ALT-1 The best Methods to Purchase new Cars
You made the decision to finally replace the old clunker, the question now is how to avoid being ripped off at the dealership and secure the best deal possible for yourself?
The key to any transaction is preparation. Go into the dealership ready for battle with as much ammunition or in this case prep work as possible to ensure a successful transaction. The first place to begin is sitting right in front of you, your old faithful computer with Internet connection. I recommend reviewing Consumer Reports, to find out which vehicles are the best rated, edmunds.com to determine the dealer costs, rebates or low interest financing available and lastly Kelly Blue book(kbb.com) to find out your current vehicles trade-in value and to determine the trade-in value of your future vehicle choice. No one wants to buy a thirty thousand dollar car to find out after two years it's only going to be worth ten thousand. Vehicle depreciation varies greatly between vehicle and models. Do your homework, you have the time, run the numbers and find out now before you drive off and find out you actually drove off a cliff.
Next item on your check list is to obtain financing prior to ever stepping foot on the dealers lot. Compare rates and terms through your bank, local credit union, eloan.com, capitalone.com etc. Find the rate and terms that fit your needs and price range before you walk onto the showroom floor. Special financing rates in lieu of rebates may or may not be a good deal. Do the math before you get to the dealership. Often times taking the rebate is the better deal. After arriving at the dealership and you tell them you already have preapproved financing in hand they may offer to beat the rate, thats fine as long as it benefits you, let them. Don't ever get sucked into the "what kind of payment do you want?" game. All that will lead to is a long term loan at the payment you want, but more cash out of your pocket and into theirs.
Go to the dealership after hours to look at what's available. You can check out the inventory, take some notes on the window stickers and options and compare what you find to edmunds.com's dealer invoices, without being chased through the lot by salesmen. Gm has gmbuypower.com where you can put in your zip code and access various dealers in your area's inventory and window sticker for the vehicles you like. It's a good tool to see what's on the lot without making a trip. An added bonus: If you request a brochure on a specific vehicle you are added to their data base and sometimes receive special private offers such as bonus rebates etc., remember every dollar counts, better in your pocket than theirs. Most major manufacturer's have an employee of family buying plan. These plans allow you to purchase a vehicle at a preset price with no negotiations necessary. GM extends their Family First program to friends of employees, ask around it could make your pricing job and purchase even easier. Your overall goal should be to purchase the vehicle as close to the invoice as possible, a hundred to three hundred over invoice is a good goal for most vehicles. Don't worry about the dealership, most of them receive two to three percent hold-back from the manufacturer when they sell a car. Additionally, some models have special manufacturer to dealer incentives which provide the dealer even more cash and allow them to sell a vehicle below invoice and still make a profit. Edmunds.com can provide you with this information.
After getting your initial box of ammunition ready, the next step is to contact some local dealerships over the Internet and request price information for the vehicle you are looking for. Don't go to the dealership until after you have a firm price for the vehicle negotiated and in hand! Pit dealership against dealership, tell them the offer you have from their competitors and ask if they can beat it. Use the Internet and phone to eliminate as many surprises as possible and always ask what the dealership fees are. Some dealers may offer you a great price and you go there and find out they have a thousand dollar dealer fee. That's all profit in their pocket and cash out of yours, know before you go. Resolve all price issues while your in the comfort of your home on your turf, not theirs and take copies of your email correspondence with you just in case they try to pull a quick surprise. Always be ready to walk, if things are not what you have been previously told.
Your at the dealership and it is now trade in time. The best thing to do is to sell your vehicle yourself and avoid the trade in issue completely, but sometimes that's not practical or possible. Whatever you do, do not let them start intermingling the new purchase with the trade. These are two separate transactions and you need to keep them separate to avoid confusion and being ripped off. Some dealerships will try to low ball you on your trade. Have your Kelly Blue Book value printed out and dig your heels in. Be prepared to walk if the dealer is being unreasonable, don't expect retail value, but definitely fight for trade value. This becomes even more of an issue if your upside down on your current vehicle, but that is something you should already know from your research and you have already factored into your cost analysis.
If all goes as planned, you have successfully negotiated a good deal for yourself and the dealer will have his profit. The dealer will want to sell you a service contract and even-though I am not a big fan of them, it's a decision you will have to make. If you do decide you want a service contract, it's best to purchase the manufacturer's contract from the dealer. As long as the manufacturer is in business they will honor your contract and you don't have to worry about acceptance from other dealerships where you may take your vehicle for service. These too can be negotiated and you should try to get them to lower the price. Always remember, if you don't ask, the answer is already no, so you have nothing to lose by asking.
Proper preparation avoids buyer's remorse and being ripped off. Take the time to do your homework,let the dealer know going in you did your homework and they will be less likely to try to sneak one by you. If you are a pushover, take back-up, just brief them on your plan and overall expectations. It's your money, keep as much of it in your pocket as possible.
