The RAIN Method for Buying a Car
Using the RAIN method can help you make a wise decision when buying a car.
The average cost of a new vehicle today is around $35,000. Whether you’re looking for a brand-new car or a reliable used ride, you want to get the most for your money. The process can be made easier by following the RAIN method: First, meet with a member of the lending staff at Armco CU to secure your financing. Then begin the RAIN process:
- Research – Check out Consumer Reports, Kelley Blue Book, and other sources to make sure the vehicle you want is reliable and right for you. Use the buyer’s guide to find the wholesale price — the price the dealership paid minus any rebates, hold-backs, or incentives. That is the price you’ll use to negotiate.
- Ask – Ask the dealership for information about the average cost of upkeep. This information is critical as you examine the overall costs of the purchase. Insurance is another big cost. Contact your insurance company to find out the rates you can expect with the vehicle you are looking at.
- Investigate or inspect – If you’re thinking of buying a new car, tell the salesperson at the dealership that on this trip you will be test driving only and not ready to make a deal yet. This is your opportunity to get a feel for the car. Will it meet your needs? How does it handle? Will you be happy with it for years to come? If you’re buying a used vehicle, the inspection process is very important. Check out the exterior and interior. Take it for a test drive and see how it handles, how it accelerates and brakes. If everything looks good, take it to a certified mechanic for a full diagnostic check. It may cost you $100, but not only will you get a detailed report of the condition, most will provide you with a list of problem areas and the cost to fix them. This will be helpful for your last step.
- Negotiate – Many people find the negotiation process is intimidating, but it’s important if you want to get a good deal. Pick out two to three dealerships to visit. Tell the salesperson that you’re checking out other dealerships and the one that offers the best deal will be getting your business. Ask them “What’s the lowest price you can offer on this vehicle?” Take that number and visit your other dealerships. See which offer comes in the best. If you still aren’t happy with the offers, tell them what you think is fair based on the research you have done. If they say no, move on.
Purchasing a vehicle is probably going to be the second largest expenditure in your life. Being prepared is key to getting the best deal.
The monthly payment for a $25,000 auto loan with a term of 60 months at 2.25% APR is $441.