Tips for buying a New Car

• Narrow down the MODEL you want. DO your research on the Internet, go to dealerships and test drive, and talk to others who have the same kind of car. Decide on ONE MODEL before you try to buy and stick with it if at all possible.
• Once you've decided what you want to buy, go to edmunds.com and look up the invoice price on the car AND the current incentives. Once armed with the invoice price and MSRP of the model you want, you’re ready to deal.
• Choose a dealer. Perhaps you've heard something good about a dealer or you've purchased from a particular dealer before...these are good choices. Feel free to call the Better Business Bureau and check out a dealer. You can use their automated line in most cases and get up to date reports on the dealer's record of doing business.
• Visit the dealership of your choice and choose a vehicle. Get what you want...there is no need to settle for something less than you want.
• After you have test driven the car you want, tell your salesperson that you know what the car costs the dealership and that you are willing to pay a fair profit, but that you don't want to go back and forth. So what's a fair profit?

On a vehicle that is plentiful, 3% over invoice is fair for the dealer. If it is a hard to get vehicle, the market may indeed bear full sticker price. From here, you should deduct any applicable factory rebates or you can normally choose a low interest rate. Usually these become comparable to the customer.

• If you have a trade-in, go to kbb.com and get its value. Be VERY careful not to put your vehicle in good condition if it is in fact, not. Rarely will a trade-in bring EXCELLENT book. Let the dealer appraise your vehicle and make you an offer. Be sure to tell him all the good things about your trade...like regular oil changes, extended service policies, etc. Have your vehicle clean when you go in...it will bring more money.
• Once you've agreed to the price of the new vehicle and the trade-in value if applicable, you'll go to the finance department. You will be offered various products, most of which are good to have if you can afford them. Credit Life insurance and credit disability insurance rates are set by the State. Therefore, they are not negotiable. However, Extended service policies ARE. Only buy the policy that is offered by the MANUFACTURER of the vehicle you are buying. Gap insurance is an EXCELLENT policy to have and is low cost. This coverage makes up the difference between actual value and your payoff in the event of a total loss by collision or theft.
• Read everything you sign. Not line by line, but make SURE the figures that are on the contract are what you agreed to. Look at ALL the numbers. Any added items to the contract will show in a prominent place. Make sure the interest rate is acceptable to you. Once you've signed everything, you are an owner, so be sure of what you are signing.

Other Thoughts....

• Understand that the dealer deserves to make a profit. He has a huge investment in his facility and he must make a profit to be able to take care of you AFTER the sale.
• Look at the WHOLE deal...don't just look for the lowest price or the highest trade value. Consider the entire transaction. If you have a trade-in, the difference between the new car and your trade is really all that matters.
• Don't go into a dealership with a chip on your shoulder. Salespeople by and large are folks just like you. They don't own the cars on the lot; they make their living helping people buy cars.
• Don't ask for the dealer's best price, get it, then start to negotiate from there. There has to be trust between the dealer and the customer. Most dealers prefer to deal with an educated customer.
• Don't get pressured. If you feel uncomfortable, politely get up and leave and go to another dealer.
• If you don't want the dealer to look at your credit file, don't give up your social security number. On the other hand, a dealer cannot quote you an accurate payment WITHOUT looking at your credit.
• Leasing is a good way to buy a vehicle in many cases. Just be sure to look at the whole deal, not just the payment. If you are a high mileage driver, leasing is not for you. Consider the TOTAL amount for the car you are leasing. Take the number of payments times the monthly payment and then add the residual value to see what you are paying for the car should you keep it after the lease. Understand what normal wear and tear means before you lease.

Buying a car can actually be a pleasant experience. Arm yourself with all the facts before you go in and you can protect yourself. Again, dealers deserve to make a profit, you just want to make sure they don't retire after you buy!