Financing a Vehicle

The National Association of Consumer Advocates, of which I am a member, suggests the following tips when you're financing the purchase of a new vehicle.

• Keep your current vehicle until the amount you owe on the loan is less than the resale value of the vehicle. It's best to wait until the entire loan has been paid off before trading it in. 
• Before you shop for a car, get prequalified for a loan at a credit union or bank. Take the dealer's financing only after careful comparison and if it offers the best final terms. 
• Watch out if the dealer offers you more for your car than it is really worth. While this may sound like a good deal, they are likely adding the debt you owe on the old car to the price of the new car, or inflating other costs on your new deal.
• Never tell a dealer how much you are willing to spend per month; instead negotiate a fair cash price for the vehicle.
• Negotiate the price of the new vehicle first, before the dealer evaluates how much you'll get for your trade in. Keep negotiations separate and beware of a monthly car note that hides the price of the new vehicle and what you are getting for the trade in. 
• If you are buying a used vehicle insist on seeing the title before you sign a purchase contract. The dealer can't get the title until the loan has been paid off.
• In general, avoid buying items like theft-etching, rust proofing, upholstery protection, GAP insurance, extended service contracts, and lifetime oil changes.