10 Easy Steps To Buying A Car

Every automobile buyer has but one thought in mind -- to save money by getting a good deal. Your goal should be to pay the True Market Value price listed on edmunds.com website (plus the adjusted cost of options). Use the following guide to help you plan your purchase:

Step 1

Know what type of vehicle you need, and study the different models available.

Step 2

Test-drive, as extensively as possible, each model you're interested in. Pay special attention to safety features, design, comfort, braking, handling, acceleration, ride quality, ease of entry and exit, etc.

Step 3

Check insurance rates on the models you're interested in to make sure the premiums fall within your budget.

Step 4

Contact several financial institutions to obtain loan-rate information. Later on, you can compare their arrangement with the dealer's financing plan.

Step 5

Find the exact vehicle you want, and copy all of the contents listed on the window sticker onto a pad of paper. Then, use Edmunds' pricing information to determine True Market Value (if ordering the vehicle from the factory, just use our data to determine what the order will cost when you place it):

a) Total the cost of the options for the model and equipment you want.

b) If ordering the vehicle, determine the value of the holdback and subtract this amount. If the dealer orders the vehicle, he won't pay floorplanning (the charge to stock the vehicle), or advertising (an expected cost of business), which the holdback is designed to subsidize.

c) Add the True Market Value price to the list of discounted options.

d) Add the destination charge, which is non-negotiable. Also expect to be charged advertising fees by the auto manufacturer to help pay for those MTV-style TV commercials that got you thinking about a new car in the first place. You should pay no more than 1.5 percent of the vehicle's MSRP.

e) Some dealers charge a delivery and handling (D&H) fee. Negotiate this fee. It's just added profit.

f) Add sales taxes.

g) Deduct any incentives or rebates.

Step 6

Shop this price around to several different dealerships. The dealer who meets or comes closest to your target price should get your business. Be sure that the dealer's price quote will be your final cost. Get it in writing!

Step 7

If your present vehicle will be used as a trade-in, negotiate the highest possible value for it. Try not to accept a value that is less than Edmunds.com's trade-in value for your car. When trading in your vehicle, you should deduct the trade value from the cost of the new vehicle. If you owe the bank more money than the trade-in is worth to the dealer, you are upside-down on your trade and must add the difference between what you owe and the trade value to the cost of the new vehicle. If you're making a cash down payment, either with or without a trade-in, be sure to deduct this amount from the cost of the new vehicle as well.

Step 8

To the final vehicle cost, add documentation fees and, in some areas, license plate charges.

Step 9

When talking to the finance manager as you close the deal, he or she will try to sell you rustproofing, undercoating, protection packages, dealer-added options, and an extended warranty or service contract. Forget about this stuff. Dealers charge a substantial markup on these usually useless items to fatten the profit margin on your deal.

Step 10

Enjoy your new vehicle, knowing that you did everything possible to get the best deal.