The selection of cars in today’s auto market is enough to overwhelm any shopper. Between compacts, hybrids, trucks, crossovers, and all-electric vehicles, finding the right automobile for a individual or family takes time, research, and energy. However, once you find the model you’d like to drive indefinitely, it also takes finesse before and after you head to the dealership to guarantee you get fair terms on financing, trade-ins, and other aspects of the deal.
To help make the process go smoother, the team at Consumer Reports has supplied an exhaustive guide to new car buying. It includes several thousand words of advice aimed at simplifying the transaction and getting you in the right vehicle at the ideal price point. Since that treatise is too lengthy for some tired eyes to tackle, here is a cheat sheet to the venerable consumer agency’s wisdom in the form of nine golden rules for buying a new car.
1. Start with the lowdown on car loans
You don’t have to know which model you’re buying to figure out how much cash you have on hand and approximately how much you’ll borrow in order to close the deal on a car. Consumer Reports suggests visiting online lending sites to get a picture of local rates before contacting banks and credit unions to compare figures. The idea is to get pre-approved before you show up at a dealership.
Once you’re on a dealer’s lot, don’t fall for any special financing unless you qualify for that specific car. By this point, most car consumers are aware there’s fine print involved in any auto deal. Dealer financing may even be the best deal you get.
2. Fight for the interest rate you deserve
Just because you qualify for a great annual percentage rate (APR) on a car loan doesn’t meant a dealer will give it to you.
According to Consumer Reports, it’s common for car shoppers to find themselves paying for a loan at several percentage points above where they qualified before finding the right car.
In the same way it’s unwise to settle for a lower salary than one you could find elsewhere in the job market, you ought to lobby to receive the lowest financing rate you qualify to pay. Don’t go down without a fight, as it could end up saving you thousands over the life of a loan.
3. Know the trade-in value
Car dealers are quick to offer a lowball price for any car you plan to trade in to offset the price of a new model. You’re well-served to show up with a figure in mind that best represents the car’s value on the open market, rather than the price one or two dealers would pay. To lock down a number, you can hit any of the auto sites that offer specific pricing information.
Consumer Reports suggests auto consumers get an offer from a used car dealer as an appraisal. You can also purchase used car pricing guides for a fee. There are other ways to find the actual market value out in the real world on your own. Just start your own ad on Craigslist.com to see how your pricing fares. Selling a car on your own is more time consuming, but it’s also the way to get the best price. Consumer Reports suggests you weigh the higher price against the tax advantages of trading the car in to a dealer.
4. Set a standard price for the car you want
There are several twisting highways to navigate when you negotiate at a car dealership. One of them involves the quoted car price. Is the dealer selling the car you want at a higher price than buyers in your area are paying? To combat the constant upward shifting in price, find an estimate that Consumer Reports provides or use the Bottom Line Price service the company offers.
It also helps to check recent auto news reports to find out if the vehicle is struggling in the sales department. Just because the car isn’t selling well doesn’t mean it’s a lemon. You may have more negotiating power in this event.
5. Spark a dealer bidding war
When you get several dealers involved in the negotiation for your new car, you open up the possibility one will try to undercut the other. Consumer Reports suggests trying the anonymous system of asking for quotes before comparing, as well as the method of calling one dealer and specifically asking him or her to beat a price a competitor offered.
Negotiating prices is not everyone’s cup of tea, but there’s enough evidence to prove some maneuvering will win you a better price on the new car you want.
6. Threaten to take the deal off the table
An old negotiating trick worth using is ending your new car hunt when a dealer is not bending to your requests on any level. Consumer Reports reminds shoppers that there’s no shame in this move, especially when a dealer raises a price without offering a legitimate explanation. When you prepare to leave, dealers remember that no matter what percentage they hoped for a sale, a commission of zero is lower.
7. Prepare to wait a few weeks for a price drop
Some points during the year are famous for car promotions. Labor Day Weekend, New Year’s Day, and Columbus Day are just a few examples. If you’re hunting for a new car right before these holidays, it’s worth hanging on a few days to see what types of deals you’ll find. Constantly delaying your purchase is not a good strategy, though, as you might procrastinate until the next model year hits the market.
8. Know there are add-ons you don’t need in some contracts
Fine print is just as common in new car sale contracts as it is in cable, cell phone, and data plans. Consumer Reports notes the list of items you don’t need often includes corrosion protection and window etching of the vehicle identification number (VIN). The latter is far from essential, but many contracts are written so buyers are forced to pay for it.
9. Extended warranties on reliable cars aren’t worth it
Consumer Reports conducted extensive research to discover the value car buyers got from extended warranties in 2008. The study showed 65 percent of people who bought these warranties spent more than they needed to and regretted the warranty. Since then, cars have become even more reliable. If you’re shopping for a vehicle known for dependability, save your money for repairs as they come.