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New Car Price Tips |
| Don't get ripped off at the dealership.
Here you will find a number of tips to keep those new
car prices down. |
The key to keeping new car
prices down is all in your preparation. It's all about
researching the vehicle or vehicles you're interested
in, checking out all the options, fees, rebates, incentives,
and knowing how to go about the selling of a trade-in.
The more information you have, the better off you'll
be. Also it will be very helpful to remember patience
and control.
You should:
The more you know about the whole car buying process,
the easier the negotiations will be, and the more likely
you'll be satisfied with your deal. You would be wise
to get a pad of paper and commit a sheet of paper to
each vehicle you're considering, or to each dealership
you plan to visit. Write down the pros and cons of each
vehicle.
Also list what you like or don't like about the different
dealers or dealerships. This will help you narrow down
which car you want and which dealerships you'll visit.
This is the first and most important step in the car
buying process. You must know how much you can spend
before you can determine what you can afford. You don't
want to get stuck making a bloated car payment that
will leave you eating bologna sandwiches for three years.
First of all, you need to have a monthly budget. This
is very easy to calculate. Add up all of your fixed
monthly expenses, such as your rent/mortgage, phone
bill, etc. Subtract that from your net income. Then
subtract your estimated extraneous expenses, such as
food, gas, entertainment, whatever. The result should
be an amount of money you have to play with.
From that, you need to remember that buying a car involves
more than a down payment and monthly payments. In your
budget you will need to include licensing, registration
and other hidden costs, as well as monthly insurance
costs, gas and maintenance.
Once you have all of this worked out, you should have
a ballpark figure of the budgeted amount you can use
for car payments. A good rule of thumb is roughly 20
percent of your net income can be used for a car payment.
Once you determine that figure, stay with it.
Now that you have settled on a monthly allotment, now
you can look at which vehicles fit into your price range.
This is really about personal choice, but a good criteria
to go buy is to look at what your needs are. Do you
have a family? There are plenty of affordable, safe
and reliable minivans and station wagons on the market.
Single and commute, or do a lot of city driving? The
compact segment has a wide range of models to choose
from that boast handling and superior gas mileage. Do
you use your vehicle for work-related tasks, such as
hauling, delivery, etc? Check out the many light and
heavy-duty pickup trucks and vans. Midlife crisis? There
are several convertibles and sports cars that will make
you feel young again.
Also consider your wants. Compact cars get really good
gas mileage and are a great if you want to save money
on the increasing gas prices. Plan on taking road trips?
Consider something that gets good mileage and has cargo
space and lots of cup holders. Plan on going off-roading?
The SUV is your best bet. Some even come with a first-aid
kit!
Now that you're narrowed down to a car, you'll need
to look into all the fees, rebates, incentives and holdbacks.
There are plenty of places for you to do your research.
Check out the Internet and newspapers, contact dealerships,
credit unions and local banks to see what kind of deal
you can get. Knowing what a dealer's competition is
offering can only help you out in the negotiating process.
Look at interest rates. You'll want to get the lowest
possible interest rate, as it will help you pay less
in the long run. Many car buyers focus on getting the
lowest possible down payment. If a dealer gives you
a low down payment, the money you are saving has to
be made back. Dealers will find ways to lower your down
payment, and as a result will find ways to compensate
for their generosity. By deferring the down payment
"savings," with interest, you'll end up paying more
in the long run.
Also be aware of factory-to-dealer incentives. The secret
is that the manufacturer refunds a certain percentage
of the car's price to the dealer. So even if the dealer
sells you a car at the invoice price, he or she will
still make money from the deal.
Find out about a manufacturer's incentive percentage,
as they are public information.
You should also look out for rebates. When incentives
are offered, this often means the manufacturer wants
to either get rid of slow-selling cars or reduce the
inventory. Therefore, they may also offer the buyer
a cash rebate and a low financing rate, or an option
of one of the two.
Do you need undercoating? Sealant? Rustproofing? How
about an anti-theft device? These and other services
like them are known as extras, and they're offered by
the dealer simply as a way of making an extra buck.
They are services that many people can either do themselves
or pay off-site businesses to perform for them, usually
at greatly reduced prices. For example, the dealer may
charge you $200 for upholstery protection. The spray-on
upholstery sealer costs about $8 a can at any auto parts
store, and the dealer pays some minimum-wage schlepp
to do this half-hour job. The end result? A profit of
almost $190. Not bad. Undercoating can cost you $30
at an off-site location, or $300 at a dealership. Get
the idea?
Also be aware of extended warranties. You may be encouraged
to buy a warranty--sometimes called an auto service
contract--to help protect against unexpected, costly
repairs. While it may sound like a good idea, don't
buy in until you understand both the terms of the contract
and who is responsible for providing the coverage.
No matter which car you decide to buy, options may play
a role in the final price. Whether you want power windows
and a moonroof, or the six-disc CD changer and leather
interior, these options will cost you.
Find out what all these options are and what they cost.
Then determine which you want and which you can live
without. In the end you want to know what you're paying
for, as well as what you don't want to pay for.
Other options you will have are automatic vs. manual
transmission and two-door vs. four-door. These are options
that may have a difference monetarily. Be sure to find
out if this is the case on the particular model you're
looking at.
You're now going to visit the dealerships to get a feel
of what you're getting into, and who is going to help
you buy the car you want. Dealers will most likely approach
on the lot and try to have you commit one way or another
on either a car or on their dealership. Tell them you're
just browsing. If they persist, just walk away. You're
not there to buy a car just yet.
You should visit a few dealerships before you let on
that you interested in buying a car. Ask the dealer
about the different options, rebates and incentives.
Though you should already have this information, it
will be useful to gauge their knowledge on the car.
This will help you determine whether or not you're dealing
with a straight arrow.
Don't talk about price until the dealer has made an
offer. In other words, let the dealer make the first
offer. Find out exactly what you're being offered and
counter-offer. Continue to do so until you are a couple
hundred dollars within the figure you budgeted earlier.
When you get there, you're golden.
People sometimes get so wrapped up in the car buying
process, they forget to think about getting a good deal
on their trade-in. Or, they are so concerned with getting
a good deal on their trade-in vehicle, they end up getting
a bad deal overall. Make sure that if you are trading
in a vehicle, you keep a balance between these two pitfalls.
The most important thing is to know what your vehicle
is worth. You need to remember that you are, in effect,
selling your car. And just like you would do if you
were selling your car to someone outside of a dealership,
learning the value of your car is imperative. This way
you have a general price, and you won't accept a sometimes
deliberately low offer from a dealer. Make sure you
factor in features that may positively affect the price,
such as air conditioning, sunroof, cd player/changer,
power windows, etc. Also be sure to factor in conditions
that may adversely affect the price such as high mileage,
dull or chipped paint, rust, chipped or pitted glass,
worn or stained upholstery and carpeting, worn suspension,
poor alignment, etc. These are things that you may consider
addressing before trading in the car.
Also keep in mind you are determining trade-in value
(also called wholesale value,) not retail value. Trade-in
value is basically the amount someone who plans to resell
the car will pay it. There are a variety of books available
at many banks, libraries and credit unions, as well
as online, that can be used as a rough guide to basing
a trade-in value. Rough, because there are too many
factors to go into pricing a car to print absolute prices
for each year, make and model. Time and location are
also factors. However, they are difficult to evaluate.
Knowing all of the factors, fees and options in a new
car purchase will ideally result in your making a sound
investment. It's critical to learn all of the details
involved, or you could be taken for a ride. Walk in
naïve and you'll walk out ripped off.
Remember that dealers are there to make a living, not
to give you a great deal just because you seem nice.
That would be the same as them giving you cash from
their own pocket. But if you know your stuff and act
a little savvy, you'll do all right. |
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BY WWW.CARBUYTIP.COM
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