If you are buying a car, do this one thing...

This may sound super basic but I guarantee you it will save you thousands of dollars when you are buying a car.

Bring a financial calculator that can calculate car loan payments. This probably is the number one factor in you getting the best deal possible when you are buying a car.

When my wife and I went to buy a car last month, the first thing the salesman said was he would sell it for $550 per month over 6 years. Well, I asked him what the purchase price was and I got a blank stare. I am asked him what the interest rate was and I got a blank stare.

With calculator in hand, I knew what the car sticker price was and knocked a thousand off of it and added an estimate for sales tax. I then took the lowest interest rate that I had seen advertised by local dealers. I then subtracted my down payment and cranked out the car payment for a 5 year loan.

Guess what, the car payment was $50 per month lower and one year less. Over $6,000 lower than the amount he quoted. Ouch!

I showed the salesman and told him that was my final offer. It took a few times going back and forth but I got exactly what I calculated. When you are buying a car, please do the same thing.

You will end up overpaying when you are buying a car if you negotiate based on the amount of the monthly payment. Instead, focus on the purchase price, sales tax, interest rate, down payment and loan term and you will get a better deal.

If you have some tips for when you buy a car, please add them in the comment section.