New Car Buying Summary
1. Start off knowing what you can afford. This must be done well in advance of visiting a dealership, because what you can afford is not something to discuss with sales staff. Evaluate your finances to discover what your down payment will be as well as what you can afford per month. Then keep this information to yourself.
2. Research the vehicles that fit into your price range, and narrow your selection down to three models. Then read up on leasing vs. buying, and decide which is right for you. If you decide to lease, become familiar with leasing jargon. If you decide to buy, get pre-approved financing from your bank, credit union, or other financial institution. This will help you negotiate later on.
3. Find out everything there is to know about the vehicle or vehicles you have in mind. This includes knowing the True Market Value price for each vehicle. The vehicle options should be calculated with a similar discount. Add the True Market Value of the car to the list of discounted options. You should also know about any current incentives or rebates, and knowing what holdback is and how it can affect the dealer's profit. Your final figure will be your goal when you begin negotiating for your new car.
4. Go to a dealership. It's where the new cars are, and it's the only place you can get them. You'll want to test drive each of the cars you're researching to get a real-world feel for them. Take the salesperson's business card, but only enter negotiations if you are totally prepared. And it is wise to contact more than one dealership in person before entering into negotiations. That way, you'll already have a feel for how you'll be treated. Hate face-to-face negotiations? Try alternate methods like the telephone, fax, email, buying services or no-haggle dealerships.
5. Negotiate for the best price. When your mind's made up and you've driven the car you want to own, it's time to get down to brass tacks. If you're going to trade in your old car, know what it's worth before asking for an estimate. And be aware of the salesperson's strategies before you're faced with them for the first time.
6. Close the deal. This is not as simple as signing papers. You must read everything before signing - don't just take the finance manager's word for what your contract states. Decide in advance if you need an extended warranty, alarm system, etc., and don't let any "dealer extras" or ancillary charges slip by.
That's all there is to it. Preparation is the key, and now that you've read our advice, put your preparation to work.
