How to Find a Deal When Buying a New Car
Buying a new car can be fun and intimidating.
New, gleaming models line the showroom floor, surrounded by friendly, helpful sales people. After the test drive, you sit down and start the negotiations, and quickly monetary figures are being discussed. If you have a vehicle to trade in, the numbers can become even more confusing. Finally, when asked what you want to pay per month, you give an answer, thinking at least you won't pay more than you are comfortable with. Doing so might not be in your best interest, however. Read on for some tips to help you when you are purchasing a car.
Research the price of the car you want to get the best deal
Find out what other people are paying for the model you want. Two great sites to check out are Truecar.com and Edmunds.com, where you can see the average price people paid for that model. Truecar even provides a certificate to take to participating dealers. No haggling involved - they have to honor the price on the certificate, which is often far lower than one you could negotiate. Check for any incentives or rebates on the model you like.
Have your financing approved before you get to the car dealership
After researching the price you should pay, you need to know if the payments will fit in your budget. While it can sometimes be advantageous to finance through the dealer, as in the case of 0% financing, most times it’s better to shop around for the best rate, and know what rate you qualify for. Click here for a sample auto loan calculator, so you can see how things such as interest rates and the length of the contract can affect payments.
Try to make your purchase near the end of the month
The reason for doing this is that dealers must meet a certain quota for the number of cars sold in a month. If they are close to that number they may be willing to give a better deal in order to meet their goals. When negotiating, keep this in mind: dealers get cars from the same place and pay roughly the same price, so if a deal is available at one location, it's available at other locations. Not only can you use this to your financial advantage, it also provides additional options if you don't feel comfortable with a particular dealership or salesperson.
If the advertised price seems too good to be believed...
...it most likely is. The model being advertised at the "great" price is often a stripped-down version and lacking the features most car buyers are typically looking for, such as an automatic transmission. This sales tactic is designed to get you in the door with the hopes of selling you another, higher-priced, vehicle once you are there.
You won't receive more for your car than it is worth
Unfortunately, this is true. This involves both the "too good to be true" and "all dealers paying the same price" tips provided earlier. Don't be fooled - you'll end up making the difference in payments somewhere, usually by the dealer rolling the costs back into your new car. To help get the best deal, you should negotiate the price of the car you wish to buy separately from the amount of your trade-in, so you can be sure of the amount you are getting for both.
"What do you want to pay per month" helps the salesperson, not you
Another common tactic used by salespeople. By letting them know what you are willing to pay a month, they can add in options profitable for them (sometimes while taking advantage of factory rebates to make it even more lucrative). By setting a payment in advance, you can end up paying more than you have to.
Go in Prepared
When it comes time to make an auto purchase, a little research beforehand can go a long way towards saving you money. Buying a car is a big investment, but it can also be exciting and rewarding, especially if you get the vehicle you want at a price you want to pay. There is a fine line between a dealership making a fair profit and you paying more than you have to, and we want to help you to stay on the right side of that line.
Note: These tips are strictly for educational purposes and should not be taken as advice. Links from 21st Century Insurance to third-party sites do not constitute an endorsement by 21st Century Insurance of the parties or their products and services. 21st Century Insurance has not investigated the claims made by any advertiser. Product information is based solely on material received from suppliers.
Sources: Edmunds.com; Truecar.com; Roadloans.com; MSNautos.com