Buying a Car

Buying a Car

Buying a car is like no other shopping experience. The choices seem to be endless. The price you see on the sticker isn’t the price you pay — you must negotiate. You can lease or buy, new or used. A trade-in is often involved. And most people have to navigate another separate transaction: financing the deal.

Top 10 things to know
Here is an overview of the most important points of this lesson.

1. Make sure you are getting the right vehicle.
This seems obvious, but you could wind up an unhappy car owner if you haven’t thought carefully about how many people, and how much luggage or gear you need to carry.

2. Assess the worth of your old car.
Whether you plan to trade it in or sell it, your current car can be an important factor in your budget. Checking the right Web site and maybe your local newspaper will give you a realistic valuation.

3. Decide whether new or used is best for you.
Cars are built better now than in the past, so used cars make a lot of sense. But if you get a rebate or other cost break, the math may be on the side of a new vehicle.

4. Consider whether leasing or buying makes more sense.
Leasing provides lower monthly payments than buying with an auto loan. But it’s not for everybody. If you don’t have money for a down payment or if you trade your car every two or three years, you may be a good candidate for a lease.

5. Do your homework and set your target price.
The Internet has made it easier than ever to find out the dealer’s cost for each vehicle and its options. That’s the first step to getting the best possible deal.

6. Shop for money before you shop for the car.
If you plan to buy with a loan, check your credit union or local bank quotations (on websites) to find the lowest rate. Getting a pre-approved loan will give you added confidence in negotiating a good price.

7. Negotiating a lease
In the complicated world of leasing, the dealer will have the upper hand unless you learn the jargon and how to negotiate the various segments of a lease deal.

8. Negotiate a purchase.
If you are doing it yourself, get bids from several dealers, keeping the focus on the dealer’s invoice price, which you will know from your research. We suggest ways in which you may be able to get bids without going to showroom after showroom.

9.If you hate haggling, consider hiring help or using an Internet service.
Online auto-buying services make things easy with pretty good, no-haggle prices. But with most of them, you get quotations from only one dealer. Consumer services that shop several dealers near you may deliver even better prices.

10. Don’t let the deal-closer close out your savings.
The finance manager isn’t there just for the paperwork. He or she wants to sell you high-profit financial and mechanical add-ons. These are seldom worth the money.

The right vehicle
Before you shop, do your auto-biography.

Hey, wait. Don’t go down to the car dealer and start shopping immediately. Are you sure that the car, pickup, sport utility, or van you have in mind is what you really need? If you rush into a deal without carefully considering how you will really use the vehicle, you could be making a $20,000 mistake, at the average new-car price.

Sure, you want a car that will make you smile. But consider the purpose of most of your driving. Is it commuting? Hauling kids? Weekends? Vacations?

If you drive more than half an hour to work every day, a combination of a comfortable ride and reasonable gas mileage become important. If you frequently drive clients or co-workers to lunch, a sleek coupe won’t be welcoming for whoever has to crawl into the back seat; you need a four-door sedan. If you frequently haul your kids and their many friends or classmates, a minivan or sport utility with three rows of seats may be essential. If weekend errands involve hauling building materials or large bushes, that same utility or van will come in handy.

Be honest with yourself. What is the largest number of people you carry regularly? What is the biggest pile of gear, luggage or haul from Home Depot? Once you have made this practical matchup, however, you still have lots of choices. With careful planning, you can get a vehicle that you need AND that you really want.

Unless you are that lucky car shopper who has really made it and plans to let the world know it with a luxury car, you have to fit your automotive wants and needs into what you can afford.