K-State Research and Extension News
September 29, 2011
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Avoid Costly Mistake When Buying Car, Truck

MANHATTAN, Kan. – Negotiating the final price on a new or used car or truck is important, but negotiating the lowest possible loan rate can be just as, if not more, important, said Carol Young, K-State Research and Extension financial management specialist.

“Potential buyers can get so wrapped up in haggling over the price of the vehicle, they often do not realize that, over the life of the loan, a lower-interest loan could yield the greater savings,” Young said.

To begin the process, Young advised requesting a free copy of your credit report, which details your financial history at Annual Credit Report.

Lenders typically base their loans on review of a credit report, so it’s important for potential borrowers to review their report and correct errors or omissions that could detract from a borrower’s ability to repay a loan, result in a higher loan rate, or disqualify a potential borrower – before shopping for a loan.

After reviewing your credit history, Young advised shopping for an interest rate quote from your primary financial institution before vehicle shopping.

Ask the financial institution staff what information they found in your credit report, and what credit score they ran for your loan application, said Young, who explained that this information will help you decide whether to negotiate financing with a dealership.

In comparing prices, the financial management specialist advised looking at the total cost of the vehicle (price plus interest over the life of the loan) before buying. And, she said: “When the new or current vehicle loan is paid off, deposit the equivalent of the loan payment into a savings account to jumpstart the next vehicle purchase and save on future interest costs.”

More practical money management tips are available at K-State Research and Extension offices throughout the state and online at K-State's Financial Management.


K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by: Nancy Peterson
K-State Research & Extension News

Carol Young is at 785-532-5773