FORT RUCKER, Ala. (September 6, 2012) -- You see a car dealership's commercial on TV. It has "Old Glory" waving in the sky, images of Soldiers deployed in the background and the salesperson in the commercial proclaims that the dealership salutes the troops. And you think to yourself, "I'll go there to buy a car!"

Not so fast. Just because the dealership supports the troops doesn't mean they support giving you a good deal. Car dealerships are in business to make money.

So, here are a few tips for your trip to the dealership:

1. Call your bank about a loan: Before going to a car dealership, call your bank or credit union and see what kind of auto loans you can get through them. This is important for a number of reasons.

Under the Truth-In-Lending Disclosures Act, the bank will provide you with the annual percentage interest rate, finance charges, number of payments and total overall price you can expect to pay after the loan is completely paid off. By checking with a bank before you head to the dealership, you'll have a good idea of what kind of interest rate you should expect to receive, and you'll know exactly what kind of vehicle you can afford.

Also, you can use your bank's loan offer as leverage to get the dealership to offer you a better interest rate. And you'll be able to avoid something called an "acquisition fee" from the dealership. That's a fee banks charge dealerships just to approve a loan, and the dealership passes the fee, plus added interest, on to you. reports, "Car dealership financing is not a service they provide you, it is a product they sell to you."

2. Research: Do your own research before walking onto the dealership's property. Get on the Internet and check out the value of the vehicle you're interested in purchasing. Find the price that the dealer had to pay for the vehicle -- you want to know the invoice price. With this information, you'll be in a better place to negotiate a fair bargain.

3. At the dealership, only negotiate on the final price of the car: Do not negotiate with them on the monthly payment. Why? The dealership can end up charging you higher interest over a longer period of time. The monthly payment may look smaller, but by the time you pay off the loan over a longer period of time, you actually end up paying more. So stick to negotiating on the actual price of the car.

Dealerships make huge profits off the money they lend you. They want you locked into higher interest rates. Sometimes those high interest rates are higher than your credit score justifies. Dealerships get a fee for arranging loans and then make even more money by getting you to pay a higher interest rate. Hence the reason for first checking on loans through your own bank first.

4. Ask the dealership for a detailed statement of your negotiated purchase price: Look it over carefully. Check for extra fees that are not required by law. You have to pay taxes of course, but you should not have to pay for such things as preparation fees, window etching, extended warranty, and other unnecessary expenses. Try to persuade the dealership to deduct those items off the final price. If they won't, you should consider walking away. The dealership wants to sell cars, and you might just get a telephone call from them a day or week later agreeing to the deductions you requested.

5. Pick the right time to buy a car: The best times to purchase an automobile are generally the last two weeks in December and in late summer or early fall when car models are changing out.

6. Rethink the dealership extended warranty: Think hard before you get an extended warranty from the dealership, and check to make sure the dealership has not added an extended warranty in the contract itself. Some dealerships will tell you that the extended warranty is required. That is not true, and they are trying to rip you off. Extended warranties are simply a way for the dealership to make more money. Period. Car dealerships often make five to seven times the price they actually pay for the extended warranty. If you want an extended warranty, look to other places besides the dealership -- you can usually find a better deal on extended warranties outside the dealership.

7. Say "No!" to etching: Don't pay for the car window etching that dealerships offer. Etching is where they use acid to put the VIN# on the car glass. If it is in the contract price, have the dealer deduct it from the price. Car window etching makes huge profits for dealerships. Most experts agree that etching is worthless.

8. Investigate the dealership: Check out the dealership's reviews online. Check out the Better Business Bureau website. You may discover that the dealership you considered visiting has a poor rating with the BBB, even though they have a really cool commercial on TV.

9. Don't pay for prep fees: Preparation Fees account for such things as washing the car, vacuuming the vehicle's interior, adding fluids, and taking the plastic off the new car seats. Do not pay for dealer preparation fees in the contract. Nowadays, the car maker actually pays the dealership to prep the vehicle, so you should not have to pay the dealership again for that service. You should avoid dealership preparation fees, and if the dealership will not take it off your final price, perhaps you should avoid that dealership altogether.

10. No life insurance or disability required: Do not pay for the dealership's auto life insurance or disability insurance they are trying to sell you. Don't let them tell you that these are required for the lender to give you the loan. A lender can't require life or disability insurance. Your own bank doesn't require it for an auto loan.

11. Trade-ins: If you're trading in a car, check out its blue book value before taking it to the dealership. That way, you know whether or not the dealership is giving you a close to fair price on your trade-in. Most of the time, you'll get more bang for your buck if you sell your car to a private party instead of trading it in.

12. Think before you sign: When the dealership places the sales contract in front of you, read it carefully. Read it slowly. Read it over again. Don't let them rush you. And if you get confused by all the paragraphs, lawyer-speak and fine print, do not sign it! Ask for an explanation regarding anything you do not understand. Better yet, tell the dealership you would like to take the contract home and read it over in the privacy of your own home. Also, feel free to bring it in to the legal assistance office for a review.

13. Most important advice: Be willing to walk off the car lot without a deal. If you don't like what the dealership is offering, or if you need more time to think about it, do an about-face and walk away. It may be just a matter of time before the dealership is calling you and trying to offer a better deal.

Page last updated Thu September 6th, 2012 at 11:19