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What Every New Car Buyer Should Know

car buyer know familyBuying a new car can be a stressful process. People often wonder if they are being taken advantage of, or if they are truly getting a good deal. Before you step foot into an automobile showroom, follow these tips to make the auto-buying process go more smoothly:

  • Read safety statistics and reviews using NHTSA’s vehicle comparison tool, available at gov. NHTSA conducts frontal, side, and rollover tests, which account for most car crashes in the United States. Look for 5-star safety ratings and get recall information.
  • Call your insurance agent to inquire about rates for different vehicles. According to Andrea Rogers, licensed insurance agent from New Mexico, “The cost of insurance can vary greatly based on the claims record of the make and model of a vehicle.” Thus, obtaining quotes on multiple cars is helpful to the decision-making process.
  • Make sure the car you wish to buy fits your budget. Decide whether you will buy or lease. While leasing is a generally a less expensive monthly payment option, buying tends to be better in the long run if you wish to pay off and keep the car. Understand that when financing a car, dealerships contract with banks for rates and can sometimes mark-up your APR. In some cases, it may be better to secure a car loan through your local bank.
  • Decide how much money you wish to use for a down payment. Since new cars depreciate after purchase, you can end up with a gap between the lease or your loan amount and what the insurance company will pay, should something happen to your new car. There are different types of GAP or “guaranteed auto protection” endorsements to cover the difference, so contact your insurance agent to request more information.
  • Your credit score plays a big part in determining your loan’s interest rate. Every year, consumers can get a free copy of their credit report from each of the three major credit card companies. You’ll want to make sure yours is accurate and that you resolve any outstanding issues.
  • If you have a trade-in, learn the approximate value of your current vehicle before you visit the showroom. Bear in mind that the overall condition of your car and things like mileage will affect your trade-in value. Websites like Edumunds, Kelley Blue Book, and NADA Guides can help you approximate the value of your current vehicle. A driver who is “underwater” with their vehicle (owes more than it’s worth) will have negative equity rolled over to their new vehicle. Likewise, if you owe less than the car is worth, the numbers will work in your favor.
  • Note that when you bring your car to a dealer for a trade-in, he or she will check prices paid during the last few days at dealer auctions for your type of vehicle. It is likely that they may use Manheim, the largest dealer auction company in the United States. While only dealers have access to Manheim, you can still ask the dealer for the printout of the MMR (Manheim market report), or you can check the dealer prices for your type of vehicle before you sit down to discuss the trade-in.
  • Ignore the sticker price when shopping for a new car. Instead, research and pay the true market value, or TMV. The TMV is the price most people are paying and is generally reflected by supply and demand. If you are looking for a haggle-free quote, and to see incentives, you can visit TrueCar.com, an automotive pricing and information website for new and used car buyers and dealers. The website shows buyers what they can expect to pay on average for a new car in their area and help consumers recognize a good deal. Dealers will often do their best to match the vehicle price you have configured online.
  • If you prefer to negotiate the price of the car in person, talk price and not monthly payment. Avoid getting an auto loan that strings out the payments over many years. This is a common tactic some car dealers may use to manipulate the overall price. To negotiate, be direct, polite, and firm on the price you’re willing to pay. Don’t negotiate the trade-in until the end. Be prepared to walk if the dealer refuses to negotiate, and if you don’t get a deal you like, be ready to visit other dealerships. Never buy from any dealer who pushes you too hard.
  • Before you even test drive, read reviews on the dealerships – look for dealerships with high customer satisfaction, positive reviews, and those which provide good maintenance services. When you decide to test drive vehicles, compare and evaluate different makes and models to help judge performance.
  • Buying a car at certain times of year could save you money. Avoid buying a car during big sales holidays, such as President’s Day weekend. During this time, advertising is at its peak and inventory is likely to run low. If dealer sales are slow, not only can you get a good deal, it may be possible to ask for free upgrades. This is dependent upon factors such as excess inventory.
  • Educate yourself on car rebates and warranties. A manufacturer’s rebate, often called a factory-to-consumer rebate, is a cash-back offer that comes directly from the automaker, or it can be in the form of a tax credit. A warranty is designed to offset repair costs after the purchase of a new vehicle. Some auto dealers may extend the terms of the manufacturer’s warranty as an incentive to the buyer’s. Always inquire about incentives. Some may offer no-cost oil changes for the life of the vehicle, free parking and shuttle service to or from a major airport, or coupons for service. It pays to ask.

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Rik
2 years ago

Also, you MUST NOW ASK whether a spare tire and car jack are included! … a friend just bought a new — car 5 months ago, got a flat and found out there was NO SPARE, just a tire repair kit and with NO CAR JACK, what good was that? … He also purchased an EXTENDED WARRANTY, but guess what? … Tires were not covered even under the first 100,000 mile warranty. The next new car I buy WILL have a spare tire AND jack, or NO SALE! … Can you believe it?

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