Preparation

CAR SHOPPING SURVIVAL: PREPARATION

“The man who is prepared has his battle half-fought.” –Miguel de Cervantes

Okay, so maybe comparing car shopping to a battle is slightly melodramatic, but it is important to recognize that a prepared shopper is a smart shopper.  Before stepping foot into a dealership, prepare yourself by doing the following:

Know what car you’re looking for

Not only know what car you want, but know everything about it.  The key to knowing what you’re looking for is researching the vehicle’s value, appropriate pricing for add-ons, and what other dealers are pricing the vehicle at.

                Research, Research, Research…

Kelley Blue Book (www.kbb.com) and NADA Guides (www.nandaguides.com) are great resources for vehicle values.  If shopping used cars, Kelley Blue Book will likely be your best resource.

When comparing vehicle pricing at different dealerships in your state, Edmunds (www.edmunds.com) or Auto Trader (www.autotrader.com) provide several vehicle options at different dealerships.  This is a great way to compare prices and get a feel for the value of the car you are looking to buy.

At Royal, we price our cars based on the market. With the power of the internet, we research the competition daily, so you can be sure that our vehicle prices are very competitive.  This means you do not have to be a good negotiator just to get a fair deal.  Royal has created a Fast, Fair, & Simple process that keeps the customer in charge at all times.  (Click to learn more)

Research local dealerships

Perform some background research on your dealership options:

Know what they stand for and how they do their business

Will you get the answers you need without getting a headache?

Look at customer reviews online

Do they have a good reputation?

Are past customers satisfied with their experience and the price they paid for their vehicle?

A great places to look at customer reviews is DealerRater (www.dealerrater.com)

Do some further research on their service department

How well was the vehicle reconditioned before you bought it?

Did they replace any worn out parts?

If so, did they use the top of the line, or cheap aftermarket parts?

   (*note: Royal is meticulous about using only the best quality parts)

Credit Cards: Are they good or bad?

CREDIT CARDS: ARE THEY GOOD OR BAD?

The average American carries 3.5 credit cards.  While experts agree that having a large amount can be one of the easiest ways to rack up debt, they also note that there is no right or wrong regarding how many credit cards any one individual should have.

Credit cards can be wonderful: they can build your credit score, give you rewards points, and qualify you for warranties and other bonuses.  However these benefits are only truly beneficial when you pay off most, if not all, of your balance every month. The moment you neglect to make a payment on your credit card, credit cards become extremely horrible. Not only do you start owing more because of interest rates, but your interest rate can go up! Not making payments lowers your credit score.

What about store credit cards?  Applying for a store credit card is especially tempting when they promise 10, 15, or 20 percent off of your purchase.  But experts say that when you apply for a store credit card, 20 points are taken off of your credit score. So, if you really must, limit yourself to one store credit card, perhaps to a store you shop at frequently.

Check Your Credit Report

CHECK YOUR CREDIT REPORT
You may be unaware of missed bills or other payments, so checking your credit report may make you aware of missed payments or other problems that you can improve on.  It can also reveal some things that aren’t meant to be on there, such as errors by banks or credit institutions.

There are 3 credit reporting agencies (Equifax, Experian, and TransUnion), and each is required by federal law to provide a free credit report once per year. You can submit for your free credit report by visiting AnnualCreditReport.com or by calling 877-322-8228.

Look over your report carefully. There are a couple things you can look for:

  • Late or overdue payments that are listed that you might be able to prove that you actually paid
  • Is there another name or address listed under your name?  Only your name should be listed on the credit report.  If there is anyone else, you might be the target of identity theft.

If there is incorrect information on your credit report, you must notify both the credit bureau and the information provider (i.e., wherever you got your credit report from).  Include copies of any documents that may support your claim (cancelled checks, statements), but be sure to keep the originals for your records.  Send your credit dispute by certified mail with return receipt requested.  The investigation will take about 30 days, and you will receive notification of the results of the investigation. If the credit bureau finds that there was, in fact, incorrect information on your report, you should be sure to contact the other 2 credit bureaus to make sure your report is updated with the correct information.

Conflicting Credit Scores

CONFLICTING CREDIT SCORES

Conflicting Credit Scores
QUESTION: For several years I have been signed up for a credit monitoring tool so that I can keep track of my credit. I was recently very surprised when I went into a dealership and I found out that the credit score they told me I have was different than what my credit monitoring tool said I had. Why is my score different?

ANSWER: When you are talking about your “credit” you are really referring to the financial history and information about you that is recorded within the three main credit bureaus.  They are: Experian, TransUnion and Equifax.  Generally the information is the same between all 3 bureaus, but what many people don’t understand is that lenders don’t all look at this history the same way. Whether you are talking about a home loan or an auto loan, each of these industries uses different criteria and assigns different weight to the data within your credit history.

For example, a customer that recently visited us found out that his score pulled by the dealership was actually 100 points lower than his credit monitoring tool. This was because the criteria used for purchasing an automobile was different than the criteria that was being used by his credit monitoring tool. While the credit monitoring programs that exist are wonderful for monitoring issues such as identity theft, it is important to realize that the score they assign to you will not always be the same if you decide to take a loan for a large purchase.

Businesses that make financial assumptions each use different methods or ways to evaluate your credibility as a person (your “credit worthiness”) and some lenders may not care as much about specific transactions or types of activity on your credit report as other lenders do. If you have concerns about what information was used by a lender to determine your credit score, a great tool take note of is the “risk based price notice” form that should be given to you by any dealership that pulls your credit.

If you ever feel that your credit history contains erroneous or inaccurate information, it is very important to get it corrected. Remember, a better credit score can have the potential to save you thousands of dollars in interest. For examples of how credit score can affect your finances, read more at www.ineedcarfinancing.com.