Question: I was lucky enough to get a fabulous job offer just as the recession hit. I've been saving money to buy a car, preferably used. This will be my first car purchase on my own, so I wondered if I should tell them up front about the down payment amount or wait until later in the negotiations if it might bias other factors of financing. What's your advice? Kelly, Cincinnati, OH

Answer: It's always nice to hear from someone who not only got a good job despite tough times, but really likes their work. I'm glad you've been saving up for your used car purchase, too.

Now, to your specific question: I think it's always a good idea to separate the negotiation over the car's price from its financing.

First, figure out the financing and if you're going to borrow get preapproved for the loan. You should be able to get a good rate on the loan these days. The gap between used car loans and new car loans used to be much wider than it is now. The assumption in the past was that only risky credits would buy a used car. Otherwise, you'd be buying new, right?

Well, lots of people that can afford a new car are choosing used cars these days (as well as used clothing, used computer games, and so on.) What's more, cars last a lot longer today than in the past and they lose their value more slowly. According to the average interest rate this week on a 36 month new car loan is 6.24% and for a comparable used car loan it's 6.59%.

Once you have your financing package lined up I'd negotiate as hard as possible on price. Remember, when your financing is established as far as the dealer is concerned it's no different than dealing with an all-cash customer. And in today's economy anyone with savings is in a good position to buy quality at a good price.

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