Who wouldn't love owning a new car? There's a feel and a smell to the inside of a brand new automobile that's unlike anything else. For some it's intoxicating. What we despise, however, is the process of buying a new car.
Who wouldn’t love owning a new car? There's a feel and a smell to the inside of a brand new automobile that's unlike anything else. For some it's intoxicating. What we despise, however, is the process of buying a new car.
Haggling and negotiating over the price can give even seasoned shoppers indigestion. And no matter how good a deal you think you got, chances are you'll leave the showroom wondering if you got the best deal. But if you do your homework thoroughly, you might relieve some of that indigestion and begin to feel better about the deal you arranged.
Conduct Key Research
It all starts with being prepared. The auto sales gang are professionals; they sell cars for a living and most of them are very good at it. The more you know before walking into the dealership, the better equipped you'll be to level the playing field.
Consumer Reports suggests that you thoroughly research the different model cars you're considering for reliability, safety, fuel economy, and price. In addition, research the value of your current car if you're considering trading it in. Auto web sites like Edmunds and Kelly Blue Book can help you get an idea of what your vehicle is really worth. But remember to look at the car's wholesale or trade-in value, not the price you could expect to get if you sold the car privately. There are big differences between those two numbers.
It's also important to understand that there's both a sticker price and a purchase price for a new car. If you pay the sticker price, you're probably overpaying. What you want to know is how much the dealer paid for the vehicle. You can find dealer invoice information on web sites and in pricing guides, but because of bonuses and dealer incentives, the invoice price might not be what the dealer paid. The Consumer Reports New Car Price Report can help you sort through the incentive maze; as can the Edmunds and Kelly Blue Book sites.
Drive a Bargain Car salespeople often like to negotiate more than one thing at a time, such as financing, leasing, and trade-in values. That can get confusing. Upfront make it clear that you are not buying the first time you walk into the showroom. Inform the salesperson that you plan to visit other dealerships selling the same model and will give your business to the one that presents the best offer. Arrive at an agreeable price before discussing financing options and/or trade-in value for your current vehicle.
Your best bet when it comes to financing a new vehicle is to check out all of your options before going to the dealership. Know your credit score and check out loan arrangements with local lending institutions. Salespeople may say they are giving you the lowest rate available, but that's not always the case. Dealers have been known to tack on a few points to the interest rate they receive. This is known as dealer reserve, and it can potentially add hundreds or even thousands of dollars in finance charges to the cost of your new vehicle.
Perhaps the most important point, and one that's easily overlooked, is that you are in charge. You don't have to purchase a certain vehicle at a specific dealership. You can go elsewhere, and should do so if you don't get a deal that meets your satisfaction. And showing that you're serious about leaving can often get a stalled price moving in your direction.
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