What questions should I ask a car dealer when buying a car?

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Below are some important questions to ask a car lender when buying a car. These buying questions are essential, whether you're looking for a new car or a used car. Especially if you're getting a car loan in order to purchase your automobile, these questions are particularly relevant.

The first question you're going to want to ask a car dealer is what their invoice price is for the car you have your eye on. Sure, you may have noticed the MSRP sticker price, but that doesn't really matter. A suggested price is just that. What REALLY counts is knowing how much the dealer has purchased the car for, and you should use that amount as your starting point for negotiations.

Sure, car dealerships make it or break it based on car sales. To stay in business, they have to keep profits coming in. But fair is fair and you have every right to know what kind of markup they've placed on a car.

As well, ask the dealer what kind of throwbacks, or cash incentives from the car manufacturer, they may have gotten on the car. If they do get any level of cash incentive from making a sale, ask to have that incentive carried over to you, which - if you're applying for a lease or loan - will lower your principal amount.

Many car dealerships will try to get you to pay extra for a warranty protection plan on the car. If you're buying a new car, know that the car's manufacturer probably already offers a full-bodied warranty that would cover basic car repair. If the dealership tries to sell you another, compare what the dealership would give you versus what the manufacturer has already given you. Make sure buying an additional warranty protection plan makes sense.

If indeed you're also applying for a car loan when buying your car, there are other questions that you need to ask:

Know what your monthly payment will be.

More importantly, ask how much your interest rate will be. A low monthly payment is great; not so great though if you end up with an extended loan term. Always think about the long run when negotiating for a car loan. Sometimes a higher monthly amount that lowers your interest rate, or shortens your loan term, is worth it.

Cut to the chase and ask how much interest you would have paid by the time the loan's term has ended.

Ask how much your APR is, which is your base interest rate plus all other financing-related fees). Get a breakdown of what any additional financing fees are for.

Ask what happens at the end of the loan's term. Would you be required to make a one lump sum payment to complete the loan?

By the same token, ask what happens if you decide to pay more than your monthly payment amount. Ideally, you'll like any surplus up and beyond your monthly amount to be applied to your principal loan amount, effectively lowering it (and the associated interest on that principal).