Summary: spelling and punctuation
[[Image:Delorean.jpg|630px|thumb|left|The coolest ride may not always be the best buy. Photo by That Hartford Guy/[http://www.flickr.com/photos/that_chrysler_guy/7023624757/in/photostream/ flickr]/CC]]
Outside of buying a house, a car is probably the next largest single purchase that you're liable to make. At an average of $30k a pop, new cars aren't cheap. And considering the fact that a new car loses somewhere in the neighborhood of 10 percent of its value the moment you drive it off the lot, you want to make sure the vehicle you buy is a keeper.
In order to make your car buying experience a successful one and to reduce the stress of dealing with the infamous pressure of the auto sales floor and the tag-teaming sales staff, we've outlined some key strategies.
==Know the Lingo==
Buying a new car can be confusing, and one of the ways that car manufacturers and dealers try to gain an advantage over the buyer is through the use of jargon. Here are some key terms you need to know:
*'''MSRP (Manufacturer's Suggested Retail Price)''' ? This is the price advertised for by the car maker. Also known as List Price or Base Price, it does not include extras like options, taxes, and fees. This is the price the dealer would like you to pay.
*'''Sticker Price''' ? Basically the MSRP. This is the price you'll see printed on the fact sheet affixed to a vehicle's window in the showroom.
*'''Invoice Price''' ? The factory invoice showing what the dealer paid the factory for the car.
*'''Dealer Cost''' ? This is the final cost of the car paid by the dealership. It may be lower than the Invoice Price because manufacturers sometimes offer factory-to-dealer rebates.
*'''Incentive''' ? Usually offered by the manufacturer (as opposed to the dealer), these are promotional offers designed to increase dealership traffic and to make vehicles more attractive to potential buyers. Typical incentives include zero percent or low-interest financing or free options. There are sometimes factory-to-dealer incentives, that are designed to encourage dealers to push specific vehicles.
*'''Rebate''' ? A special type of incentive that takes the form of cash paid directly to the buyer when he buys a vehicle. (Many people use the rebate as a down payment.) Usually, rebates can't be combined with other incentives such as financing.
*'''TMV (True Market Value)''' ? A number calculated by [http://www.edmunds.com/car-buying/how-to-use-tmv.html Edmunds], TMV accounts for a whack of variables (rebates, incentives, delivery charges, fees, taxes and options) to come up with the average price buyers are paying for a specific vehicle in your area. If you're paying more than TMV for a new car, the salesperson clearly had the upper hand when negotiating with you.
==Establish a Budget==
Before you even start looking at cars, sit down, fire up Excel and create a budget. Colors and kick-ass sound systems come later. First you want to establish exactly how much you can afford to pay ? because no matter how sweet a ride is, you don't want to stretch yourself to the point that you end up living in it. Your monthly payment has to include car payments, fuel costs, maintenance and insurance. Put together a target payment (one that's comfortable) and a maximum (one that you can live with but would rather not). Ideally, you want to stay in the target payment range, but the max gives you your absolute ceiling.
==Know What you Want==
Once you know what you can spend, it's time to flex your analytical skills by weighing the many factors involved and the tradeoffs that may come with them. For example, a hybrid will reduce fuel costs, but at the expense of a higher sticker price. First, determine the vehicle type you're looking at (in other words, don't waste your time crunching the numbers on a two-seater Smart Car if you have a family of five), then make a list of must-have options. This might include an automatic transmission, room for five or air conditioning. Then list the features that are nice to haves, but not critical ? color, wheel size, heated seats and others.
This will be your master list to use when you begin to research specific vehicles. It will be a filter to eliminate the poor choices before you make the mistake of buying a car that looks so cool, but is the exact opposite of what you really need. Find the cars that meet all of your must-have requirements, plug in the additional costs for each (such as insurance and fuel), then you can start balancing the nice-to-haves against your budget.
==Invoke the Power of the Interwebs==
Of all the things that have changed the way we buy cars, nothing has had a greater impact than the internet. Thanks to the web, car buyers have more resources than ever to research a car, including reviews, owner reports, pricing comparisons, safety statistics, maintenance costs and resale data. Make use of auto manufacturer websites to equip and price out a car, check with insurance providers to see what the rates will be like and you can even buy online. Everything you need to help tip the buying process in your favor is available on the web. Here are some key websites you should hit:
*[http://www.edmunds.com/tco.html Edmunds.com] ? A one-stop site for tracking incentives and rebates, calculating car trade-in values and car reviews
*[http://motors.shop.ebay.com/6001/i.html eBay Motors] ? Bid on thousands of new vehicles being offered online by dealerships across the country.
*[http://www.iihs.org/ratings/default.aspx IIHS] ? The insurance Institute for Highway Safety tests all new vehicles in a number of crash scenarios and publishes the findings.
*[http://www.fueleconomy.gov/ US Department of Energy] ? This agency tests and publishes fuel economy ratings for all new vehicles.
*[http://autos.jdpower.com/index.htm J.D. Power] ? Ratings for all new cars (and manufacturers)
*[http://home.autos.msn.com/ MSN Autos] ? Lots of useful info for new cars including MSRP, invoice prices, reviews, key stats and expected reliability
*[http://www.kbb.com/ Kelley Blue Book] ? Tracks pricing data for new cars, including invoice and MSRP on models and options, taxes and average purchase price
==App it Up==
There are plenty of apps you can download to help narrow down the choices. A few examples:
*[http://itunes.apple.com/us/app/edmunds/id393630966?mt=8 Edmunds App] ? New car research tool with 24,000 vehicles and TMV pricing info
*[http://itunes.apple.com/us/app/aaa-auto-buying-tools/id473669939?mt=8 AAA Auto Buying Tools] ? Car builder, crash safety ratings, vehicle compares and reviews
*[http://kbb.com KBB.com] ? 360-degree views of cars, pricing info, local dealership directions and access to the Kelly Blue Book auto experts' Twitter feed
*[http://itunes.apple.com/us/app/auto-car-loan-calculator/id285538688?mt=8 Auto Loan Calculator] ? Simplifies the payment calculation with sales tax, trade-in, interest rate and amortization. Just don't forget to add insurance and maintenance too.
==Test Drive==
Don't buy any car until you've had the opportunity to test drive it. You may not be able to take out the actual car you would be buying (the dealer may have to order it), but try to drive the same model with the same options. If it turns out that you can't get in and out of the car without a physical contortion, a restricted view out the rear window makes it terrifying to back out of your driveway, or the acceleration makes you envy the guy on the bicycle beside you, it's much better to find this out before you own/are stuck with the vehicle.
==Negotiate==
There's an art to negotiating a good deal on a new car. Unfortunately, the deck is stacked against you as a buyer. The dealership's sales team does this 10 times a day, every day of the week. You do it once every five or 10 years. But, if you've followed steps one through seven, you're better armed than the typical new car buyer and knowledge is power. You know that when the dealer says they can't go lower than the MSRP, that they actually have significant negotiating room. You know what other people have paid for the same car. You know what the destination charge should be. From this, there are a few key tips when negotiating that will help you to come out on top of the deal:
*Negotiate the price of the vehicle without taking any rebates into account. Your goal is to be happy with the price, then have the rebates applied to make it an even better deal, but the salesperson will often try to use the rebate to confuse you (by subtracting it from the car price upfront to look more competitive or adding it to your trade-in value).
*Don't sign anything or pay a deposit until you're ready to commit to buying.
*When the salesperson has her final offer on the table, ask for a copy and a printout of all the vehicle specs and options as equipped, then take it home and review it in a relaxing, stress-free environment. Don't make a final decision under the pressure of sitting in a sales office.
*Consider shopping near the end of the month; sales staff and dealerships often have monthly quotas to meet and this may give you additional bargaining power.
*Read the fine print before you go into the dealership. Auto manufacturers advertise heavily and you'll often see something like 1.9% financing for 6 years or $5,000 cash back. You can't negotiate the dealer into giving you both; they're mutually exclusive offers from the manufacturer. Note that in the fine print, discounted interest rates may be applicable only to customers who qualify, so know your credit score and recognize that it will play a role here.
*Know the market financing rates. Before signing on for dealer financing, check with your bank ? they may offer you a better interest rate than the dealership.
*Beware the add-ons. Dealerships don't make as much money on cars as they once did (especially on economy models), but the add-ons are where they can turn a tidy profit. Expect a visit from the business manager who will push things like paint protection, upholstery protection, rustproofing, life insurance and extended warranties. An extended warranty is a personal call, but if you really want any of these other extras, you can almost always get much better prices through third party companies that specialize in the service.
<br clear="all" />
Remember that you are in control. No one can force you to buy a car. If you are uncomfortable at any point in the negotiations, walk away. Ask someone for advice or take a day to think about things.
[[Category:Cars]]
[[Category:Shopping]]
Outside of buying a house, a car is probably the next largest single purchase that you're liable to make. At an average of $30k a pop, new cars aren't cheap. And considering the fact that a new car loses somewhere in the neighborhood of 10 percent of its value the moment you drive it off the lot, you want to make sure the vehicle you buy is a keeper.
In order to make your car buying experience a successful one and to reduce the stress of dealing with the infamous pressure of the auto sales floor and the tag-teaming sales staff, we've outlined some key strategies.
==Know the Lingo==
Buying a new car can be confusing, and one of the ways that car manufacturers and dealers try to gain an advantage over the buyer is through the use of jargon. Here are some key terms you need to know:
*'''MSRP (Manufacturer's Suggested Retail Price)''' ? This is the price advertised for by the car maker. Also known as List Price or Base Price, it does not include extras like options, taxes, and fees. This is the price the dealer would like you to pay.
*'''Sticker Price''' ? Basically the MSRP. This is the price you'll see printed on the fact sheet affixed to a vehicle's window in the showroom.
*'''Invoice Price''' ? The factory invoice showing what the dealer paid the factory for the car.
*'''Dealer Cost''' ? This is the final cost of the car paid by the dealership. It may be lower than the Invoice Price because manufacturers sometimes offer factory-to-dealer rebates.
*'''Incentive''' ? Usually offered by the manufacturer (as opposed to the dealer), these are promotional offers designed to increase dealership traffic and to make vehicles more attractive to potential buyers. Typical incentives include zero percent or low-interest financing or free options. There are sometimes factory-to-dealer incentives, that are designed to encourage dealers to push specific vehicles.
*'''Rebate''' ? A special type of incentive that takes the form of cash paid directly to the buyer when he buys a vehicle. (Many people use the rebate as a down payment.) Usually, rebates can't be combined with other incentives such as financing.
*'''TMV (True Market Value)''' ? A number calculated by [http://www.edmunds.com/car-buying/how-to-use-tmv.html Edmunds], TMV accounts for a whack of variables (rebates, incentives, delivery charges, fees, taxes and options) to come up with the average price buyers are paying for a specific vehicle in your area. If you're paying more than TMV for a new car, the salesperson clearly had the upper hand when negotiating with you.
==Establish a Budget==
Before you even start looking at cars, sit down, fire up Excel and create a budget. Colors and kick-ass sound systems come later. First you want to establish exactly how much you can afford to pay ? because no matter how sweet a ride is, you don't want to stretch yourself to the point that you end up living in it. Your monthly payment has to include car payments, fuel costs, maintenance and insurance. Put together a target payment (one that's comfortable) and a maximum (one that you can live with but would rather not). Ideally, you want to stay in the target payment range, but the max gives you your absolute ceiling.
==Know What you Want==
Once you know what you can spend, it's time to flex your analytical skills by weighing the many factors involved and the tradeoffs that may come with them. For example, a hybrid will reduce fuel costs, but at the expense of a higher sticker price. First, determine the vehicle type you're looking at (in other words, don't waste your time crunching the numbers on a two-seater Smart Car if you have a family of five), then make a list of must-have options. This might include an automatic transmission, room for five or air conditioning. Then list the features that are nice to haves, but not critical ? color, wheel size, heated seats and others.
This will be your master list to use when you begin to research specific vehicles. It will be a filter to eliminate the poor choices before you make the mistake of buying a car that looks so cool, but is the exact opposite of what you really need. Find the cars that meet all of your must-have requirements, plug in the additional costs for each (such as insurance and fuel), then you can start balancing the nice-to-haves against your budget.
==Invoke the Power of the Interwebs==
Of all the things that have changed the way we buy cars, nothing has had a greater impact than the internet. Thanks to the web, car buyers have more resources than ever to research a car, including reviews, owner reports, pricing comparisons, safety statistics, maintenance costs and resale data. Make use of auto manufacturer websites to equip and price out a car, check with insurance providers to see what the rates will be like and you can even buy online. Everything you need to help tip the buying process in your favor is available on the web. Here are some key websites you should hit:
*[http://www.edmunds.com/tco.html Edmunds.com] ? A one-stop site for tracking incentives and rebates, calculating car trade-in values and car reviews
*[http://motors.shop.ebay.com/6001/i.html eBay Motors] ? Bid on thousands of new vehicles being offered online by dealerships across the country.
*[http://www.iihs.org/ratings/default.aspx IIHS] ? The insurance Institute for Highway Safety tests all new vehicles in a number of crash scenarios and publishes the findings.
*[http://www.fueleconomy.gov/ US Department of Energy] ? This agency tests and publishes fuel economy ratings for all new vehicles.
*[http://autos.jdpower.com/index.htm J.D. Power] ? Ratings for all new cars (and manufacturers)
*[http://home.autos.msn.com/ MSN Autos] ? Lots of useful info for new cars including MSRP, invoice prices, reviews, key stats and expected reliability
*[http://www.kbb.com/ Kelley Blue Book] ? Tracks pricing data for new cars, including invoice and MSRP on models and options, taxes and average purchase price
==App it Up==
There are plenty of apps you can download to help narrow down the choices. A few examples:
*[http://itunes.apple.com/us/app/edmunds/id393630966?mt=8 Edmunds App] ? New car research tool with 24,000 vehicles and TMV pricing info
*[http://itunes.apple.com/us/app/aaa-auto-buying-tools/id473669939?mt=8 AAA Auto Buying Tools] ? Car builder, crash safety ratings, vehicle compares and reviews
*[http://kbb.com KBB.com] ? 360-degree views of cars, pricing info, local dealership directions and access to the Kelly Blue Book auto experts' Twitter feed
*[http://itunes.apple.com/us/app/auto-car-loan-calculator/id285538688?mt=8 Auto Loan Calculator] ? Simplifies the payment calculation with sales tax, trade-in, interest rate and amortization. Just don't forget to add insurance and maintenance too.
==Test Drive==
Don't buy any car until you've had the opportunity to test drive it. You may not be able to take out the actual car you would be buying (the dealer may have to order it), but try to drive the same model with the same options. If it turns out that you can't get in and out of the car without a physical contortion, a restricted view out the rear window makes it terrifying to back out of your driveway, or the acceleration makes you envy the guy on the bicycle beside you, it's much better to find this out before you own/are stuck with the vehicle.
==Negotiate==
There's an art to negotiating a good deal on a new car. Unfortunately, the deck is stacked against you as a buyer. The dealership's sales team does this 10 times a day, every day of the week. You do it once every five or 10 years. But, if you've followed steps one through seven, you're better armed than the typical new car buyer and knowledge is power. You know that when the dealer says they can't go lower than the MSRP, that they actually have significant negotiating room. You know what other people have paid for the same car. You know what the destination charge should be. From this, there are a few key tips when negotiating that will help you to come out on top of the deal:
*Negotiate the price of the vehicle without taking any rebates into account. Your goal is to be happy with the price, then have the rebates applied to make it an even better deal, but the salesperson will often try to use the rebate to confuse you (by subtracting it from the car price upfront to look more competitive or adding it to your trade-in value).
*Don't sign anything or pay a deposit until you're ready to commit to buying.
*When the salesperson has her final offer on the table, ask for a copy and a printout of all the vehicle specs and options as equipped, then take it home and review it in a relaxing, stress-free environment. Don't make a final decision under the pressure of sitting in a sales office.
*Consider shopping near the end of the month; sales staff and dealerships often have monthly quotas to meet and this may give you additional bargaining power.
*Read the fine print before you go into the dealership. Auto manufacturers advertise heavily and you'll often see something like 1.9% financing for 6 years or $5,000 cash back. You can't negotiate the dealer into giving you both; they're mutually exclusive offers from the manufacturer. Note that in the fine print, discounted interest rates may be applicable only to customers who qualify, so know your credit score and recognize that it will play a role here.
*Know the market financing rates. Before signing on for dealer financing, check with your bank ? they may offer you a better interest rate than the dealership.
*Beware the add-ons. Dealerships don't make as much money on cars as they once did (especially on economy models), but the add-ons are where they can turn a tidy profit. Expect a visit from the business manager who will push things like paint protection, upholstery protection, rustproofing, life insurance and extended warranties. An extended warranty is a personal call, but if you really want any of these other extras, you can almost always get much better prices through third party companies that specialize in the service.
<br clear="all" />
Remember that you are in control. No one can force you to buy a car. If you are uncomfortable at any point in the negotiations, walk away. Ask someone for advice or take a day to think about things.
[[Category:Cars]]
[[Category:Shopping]]
Source: http://feeds.wired.com/~r/howtowiki/~3/n8g-SWbKHHs/Be_Smart_About_Scoring_a_New_Ride
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