March 04, 2007

Hi Tony

I hope you don't mind, but I have a couple of questions for you:

1) How does sales tax work if I buy a new car from a car dealer out of state? I live in NY, but have seen great deals in other states. Do I pay sales tax twice (in purchase state and home state where vehicle will be driven)?

2) Do you have any info as to when Honda does end-of-year clearance sales? I guess that question kind of answers itself (November, December, I suspect). I'm looking for an Element. Any tips on negotiating the best price during clearance events?

3) How do I go about comparison shopping for car loan APRs without actually applying (I don't want to damage my credit w/ multiple applications)? I'd like to know what I can expect based on my credit history. (My current score is 652, w/ a Chapter 7 4 years ago. Since then, my payment history has been spotless, and I have really been working hard to repair my credit).

Thanks again for your feedback.

Li

Answer:

Hi Li,

Answer 1) You only pay sales tax once in your resident state regardless of what state you purchase your car in.

Answer 2) Year end clearance sales usually start in August or September. Just keep watching the advertisements.

As far as negotiating tips go simply remember to offer a ridiculously low price and let them come back with a counter offer. After going through this cycle several times and you will pretty much have them at their bottom line. Be tough with them, but keep it friendly. Keep rejecting their counter offers until they tell you "this is it!"

Answer 3) Visit this page on my website Car Financing Tips and check out the lending companies listed on that page. You can go to their websites and get an idea of their rates. You may have to apply to several to find out exactly where you stand. RoadLoans and Household Auto are your best bets.

Avoid letting the car dealer arrange financing for you. They will not only shop your application to numerous lenders, thereby lowering your score with all the inquiries, but they will make a ton of money on your loan to boot. Money that will be added to your loan. You don't want that. If at all possible arrange you own financing in advance either through one of the companies listed on the page mentioned above or through your own local bank or credit union.

All my very best...

Tony Iorio