How to buy a vehicle in any market.
New car sales remain strong, but one thing we are seeing more of this year than in recent years are deep discounts and other incentives to lure customers. Although most deals aren’t rivaling anything we have seen since the last recession, automakers aren’t all that willing to cede marketshare in good times.
It is a buyer’s market for new car shoppers. Here’s how to find a deal you can live with:
1. Know what you want. Determine the type of vehicle you want and then narrow it to a specific make and model. The narrower your search, the easier it is to do your research. This means choosing the trim level you want, right down to the amenities — power accessories, infotainment system, safety features, you name it. Allow your parameters to guide you and you’ll be satisfied with your new ride.
2. Shop online. There is no need to visit a dealership to make your deal. Save your visits to only test drive a vehicle or to finalize your already negotiated purchase. Typically, you can find what you want by shopping online, negotiating with the dealer’s web sales department to get your price. Next, repeat the process at one or two other dealers, then have the dealers battle for your business. The more competition for your business, the better the savings for you.
3. Arrange your own financing. Unless the manufacturer is pushing 0 percent financing, you can usually find better financing elsewhere. Credit unions are especially good at offering low-rate financing, particularly if your credit is excellent. When you bring in your own financing, you can claim the other incentives instead, such as cash back, a military or student discount, or some other incentive.
4. Discuss new car price, then talk trade-in. Don’t allow a salesperson to attempt to bundle your trade-in with your new car negotiation. These are separate deals. First, negotiate the best price for your new car. Second, when it comes to down payment talk, introduce the trade-in as the down payment. Understand your car’s worth by using a service such as NADAGuides.com or Kelley Blue Book to value your vehicle.
5. Review all fees. You’ll be hit with an assortment of car closing fees, adding hundreds, perhaps thousands of dollars to your final price. Sales tax, title and registrations, destination charge and documentation fee are not avoidable — you will have to pay these. Expenditures you can avoid include a dealer preparation fee, credit life insurance, disability insurance, VIN etching, rustproofing, and paint sealant. Additional dealer markup may be hard to avoid, especially if you’re buying a strong selling model. As for that advertising charge, see if the dealer will waive it. Examine your sales contract carefully to determine what fees are charged. Ask for an explanation for anything you may not understand.
6. Finalize your deal. With your best deal negotiated, financing in place, and a trade-in or cash down (preferably both), you’re ready to finalize the deal. It is extremely important for you to know what your monthly payments will be and whether you can afford those payments. Don’t sign the deal without having a discussion with your auto insurer first — you may be unpleasantly surprised to discover you can’t afford the insurance. If so, you’ll need to look for a different insurer or a different car.
A Buyer’s Market
Timing your purchase can help your cause too, especially if you strike a deal as the month comes to a close. Sales people and dealers rely on incentives from the manufacturer to sell “X” number of vehicles each month. This tactic can work well and might be utilized instead as both the model year and the calendar year come to a close.
See Also — Right Now: Lease a New Car
