Buying a car and after that
You just bought yourself a car. It does not matter if it is brand new or previously owned because it new to you.Now that you have the car is there anything you are forgetting to do? What do you need to do after buying your car? This article will answer that question for you.
Things to do after buying your car
The first thing you should do after buying your car is to let your insurance agent know. You need to get insurance on the car as soon as possible. If you traded in a car let your agent know so that vehicle can be taken off of your policy.
Since you are starting a new policy you might use this time to shop around to make sure your insurance agent is giving you the best price. One place you can go to online to compare insurance prices is CarInsurance.com. This site makes it easy for you to quickly but efficiently see multiple companies and their rates for your vehicle.
Next read through the owner’s manual. Familiarize yourself with when you will need to bring in your car for oil changes and tune ups. See what the tire pressure should be. Read how all of your controls work, there might be new buttons that your old car did not have.
Now that you have read about the inside controls now sit in the car and see where they are. The windshield wipers are not always in the same place on each car or work the same. Little things like this you can familiarize yourself with now instead of the middle of a rainstorm. See how the air conditioning and heating controls work and adjust them to how you will be most comfortable so you will not need to bother with that while driving the car.
Set up your radio. You will need to read about your radio and figure out how to set up you radio stations with the preset buttons. Not all radios are the same and you do not want the radio stuck on a static filled AM station on your drive to work because you do not know how the radio is set up.
Get under the hood. Maybe the dealer or private party you bought the car from showed you this previously but now be sure you know how to pop the engine hood yourself. Find the dipstick and check your oil. Also look and make sure that not only your other fluids are filled properly but that you know how to determine when they are low.
Now that you know your car inside and out, really make it your own. If you have the money you might want to put on specialize rims or upgrade the sound system. If you don’t have the money for big upgrades why not find some car seat covers or even an antennae ball. This will make the car now feel like your own.
You have just bought yourself a car. You still have work to do. Get to know your car and make it your own special asset.
10 Steps to Finding the Right Car for You
By Philip Reed, Senior Consumer Advice Editor
The following steps are devoted to helping you select, price, locate and test-drive the vehicle that is best for you. After reading and completing these steps, you will be ready to move on to the 10 Steps articles to buying a new car or buying a used car
Step 1: What kind of car do you need?
If you examine your needs rather than wants, you will quickly discover what the right car is for you. Take a moment to think about what you use your car for. How many people do you need to transport? What type of driving do you do most often? How long is your commute? Is it important that your next vehicle get good gas mileage?
In too many cases people choose a car for its styling or because it is a trendy favorite. If you do, you might either exceed your budget or have to go car shopping again soon. Let your needs, not your wants, drive your decision. Here are a few other questions to keep in mind when you begin your car-buying process:
Do you want a manual or automatic transmission?
Do you really need four-wheel drive? Or all-wheel drive?
What safety features do you want?
Do you require a lot of cargo capacity?
Will you be doing any towing?
Do you have a bad back and need flexible seating positions?
Will the car easily fit in your garage or parking space?
Step 2: How much can you afford?
Regardless of whether you decide to buy or lease your next car, establishing a realistic monthly payment that fits into your budget is crucial. How much should this be? A rule of thumb is your total monthly car payments shouldn’t exceed 20 percent of your monthly take-home pay.
Estimate what your monthly payment will be based on purchase price, down payment, interest rate and length of loan. Run the numbers now and print out the results. It will not only show you what you can afford, it will also help you control the numbers when you negotiate with a car salesman
Step 3: Should you lease or buy your next car?
A lease requires little or no money up front and offers lower monthly payments. But when the lease ends, you are left without a car and will need to replace it. Buying a car is more expensive initially and the monthly payments are higher. But at the end of the loan, you will own a car you can still drive or sell.
Advantages of Leasing
You can drive a more expensive car for less money.
You can drive a new car every few years.
There are no trade-in hassles at the end of the lease.
Advantages of Buying
When interest rates are low, it makes more financial sense to own a car rather than lease it.
There are no unexpected mileage penalties for increased driving.
There’s more flexibility — you can sell the car whenever you want.
If you are still unsure whether to lease or buy, try letting the numbers help you make the right decision.
Step 4: Have you considered all vehicles in that class?
In today’s crowded automotive marketplace, many consumers have difficulty keeping up with all of the vehicles available.
You can pick a specific car and bring up a list of similar cars in the same class. If you already have a car you are considering, this will be your starting point. Find the specific car you want on the Web site by searching by make, type, price range or market segment. Once you have chosen your specific car, you will find information on pricing, specifications, features and road tests. You can also Compare Vehicles to select similar cars to review.
If, on the other hand, you have no idea where to begin, you should consult the Best Cars section of the site.
Step 5: Have you considered all of the costs of ownership?
Here is an often-overlooked fact of car ownership: One car might be cheaper to buy, but more expensive to own. Why? Even if two cars cost about the same to buy, one can depreciate at a different rate or cost significantly more to insure or maintain.
Before you commit to one car, you should estimate the long-term ownership costs of the vehicle you are considering. These include depreciation, insurance, maintenance and fuel costs.
Find out what a fair price is for the car you are considering. TMV is the average price other buyers are paying for the same car in your area.
By using TMV and TCO, you can make a smart decision up front and then save hundreds of dollars over the life of the car.
Step 6: Research options.
In the past, car buyers have been trained to visit local dealerships to find the car they want. In the Internet age, this is a waste of time and money. You can quickly cover more ground by shopping online. Car dealers are waking up to this new breed of shopper and have created Internet departments within their dealerships to serve the educated buyer. The only things you have to do in person are test-drive the car and sign the contract. And in some cases, you can even have the car delivered to you by the salesperson.
Find local dealers, check interest rates for buying or leasing and calculate your exact monthly payment. Before ever heading out the door or negotiating with an Internet manager, take the time to research the cars you are considering. Remember: You don’t want to make a large purchase like this until you’re really ready.
Step 7: Schedule an appointment for a test drive.
It’s a good idea to make your initial contact with a dealership by phone or e-mail before going there in person. This can give you a sense of the sales style you will be dealing with throughout the buying process. Additionally, if you can establish a rapport with the Internet salesperson, it will boost your confidence before you visit the lot. Call the Internet department (sometimes called the fleet department) and ask if the car you’re looking for — in the right color and trim level — is actually on the lot.
Make your initial contact with the Internet manager either via an e-mail message or a phone call. You can also send multiple dealer requests and narrow your search based on the e-mail responses. Call the Internet department and tell the salesperson that you want to set up a test-drive — but that you won’t be buying right away. However, assure them that you will buy there if you decide to purchase this particular model, and if they can offer the vehicle at a fair price.
If you deal with a normal car salesperson, he or she will try to start the negotiations at a high price with the expectation of being negotiated down. However, the Internet manager will often quote you a rock-bottom price right away. A few minutes taken to set up an appointment with the Internet manager can save you both time and money.
Step 8: How to test drive a car.
The test-drive should replicate the conditions the car will be used in after you buy it. If you commute, drive the car in both stop-and-go traffic and at freeway speeds. If you frequently drive into the mountains, try to find some steep grades to climb. Drive over bumps, take tight corners and test the brakes in a safe location. Get in and out of the car several times and be sure to sit in the backseat, especially if you plan on carrying passengers. In short, ask yourself if you can live with this car for a number of years.
While you are evaluating the car, don’t be distracted by the salesperson’s pitch. Don’t drive with the radio on — evaluate that separately. A new car is a big investment; make sure you spend enough time really looking it over. Then consider one last thing: your intuition. If you are uneasy about the car, follow your instincts. A vehicle purchase decision is too important (and expensive) to undertake without total confidence.
Step 9: After the test drive.
After the test-drive, you should leave the car lot. Why? You will probably need to drive other types of cars at other dealerships. It’s a good idea to do your entire test-driving in one morning or afternoon. Driving the cars back-to-back will help you uncover differences that will lead to an educated purchase decision.
So, how do you get out of the clutches of the salesperson? Generally, Internet salespeople are pretty mellow and won’t pressure you to buy on the spot. Besides, you can say you still have other cars to drive and you can’t make a decision yet. Most good salespeople will respect that. If they don’t, you won’t want to deal with them anyway.
Step 10: Getting ready for the buying cycle
At this point you should have considered all the cars in the class that interest you. You should have a good idea what you can afford. You should know if you want to buy or lease your next car. You should have test-driven your top choices.
Now it’s time to narrow your choices down to one car and make a deal. If you are going to buy your next car, read “10 Steps to Buying a New car” or “10 Steps to Buying a Used car.” In either case, take a moment to congratulate yourself. You have done your homework to find the right car for you. Now you can move forward with confidence.
10 Steps to Buying a Used car
By Philip Reed, Senior Consumer Advice Editor
The following steps will tell you how to locate, price and negotiate to buy the used car you want. If you still don’t know what car to buy, read “10 Steps to Finding the Right Car for You” and then come back after you have decided.
Step 1: Starting out — Why buy used?
If you’ve decided to buy a used car, you’ve already made a smart decision. You can get a car that’s almost as good as a brand-new one without paying for the depreciation that wallops new car buyers as soon as they drive the car off the lot. Even cars that are only a year old are 20-30 percent cheaper than brand-new cars.
But there are other good reasons to buy a used car:
You’ll save money on insurance.
Bigger bargains are possible for the smart used car shopper.
Used cars are more reliable today than ever before.
Some used cars are still under the factory warranty.
Most new carmakers now sell certified used cars, which include warranties.
The history of a used car can easily be traced using the vehicle identification number (VIN).
If you buy from a private party, the negotiation process is less stressful.
Step 2: Choosing the right used car.
At the beginning of the car-buying process, many people already know the car they want. But it’s a good idea to stop right now and test your decision with this question: Will this car fit into my monthly budget? We’ll explain how to determine what car you can afford in the next step. For now, make sure your choice isn’t obviously exceeding your budget. Ask yourself, does it meet my current needs? For more on this subject, refer to “10 Steps to Finding the Right Car for You.”
You may need to expand your horizons when considering what to buy because you won’t know what is available in your area until you really start looking. Consider building a target list of three different cars. You might want to think of vehicles in the same class. For example, if you really want a Toyota Camry, you should also be on the lookout for a Honda Accord, Nissan Altima or Chevrolet Malibu. These cars were built for the same market, but they have different features and sometimes lower prices.
Step 3: Save money by buying second-tier cars.
The value of a used car is based on its condition, mileage, reliability, performance and popularity. Of course you want a car that is reliable and performs well. But do you want the same used car everyone else wants? If so, you will pay a premium for it. In some cases, the only difference is the nameplate.
You will find all the information you need to make an educated decision about what to buy on the car pages. The major topics are accessed by clicking the links that list such information as prices, standard features, specs and safety, warranties, consumer discussions, photos and video and resale values.
A helpful feature is “Car Ratings” which evaluates the different components of the vehicle. You can also read reviews of the car by current owners.
Another essential part of the used car pages is pricing, a helpful guideline when car shopping. TMV pricing is based on sales figures of similar cars across the country.
One last vital step to getting a great used car deal: Make sure you run a vehicle history report on any used car you are considering buying. Several companies sell these reports, which are based on the VIN, but AutoCheck and Carfax seem to be the most comprehensive.
These reports can reveal vital information about the used car, including whether it has a salvage title (it has been declared a total loss by the insurance company) or if the odometer has been rolled back. This is also the time to decide if you want a Certified Used car.
Used car shopping will involve inspecting the vehicle to determine its condition. This process is simplified if you buy a certified used car that has passed a thorough inspection and is backed by a manufacturer’s warranty. But while buying a certified used car removes a lot of the guesswork about the vehicle’s mechanical condition, you pay for this service.
Most new cars are sold with a three-year/36,000-mile warranty. Therefore, if you buy a car that is from 1-3 years old, with fewer than 36,000 miles on the odometer, it will still be under the factory warranty.
Step 5: How much can you afford?
The smart shopper will consider how to finance the car at the beginning of the shopping process. This will avoid unpleasant surprises later on and help you make an informed decision that fits your budget.
You should use an Affordability Calculator to help you come up with the figures you need to guide you as you go shopping:
Monthly payment — If you are going to take out a loan, how much can you afford to pay each month?
Down payment — How much cash can you put down to reduce your monthly payments?
Purchase price of the car — Answering the first two questions will help you determine a realistic price range for your used car.
Once you’ve determined how much you can spend for a down payment, a monthly payment and the purchase price of the car, print out these figures. Later, when you are negotiating for a used car, you might need to check this information to bring yourself back to earth.
Step 6: Set up financing for your used car.
Cash. Need we say more? Money talks — you-know-what walks.
Financing through a bank, online lender or credit union — We highly recommend this route because it will usually save money and give you the most control over the transaction.
Financing through the dealer — This can work for some people depending on their credit scores and the interest rates offered. Also, by prearranging financing through an independent source, the dealer may then try to beat the rate with a low-interest loan.
Financing through an independent source (online lender, bank or credit union) offers several advantages:
Keeps negotiations simple in the dealership
Allows you to shop competitive interest rates ahead of time
Removes dependency on dealership financing
Encourages you to stick to your budgeted amount
Low-interest loans can be arranged online.
Step 7: Where to shop for your used car.
The used car section of new car dealerships
Independent used car lots
Of these sources, private parties usually have the most reasonable prices. It is also a more relaxed transaction to buy a used car from a private party than to face a salesman at a dealership.
Still, there are advantages to buying a used car from a new car dealership. Many used cars, on new car lots, are trade-ins. Dealerships usually get these cars at rock-bottom prices. If you make a low offer — but one that gives them some profit — you just might get a great deal. Furthermore, many dealerships offer certified used cars that have been thoroughly inspected and are backed by strong warranties.
Search for your car by using sites or online classifieds such as Craigslist. Some sites are very flexible and allow you to search specific criteria such as make, model, options and price range. In some cases you can search the used car inventory of new car dealerships through their Web sites.
While the Internet is an amazing resource, you should still try the conventional sources. Ask friends and relatives if they are selling a used car. Keep your eyes peeled for “For Sale” signs in car windows. Scan the bulletin boards at supermarkets or in local schools and colleges. Finally, don’t forget old faithful — newspaper classifieds.
Once you find a prospective car, call the seller before you go to see the vehicle. In this way, you can eliminate cars that have problems such as excessive mileage or a salvage title.
While talking to the seller, set up an appointment for a test-drive. If possible, make this appointment during the day so you can see the car in the daylight and more accurately determine its condition. Also, ask for the VIN so you can run a vehicle history report.
Step 8: Test-driving a used car.
Test-driving a used car helps you decide if it is the right car for you and also if this particular car is in good condition. Once you get behind the wheel, ask yourself if it is a good fit. Does it offer enough headroom? Legroom? Are the gauges and controls conveniently positioned?
Try to arrange your test-drive so that you start the engine when it is completely cold. Some cars are harder to start when they are dead cold and, when doing so, will reveal chronic problems. Turn off the radio before you begin driving — you want to hear the engine and concentrate on the driving experience.
On the test-drive, evaluate these additional points:
Acceleration from a stop
Visibility (Check for blind spots)
Passing acceleration (Does it downshift quickly and smoothly?)
Suspension (How does it ride?)
Rattles and squeaks
Take your time and be sure to simulate the conditions of your normal driving patterns. If you do a lot of highway driving, be sure to go on the highway and take the car up to 65 mph. If you go into the mountains, test the car on a steep slope. You don’t want to find out — after you’ve bought the car — that it doesn’t perform as needed.
After the test-drive, ask the owner for the service records. See if the car has had the scheduled maintenance performed on time. Avoid buying a car that has been in a serious accident or has had major repairs such as transmission rebuilds, valve jobs or engine overhauls.
If you like the way the car drives, you should still take it to a mechanic for a thorough inspection. A private party will probably allow you to do this without much resistance. But at a dealership, it might be more difficult. If it is a certified used car, there is no reason to take it to a mechanic.
Step 9: Negotiating for a used car.
Successful negotiation comes from having solid information. This is particularly true when buying a used car. Before beginning negotiations you should look up the TMV price and print out the figures.
Dealers have lots of experience negotiating. Most private parties do not. Therefore, buying a used car from a dealer or a private party will be two very different experiences.
Follow these guidelines when negotiating:
Only enter into negotiations with a salesperson with whom you feel comfortable.
Make an opening offer that is low, but in the ballpark.
Decide ahead of time how high you will go and leave when your limit’s reached.
Walk out — this is your strongest negotiating tool.
Be patient — plan to spend an hour negotiating in a dealership, less for private parties.
Leave the dealership if you get tired or hungry.
Don’t be distracted by pitches for related items such as extended warranties or anti-theft devices.
A “closer” (a high-pressure salesman) may try to improve the deal before you reach a final price.
Once you have a deal, make sure the transaction is completed properly. The next section will tell you what to expect and what you need to do.
If you are at a dealership, you still have to go through the finance and insurance (F&I) process. If you are buying a car from a private party, you just have to make sure that payment is made and the title and registration are properly transferred.
In both cases, you also need to make sure you have insurance for the car you just bought before you drive it away. Also, the F&I person will probably try to sell you a number of additional items: an extended warranty, alarms or anti-theft services such as LoJack, prepaid service plans, fabric protection, rust-proofing and emergency roadside kits. Some people want the peace of mind that comes with extended warranties, so this is something you might want to consider (unless your used car is certified or still under the manufacturer’s warranty). However, the other items typically sold in the F&I room are expensive and hold little value for you.
The F&I person may seem like a financial advisor, but he or she is really an experienced salesperson. Some F&I people can become very persistent trying to sell these items. Be firm.
Once the contract is ready, review it thoroughly. In most states, it will contain the cost of the vehicle, a documentation fee, a smog fee, a small charge for a smog certificate, sales tax and license fees (also known as DMV fees). Make sure you understand the charges and question the appearance of any significant, sudden additions to the contract.
Finally, if any repair work is required and has been promised by the dealer, get it in writing in a “Due Bill.” Make sure the temporary registration has been put in the proper place and you’re finally on your way.
When you buy a car from a private party, you will probably be asked to pay with a cashier’s check or in cash. But before money changes hands, request the title (sometimes called the pink slip) and have it signed over to you. Rules governing vehicle registration and licensing vary from state to state. Check the registry’s Web site in your state.
Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.
10 Steps To Buying a New car
By Philip Reed, Senior Consumer Advice Editor
The following steps will tell you how to locate, price and negotiate to buy the car you want. If you follow our suggestions the car buying process can be fast and enjoyable. But more importantly, you will have the satisfaction of knowing you got the right car for you at an excellent price.
Furthermore, there are other key advantages to following our 10 Steps:
You’ll be able to decipher the complicated pricing system used by dealerships.
The True Market Value of a car will be revealed.
You will find available incentives and rebates to reduce the price of the car.
A non-negotiating system will be presented to eliminate conflict.
Extra charges in the Finance and Insurance (F&I) office will be eliminated.
In other words, the 10 Steps covers what you need to know and in the order you will encounter it. This quick guide can help you save thousands of dollars. It will also give you a great feeling of empowerment, putting you in charge of the deal-making process.
But first things first: You need to decide what car you want to buy. If you haven’t done that yet, please check out our 10 Steps To Finding the Right Car for You, then head back here once you have chosen the car you want to buy.
Step 1: Starting out
These steps will help you to locate the specific car you want, and at a price that is fair to both you and the dealer. By now, you should have done plenty of research to determine which is the best car to suit your needs. And, you should have a good idea of what to pay for the car you want. Now you need to narrow the research even more. You will soon be finding the exact car you want to buy — with the options you have chosen — and then you will be determining a target price to pay. If you have done your homework, this will be a fairly easy process with no unexpected surprises.
Buying a car is a big investment, but it can be exciting and rewarding, especially if you feel like you got the right car at a fair price.
Step 2: Using incentives and rebates
Today’s new car market is crowded and competitive. Many new cars are offered for sale with attractive incentives to make you choose a particular model. In some cases, the cars with the best incentives are those that aren’t selling very well on their own.
An incentive is anything that gives you an added reason to buy a particular car. Often, however, it comes in the form of a cash rebate or low-interest financing. A car might be selling for $25,000 but the manufacturer is offering $4,000 in customer cash for a final price of $21,000. In another example, a $25,000 car financed for five years at 6 percent would have a monthly payment of about $535. But with zero-percent financing, the payment is roughly $461. That’s a huge savings to you.
Check the Web sites for the latest incentives and rebates available for the car you want to buy. You can also watch for TV and newspaper promotions but, remember, the incentives don’t apply to all models and are not offered in all regions of the country. Furthermore, your credit must be very good to get the low-interest financing. And finally, keep in mind that there are some hidden incentives paid directly to dealers to push certain cars.
Research what incentives, if any, are offered for the car you want to buy. Create a car-buying folder and put this incentives information in it as you move to the next step.
Step 3: Pricing the car
Car salesmen will usually point to a car‘s “sticker price” (MSRP) as the amount you have to pay. However, the price the dealership is willing to sell a car for is often well below the sticker price. How do you know what to pay? Based on actual sales figures, TMV is the average price buyers are paying (also known as the “transaction price”) for a certain type of car in your area. The TMV figures, are adjusted for many factors including options, geographic region and color.
To find the TMV price, begin by looking up the car you want to buy . Keep in mind that this price includes the destination charge, which is levied by all manufacturers. (However, the invoice price might vary in certain regions where advertising costs and other fees are included. We recommend paying the fees listed on the invoice, but questioning any advertising fees that appear on the purchase contract.)
The incentives and rebates you researched and printed in the previous step are automatically factored into the final price. In other words, the incentive is deducted from the TMV price or the lowest negotiated price. If you are going to use low-interest financing, calculate your final buying price, then use our payment calculator to find your monthly payment.
Print these figures — the TMV, the incentives and the monthly payment — and put them in your folder for reference as you continue the car-buying process.
Step 4: Finding the exact car you want to buy
You should now have a specific idea of the car you want to buy. This means you know the year, make, model, trim level, options and color. The more flexible you can be about these specifics, the wider the range of the cars you’ll find available for sale. Being flexible will give you additional bargaining power. For example, a shopper might be very firm about the make, model and trim level, but could accept a variety of options and colors. If you’re a shopper who definitely wants hard-to-find options and a specific color, it will be more difficult to make a great deal. Why? You have no leverage as a negotiator. You have to pay the dealer‘s price or try to locate another identical vehicle. Obviously, if you do find the exact car you’re looking for, there’s no need to volunteer this information to the dealership.
In any case, locate the exact car you want by sending e-mails to the Internet managers of dealers in your area. In many cases, you will have to follow up with a phone call. Say something like: “I’m looking for this year’s Honda Accord. I’m not fussy about the color except I don’t want black or white. I want ABS and side airbags. What is the closest thing you have to that on your lot?” Often the salesperson will have to check his inventory and call you back. After a few phone calls you will have a good idea of how widely available the car is. If there are several dealerships offering the same car, you will be in a better position to make a good deal.
As you make phone calls and exchange e-mails, take careful notes. You should record information about each car you locate, including the color, options, and the dealership name. This will save time as you continue through the shopping process.
Step 5: Internet vs. Traditional Car Buying
In recent years, car dealerships have created a new pathway for car buyers, one which we strongly encourage you to use. You can either walk onto the car lot, in the traditional way buyers have done for years, or you can go through the “Internet department.” The traditional way means you will deal with a car salesman and negotiate face to face in the dealership’s sales office. If you choose the Internet department, you will remain at home as you communicate with the Internet manager by e-mail, fax and phone. The Internet route saves time and hassle and will also save you money.
Still, many people are drawn to the traditional way of car buying since they believe buying a car is just too big of a purchase to do remotely. If you go this route, you should test-drive your car salesman carefully before moving forward. Ask yourself if you feel comfortable dealing with them. Are they impatient and pushy? Or are they relaxed and open? If you asked them about a specific car‘s availability, did they respond to your needs? Or did they try to steer you toward another car simply because they have too many of that model in stock? Do they return your phone calls? Do they answer your questions in a straightforward manner? Or are they evasive and confusing?
By answering these questions you should have a sense of whether or not you want to buy from this salesperson. If you feel comfortable with the individual when researching by phone, and if the dealership does indeed have the car you’re interested in, set up a time to test drive the car, preferably when the dealership will not be very busy, such as a weekday morning. Before heading to the car lot, review all your notes and make sure you bring your car-buying folder. Also bring your checkbook, registration and proof of insurance. Keep in mind that you’re bringing these items so you’ll be ready to buy a car if you get a fair deal. Don’t feel obligated to purchase a car simply because you have all the necessary paperwork with you or because you test drove the car.
Step 6: If you are trading in your old car…
If you are trading in your old car to a dealer, you will probably not get as much money toward the price of a new car as you would have if you’d sold it yourself to a private party. However, trading in offers some advantages. You can solve all of your car-buying problems in one visit to the dealer. You can unload a hard-to-sell car without running advertisements and dealing with tire-kicking buyers, or long DMV lines. In some states, you will even pay less sales tax on a deal that involves a trade-in.
Begin the process by looking up your car‘s trade-in value. After you plug in all of the vehicle’s information (mileage, options, condition and colors) you will get a specific trade-in price. This will often be different from the offers you get once you are on the car lot. At a dealership the value assigned to your trade-in varies based on the time of the month, the dealer‘s specific inventory and the used car manager’s mood, but at least TMV will give you a rough idea of what your trade-in is worth.
If it’s important to you to get the maximum value for your trade-in, you should visit several dealerships and solicit bids. Tell the salesperson that the sale of a new car will be contingent on the amount he or she will give you for your trade-in. Also, tell them you are visiting several dealerships. With a little legwork, you may be able to boost the price you get for your old car by several hundred dollars or more. Remember, the extra effort you spend in getting competitive bids is far less than what it would take to advertise, show and sell the car yourself.
Step 7: Negotiating for your lowest price
Many buyers like to handle the question of price before they even go to the dealer. Internet salespeople are willing to discuss price over the phone — even by e-mail. The car salesman on the lot will try to get you in his office before he would get down to brass tacks and talk price.
It’s quite possible that, in your calls to various Internet departments, the selling price of the car has already come up. Often Internet salespeople will volunteer the selling price of their car since they know this is the make-or-break factor in most buyers’ decision making process. If you want to try to improve the deal, you have a few options.
Everyone has their own idea of what makes a good deal, but most people just want to know they got a fair price. Here, TMV will be your best guide. If you want to try for a rock-bottom price, start by getting bids from three local dealers. Follow this up by taking the lowest price, calling the two other dealerships and saying, “I’ve been offered this car at this price. If you beat it I’ll buy it from you.” They almost certainly will. However, keep in mind that you can’t play this game forever. Eventually, they will give you a take-it-or-leave-it price.
Also, be warned that if you ask the dealer to cut his profit, he might try to take it back somewhere else. Remember, a good deal isn’t just the lowest selling price. It’s the lowest total out-the-door cost on a car that meets your needs. This means that to get a fair deal you have to be alert throughout the entire purchase process, even after you and the salesman agree on a price.
Step 8: Closing the deal
If you feel good about the price you have been quoted, it’s time to take a look at the big picture. Many buyers focus on the cost of the car and ignore the related expenses. Besides the cost, you will have to pay sales tax and various fees which vary from state to state. These expenses can be estimated and totaled.
The simplest way to estimate total cost is to ask the salesperson to fax you a worksheet and invoice before you go to the dealership. This way, you’ll be able to review the figures in a relaxed environment. Compare the numbers from the dealership to those you have calculated and the TMV prices.
In some areas of the country, dealers have costs that don’t show up on invoice prices. This means the invoice price of the car you are researching might not exactly match the dealer‘s invoice. Don’t panic — and don’t begin making accusations. The dealer can’t track all regional fees, such as advertising costs. So, as a rule of thumb, consider the charges on the dealer‘s invoice to be nonnegotiable. However, if extra fees are written into the contract (such as “D&H” or “Administrative Costs”) which seem bogus or redundant, ask to have them removed, or say you will take your business to another dealership. For more information about this crucial point in the process read “Invoice Scams and Sudden Extras”.
Step 9: Reviewing and signing the paperwork
Once you have a deal, you can ask the Internet manager or car salesman to deliver the car to you at your home or office. This means you will review the contract and sign it in your space, not the dealership’s finance and insurance office (which many buyers find intimidating). Wherever this step takes place, you will be presented with the contract for your new car and a dizzying array of forms to sign. If you are in the F&I office, the finance manager (who is actually an expert salesperson) will try to sell you additional items such as extended service contracts, fabric protection, alarms or a LoJack vehicle locator. In most cases, we recommend turning down these extras — with the possible exception of the extended warranty, which provides peace of mind to some buyers. Additionally, it is worth noting that some states allow up to 60 days after purchase to cancel an extended warranty, but you should check local laws to confirm your options in your area. If the car is delivered to you, the contract is already drawn up, so these extras are not an issue.
To prepare yourself for the kinds of products that might be pushed on you, or inserted into the price without your knowledge, read High-Priced Dealer Add-ons.
If you have already seen a worksheet for the deal you’ve made, the contract should be a formality. Make sure the numbers match the worksheet and no additional charges or fees have been inserted. You will also be asked to sign various forms that register your new car and transfer ownership of your trade-in. Understand what you are signing and what it means. Ask questions if you don’t understand, and don’t ever feel like you have to hurry. Buying a car is a serious commitment and you should understand every document involved. Remember, once you have signed the contract you cannot take the car back.
Step 10: Inspecting and taking possession of your new car
Most dealerships detail the car and provide the first tank of gas for free. You will have one more chance to inspect the car before you take possession of it. Make sure you walk around the car and look for scratches in the paint and wheels or dents and dings on the body. If you are paying for floor mats make sure they are included. If anything is missing, or if any work needs to be done, ask for a “Due Bill” that puts it in writing. You will then be able to come back and get the work done later.
As you drive away inhaling that new-car smell, there is only one more thing to be done: enjoy your new car.