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Public transport doesn’t meet the transportation needs of many Americans and an increasing number of people are deciding to own cars.

The easiest way to pay for a car is by cash or check but not many people can afford to pull out $20,000 to buy a car and drive it off the lot. Hence, most car buyers need to take up one form of auto loan or another.

However, most car buyers are often fixated on the price of the car and they’re only concerned with getting enough money to buy the car. Yet, they forget that many more things go into car ownership beyond the sticker price of the car.

Hence, while it is a good thing to haggle with the dealer and pay significantly less than the asking price, you can also shave off a few thousand dollars from the “total cost” of the car if you negotiate smartly when taking a loan for your car.

Here are four things you can negotiate when taking an auto loan.

1. Negotiate the auto loan terms

After you’ve decided how much you’ll need as your down payment to buy the car, you’ll need to negotiate the loan terms with the lender before you sign the dotted lines. It is important that you get the best Annual Percentage Rate (APR) and interest rate on the auto loan. The APR and interest rate simply refers to the cost of the loan and how much you are paying the bank for borrowing the money.

You can shop around from multiple lenders to ensure that you obtain the most cost effective APR and interest rate on the loan.You should also negotiate the length of the loan and try to ensure that a lengthier loan term is not necessarily bedeviled by a higher APR and interest rate. It is also in your best interest to ensure that the lender doesn’t apply a prepayment penalty to your auto loan, because the sooner you can pay it off, the better.

2. Think critically about the add-ons and options

When people buy vehicles, they usually opt for some add-ons and options that significantly increase the total cost of the car. For instance, features such as heated seats, dual-transmission, tinted windows, and anti-theft features might increase the cost of the car. Hence, you need to be sure that it won’t be cheaper to get the add-ons from third parties and that the adds-on won’t increase the auto loan by more than you’re willing to pay.

In addition, you might want to think twice before you include optional financial products when taking an auto loan. Car buyers should make an informed decision about Credit Insurance, GAP Insurance, and Extended Warranties. If you’re not convinced that you need an optional finance product, don’t allow the lender to pressure you into borrowing more money than you need.

3. Use trade-ins and down payment as leverage

Many second-time car buyers often approach dealers with a plan to trade-in an old vehicle for a new vehicle. More so, first-time buyers who don’t have a vehicle to trade in usually prepare a down payment when they want to buy a car. If you’re doing a trade-in and/or down payment, you can use the value of your trade-in or the amount of your down payment as leverage.

If the trade-in vehicle is in good condition or if you have a substantial amount saved as a down payment, both dealers and lenders will be eager to have your business. Don’t allow any dealer to downplay the value of your trade-in or down payment. You need the car but they also need your money.

4. Get a discount on as many fees as possible

After succeeding in reducing the cost of a car, many buyers often assume that they have found a bargain and they’ll elatedly agree to pay other fees associated with the loan or with the car purchase. A smart buyer must understand that you can pay much more if you don’t examine other fees associated with the purchase.

Hence, you should try to negotiate and get a discount on other fees such as the document fees, delivery charges, origination fee and dealer preparation fee, among others. Nonetheless, it might interest you to know that taxes and registration fees are set in stone; hence, you won’t be able to get a discount on either, but with all of your other tactics, you’ll still come out ahead.

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