7 Car Buying Tips for Today’s Consumers
Buying a new car today may be different from the last time that you set foot in a dealer’s showroom. Today’s new cars are more fuel efficient, and may come with many safety features and equipped with the latest technologies including navigation systems, Bluetooth connectivity and rear view cameras. What hasn’t changed is making sure that you get a good deal on a new car, something that you can do by following the seven buying tips as outlined here.
1. Establish your budget. Your heart may say Cadillac, but your finances say Chevrolet. But, the only way to determine what you can afford is to make a budget that considers how much money you can put down, what you can afford to pay each month and your total cost of ownership including taxes, fees, insurance and upkeep.
One way to afford a more expensive car is to considering leasing. A lease deal may prove more advantageous to financing, allowing you to lower your payments or choose a more expensive car. You still may not be able to get behind the steering wheel of a Cadillac, but you might find yourself affording a Buick. Ask your new car dealer about available lease plans.
2. Determine a vehicle style. It seems natural that new car shoppers should know the vehicle body style that is right for them. Then again, how many times have you gone to look at a sedan, but came home with an SUV or a roadster instead?
Narrowing your choice to a body style is wise. Take it even further to the size vehicle you want. For instance, you want a sedan, but these vehicles come in a range of sizes. A compact car can offer great fuel mileage and a large sedan provide generous amounts of room. You may find that a midsize sedan offers the best of both worlds, vehicles such as the Ford Fusion, Toyota’s Camry, the Hyundai Sonata, Nissan’s Altima and the Honda Accord that seat five and get about 35 mpg on the highway.
3. Consider your insurance costs. Insurance costs can vary from model to model. In some cases those cost differences can amount to hundreds of dollars.
The Insurance Institute for Highway Safety is funded by the major auto insurance companies and grades how a car performs in crash tests. Achieving a “top safety pick” means your car should cost less to insure. Contact your auto insurer before you buy to obtain a sample rate quote for your new car.
4. Weigh your financing options. How will you pay for your car? If you’re part of a fortunate small minority, you’ll pay cash. For the rest of us, it is all about financing. And here you can choose to buy or lease a vehicle.
Assuming that you want to buy a vehicle, you can arrange financing on your own or you can ask the dealer to arrange financing for you. With the first choice, you know what is available to you before you negotiate the price of your car. With the second choice, you will have to wait until after you buy your car. The first choice you can handle with your bank or credit union. The second choice usually means that the manufacturer’s financing arm will offer you a competitive loan rate.
5. Explore all available incentives. What kind of discounts are offered with your new car? That is something you can learn about by visiting the dealer’s website, but you can also visit the manufacturer’s site to see what incentives are currently offered.
Incentives typically include cash back or a reduced financing rate, but usually not both. There are other incentives available too including recent college graduate rebates, military service personnel rebates, previous owner rebates and other deals. Ask your dealer about available rebates.
6. Know the invoice price. You may have heard the term “MSRP,” but are not familiar with its meaning. That’s the manufacturer’s suggested retail price, but it is typically, not the price you’ll pay for the vehicle.
Your price will likely be somewhere between the dealer’s invoice price and the MSRP. The lower your price, the more you’ll save, so find out the dealer invoice price. For a fee, there are services that offer this information to you including Edmunds, Kelley Blue Book and Consumer Reports. Dealers know that this information is out there, so feel free to find out what they pay including incentives dealers receive from manufacturers.
7. Negotiate with confidence. Once you know what car you want, give it a test drive. If you’re satisfied with it, then negotiate your price based on the information you’ve obtained.
The research you accomplished took some time and cost you a bit of money, but if you did it right you stand to save hundreds perhaps thousands of dollars on a new car. You can negotiate with dealers by email, asking three or more dealers to present their best price. Choose the deal that is best for you and then enjoy your new ride!
New Car Considerations
Keep in mind that new cars come in a variety of trim levels. Prices can vary widely between the standard and best equipped models, with special packages for technology and safety offering extra savings.
IIHS: Top Safety Picks — http://www.iihs.org/ratings/
Consumer Reports: The Consumer Reports Bottom Line Price — http://www.consumerreports.org/cro/2012/05/the-consumer-reports-bottom-line-price/index.htm
USA.gov: General Car Buying Tips — http://www.usa.gov/topics/travel/cars/tips.shtml
James Sweiger has been a Ford man his entire life, owning everything from Mustangs to Fairlanes. James is currently working with Autofair Ford.