Many people are terrified of buying a car. They imagine some horrible scenario where they are somehow talked or tricked into buying a car that they don’t really want, and will be stuck paying for it for years to come. In light of certain financial events in the world economy, it pays to know exactly what you are getting involved in when making a big purchase like an automobile.

It helps to understand that car salesman aren’t evil creatures out to steal our social security check. They are working folks just like you and me, who likely have a family depending on them to provide food and shelter. Just knowing a few things about how they operate can help.

Sticker price is one thing that give many people alarm. The truth is that no dealer expects anybody to pay full sticker price. Sure they’d love for people to walk in, look at the sticker price, and write out a check, but it doesn’t quite work out like that. Most dealers are happy selling a car up to ten or sometimes fifteen percent below sticker price.

Another trap people fall into is overestimating the amount they’ll get for their trade in. If you search the Kelly Blue Book, the estimate you’ll get will be inflated. When dealers estimate the value of your trade in, they use a whole sale estimate, which is often much lower than Kelly Blue Book. They are factoring in how much they’ll have to spend to get your trade in into condition to sell.

Next is financing. If at all possible, don’t rely on the dealership for financing. Try and get pre approved from your own bank before you go shopping. That way you’ll have an outside excuse if the price falls out of your price range.

To put all these together, you should be able to figure exactly what price you should pay, and exactly what your monthly payments will be. If you shop around on the Internet before even visiting the dealer, so much the better.

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