the great equalizer when it comes to gathering information about new cars. Computers are color-blind, so you can be sure that information gathered electronically won't be affected by the fact that you are a Black woman. If you don't own a personal computer, it's definitely worth a trip to the library to get on-line. The following sites offer help with all aspects of the transaction:

Pricing, options and model comparisons These sites are ground zero when it comes to buying a new car. They spell out everything that relates to a vehicle's cost. Use them to get an idea of the price that dealers should be charging.

* Kelley Blue Book (kbb.com)

* Edmunds.com (edmunds.com)

* IntelliChoice, Inc. (intellichoice.com) Dealer information Take some of the legwork out of shopping. With a few specifics plugged in, these sites forward your information to dealers who will get back to you with availability and a price.

* Autobytel.com

* CarPoint.com

* invoicedealers.com

Car buying These sites will give you an immediate price that you can accept or decline. If you accept, they will purchase the vehicle for you and bring it to your home or office where you can fill out the paperwork.

* carsdirect.com

Financing The following can process your loan application on-line and secure financing for your new car.

* autocrediffinders.com

* lendingtree.com

* peoplefirst.com

Right now Lyndon Conrad Bell is probably somewhere driving a car. As senior editor-at-large for African Americans on Wheels magazine, he travels the world in search of great cars and perfect roads to drive them on. Now and then he comes home and writes about them.