A driver interested in a 2017 Mercedes-Benz GLA visited the dealership with the listing to check out the vehicle and look into financing. She also reached out to Yusuf Benallal, an Atlanta-based used car dealer and auto loan consultant, for help negotiating the sale terms. While she qualified for a 13.4% interest rate, Benallal noticed that the loan agreement proposed a final interest rate five points higher. These are called jump rates. Here’s how to avoid them.

Car buyers need to understand their financial situation and what they’re signing

Over time, Benallal has learned just how many vehicle shoppers don’t have a good grasp on responsible financing. He often posts conversations he has with his clients trying to either avoid or get out of bad car loans. While many show that the consultant is clearly apathetic toward the car buyer’s poor choices, some are in defense of the consumer.

“You have to negotiate everything at a dealership,” he tells viewers. The car’s base price, financing terms, fees, and accessories are all on the table. “If you don’t like or understand the terms presented, all you gotta do is walk away and shop the deal,” Benallal explains.

“This is why I post all my advice”

It turns out that the seller added the extra interest rate percentage because the buyer agreed to finance the car’s taxes and fees. So, jump rates often come from adding purchase expenses into the loan proposal rather than paying for them upfront.

Ultimately, Benallal was able to get her a better rate at a different bank. Keep in mind, then, that you don’t always have to negotiate with the same financial institution. Feel free to switch and shop around.

While the used car dealer thinks certain dealership practices are predatory against those less fortunate, he also preaches that when it comes to car loans, consumer knowledge is consumer power. “Please take the time to understand what you’re signing into,” he advises. “Make sure it isn’t an emotional purchase.”