9 Car Buying Tips: Get the Car You Want at a Good Price
When it comes to buying a new car, what you don’t know may cost you. The following steps will help you price and negotiate to buy the new car you want and hopefully shorten the car-buying process. But more importantly, we want you to have the satisfaction of knowing you got the car you wanted at a good price.
Establish your budget
The decision to purchase a vehicle should start with this question: how much can you afford to spend on a vehicle? You should also decide how you're going to pay for the new car: Finance with a loan? Lease the vehicle? Pay cash? Each financing method has its own benefits. Paying cash is the easiest as far as negotiating, but is not always an option. So, do you lease, or take out a loan to finance? Here’s a great comparison between leasing and buying to help you with your decision.
Price the vehicle you want
The price of a new car is usually negotiable. But how much of a discount can you expect? Truecar.com is a valuable resource for researching and finding out what others are paying for the car you want. They even have a pricing guarantee to help eliminate high-pressure sales tactics. Numerous websites can give you the invoice price of a vehicle. Once you have the price of what the dealer paid, negotiate up from that price, rather than down from the sticker price. Make sure that when you get the invoice price that it includes all the options you want, as the options have a dealer markup as well.
Research available rebates
Check Edmunds.com for the latest incentives and rebates available for the car you want to buy. Remember, not all incentives apply to every model, and may vary based on location. Additionally, to get low-interest financing your credit must be very good.
Get the most for your trade-in
Trading in your old car doesn't give you its full value. However, doing a trade-in is convenient and offers some advantages. You can conclude all of your car-buying business in one visit. You can unload a hard-to-sell car with no hassles. And in some states, trading in means you pay less sales tax on the new car. Selling the car yourself is usually the best way to get the most for your vehicle, but you have to balance the additional money you may receive with the hassle of negotiating with potential buyers.
Try internet shopping
Hate dealing with pushy salespeople? You’re not alone. While you may have once felt at their mercy, you now have additional options. Consider internet sales when buying your next car. Many times internet salespeople will offer a price on the car, hoping for a quick sale, and eliminate the negotiation. Shopping through a dealer’s internet sales department usually saves time, hassle and, most importantly, can save you money.
Negotiating the deal
So, while internet salespeople can be willing to give price quotes over the phone or e-mail, this wasn't always the case. Car salespeople wanted you in their office. If you do decide to visit a dealership, here’s a good negotiation tactic: get quotes from at least 3 local dealerships. Take the lowest of the prices, call the other dealerships and say, "I've been offered this car at this price. If you can do better, I'll buy it from you." They almost certainly will give you a better price.
Here’s an additional tip: According to Beatthecarsalesman.com, a website run by a former car salesman and created to help consumers, the last weekend of the month is usually the best time to get dealers to negotiate. Dealerships chart sales on a monthly basis, with specific quotas that need to be met. Salespeople earn bonuses based on the number of vehicles they sell in a month. Put these factors together —when sales managers are more likely to negotiate to meet their quotas and salesmen are trying to achieve their bonuses —the best time of the month to buy is at the end. Additionally, dealerships ramp up their sales efforts on weekends, trying to sell as many cars and trucks as they can in a two- or three-day period. Use this to your advantage: plan on buying your vehicle on a weekend, and preferably one near the end of the month.
Avoid the add-ons
The supplemental sticker lists items that usually are high-profit items for the dealership. Common add-ons include anti-theft devices, window tinting, sportier wheels, all-season floor mats, splash guards, wheel locks, cargo trays and alarm systems. Some buyers may want these extras and be willing to pay a reasonable fee for them, while others aren't interested; it’s up to you to decide. To get the best deal, make sure you know the dealer’s cost for these items before you start negotiating.
Check the fees
It’s not just the cost of the vehicle — there are additional fees when purchasing an automobile. Many buyers focus on the cost of the car and ignore the related expenses, which can be substantial. Besides the cost of the car, you have to pay sales tax, registry fees and a documentation fee. Here’s a quick guide to let you know what fees you should pay when buying a new car.
Check before you sign the paperwork
Once you have settled on a price for the vehicle you are going to buy —whether through the internet or on the showroom —make sure you stick to that price. The finance manager may try to sell you additional items, such as fabric protection or additional alarm systems. While they are doing their job, we recommend avoiding these extras, as they are often overpriced, and many times can be purchased elsewhere for less.
One more tip: One exception to these additional items is an extended auto warranty, which can provide peace of mind for buyers and save you money in the long run. Remember, though, the price of an extended warranty is negotiable, and you don’t always have to make the decision at the point of sale. If you do purchase at a later date, make sure to use a reputable company. Check 21st.com for vehicle warranty coverage.
The wrap up
The important thing at this point is to make sure the numbers in the contract match the agreed upon price, and that no additional charges or fees have been added. While it is an exciting time, don't rush through the process: Ask questions if you have them or need clarification. A good finance manager will explain each form and what it contains. Buying a car is a serious commitment. Once you sign the contract, it’s your responsibility, so do your research beforehand.
Please note: This information is of a general nature for educational purposes only. It must not be taken as advice and does not signify an endorsement. 21st Century Insurance is not responsible for any injuries or loss incurred.
Sources: edmunds.com; consumerreports.com; msn.autos.com; Beatthecarsalesman.com