| By:
Simon Harris
The cost of
a new car nowadays equals about what my parents paid for their first
home. It's not a purchase to be taken lightly. You want to do everything
possible to ensure you get a great deal.
Never rush your
decision. If you are completely without transportation, rent a vehicle
until you find the right car. When you rush a purchase, you usually
end up on the losing end of the deal.
Thanks to the
Internet, you can uncover the typical retail cost of a specific
make and model. With a little digging, you can find out the wholesale
cost as well. This information makes you a powerful negotiator.
You want a win-win
situation with the car dealership. They need to make some profit,
and you need to feel you paid a fair price. It's fair to negotiate
to a price that's $500 above dealer cost or about 20% off the sticker
price. So take along your calculator when you shop.
If the only
cars on the lot have expensive options you don't care for, you might
want to order a car to your specifications. You might wait a bit,
but will save money on options you don't need.
Check with the
dealership to see if you can return the car if you don't like it.
I did this once. The car I purchased ended up less comfortable than
my old car, so the next morning I took it back for my check and
my trade-in. Many dealerships now offer this option.
You may have
heard the advice to shop the last day of the month for better deals.
It's true that you might get a better deal from a salesman then.
As far as trade-ins
go, do your research here, too. Knowing the value of your old car
makes it easier to negotiate a better price for it. Try not to talk
about a trade-in possibility until you get a purchase price.
I researched
the value of my little red Corolla and found that it was $3500.
One dealership offered me $1200 because "they'd have to repaint
it". Another dealership offered me $3500 and complimented me on
taking such good care of the engine. Stick to your guns when it
comes to getting the value of your trade-in, especially if you’ve
had your car serviced regularly.
You may want
to advertise your older car and sell it privately. Typically you
can get a better price this way, but it may take a little time.
A service contract
will likely be brought into the negotiation. The consumer information
I've read discourages buying an extra contract on a new car, as
it's not likely a problem will occur during the first months of
use.
Whatever you
do, always read the fine print of any contract before signing it.
Ask a bazillion questions about what certain phrases mean if you
don’t understand something.
Simply because
the car just rolled off the factory line doesn’t mean you should
buy it without asking questions. Keep on your toes during the negotiation
process. There’s nothing like the thrill of getting a new car AND
creating a win-win situation for you and the dealer.
This article was posted on August 10, 2005
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