How to Get A Great New Car Deal

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It's Your Money, Shop Wisely.

Buying a new car does not have to be the nightmare that you imagine if you use the proper tools and technology to undertake the endeavor. First, you need a pen and paper to compose lists that will help you analyze your research. List technology will help you add, eliminate, and compare facts to help you make the important decisions about your new car purchase.

Save Thousands on Car Loans Interest by Improving Your Credit Rating

Improve the deal you get on a new car by qualifying for the lowest car loan rate. By using a car loan calculator, you can see what your monthly payments will be under a variety of loan parameters. If your credit score is superior, you may qualify for special new car dealer discounts and incentives not available to people with lesser scores. A good credit rating will also help you qualify for a lower new car loan rate. Find out how to boost your FICO scores recorded at these three credit bureaus: Experian, TransUnion, and Equifax. Several months before you apply for a car loan, check your credit scores to correct any clerical errors that degrade your rating, such as correcting a payment that was incorrectly labeled as late. Another maneuver that can help your credit score is to pay down the balances on your credit cards. Try to get them down to no more than 25% of their credit limits. Leave unused credit cards open, even if you owe nothing.

What Type of Vehicle Would Be A Wise Choice For You?

No matter how good of a deal you get for your vehicle, if it doesn't fit your needs, it was not a wise choice. You have already decided that you want a new car instead of a used one, for a variety of reasons. What use will you make of the new car? What type of vehicle will fit your budget in terms of initial cost, car loan payments, fuel economy, practicality, warranty, and fun factor? Other factors in you choice could include the cost of insurance and crash test ratings. Create a list of the vehicles that fit your criteria and search the Internet for price quotes from new car dealers who have that particular model in stock. Find out which dealers offer discounts and other incentives. Learn about "dealer holdbacks" and how to capitalize on them. Do all of your price comparisons online, recording all of your data to use later.

Locate a New Car Dealer with Your Car in Stock

Most of the work you have done so far has been at home in front of your computer. You have compared models to pick the best match for your needs. You have obtained the invoice price and price quotes from a number of promising dealers who have your model on their lots. The invoice price is the approximate price that all dealers pay for the identical car. One of those dealers quoted you a price that is the lowest of all. Now is the time to head to the dealerships. Take a test drive at a number of establishments and talk to a number of dealers. A large part of the decision you make depends on the trust you develop with the sales person.

Close the Deal With Confidence.

Because of the research you have done, you are in an excellent position to negotiate the best deal on your new car. Sales people don't especially like dealing with someone who has done their homework. You know what the best price is for the vehicle in question; you have the list of other dealers and their best offers; you know which dealers offer discounts and incentives. Play one dealer of the other to work the price down farther. Eventually, they will be bidding for the chance to sell you the car.

The Consumers' Checkbook, an independent nonprofit consumer group, operates a service used by many thousands of customers each year to get great prices on new cars. You can use the same general approach and get a very good price on your own. What follows is advice that comes out of the experience of this service. You may have had friends tell you about sitting eyeball to eyeball for hours with new car dealers. It’s nonsense. They wasted their time. The only leverage any customer has with a new car dealer is the possibility that he or she will walk out—and either buy a car from another dealer or not buy one at all.

Choosing the car
Most public libraries and major bookstores have extensive information to help you select the type of car that will fit your needs. Three good sources of comparative information on cars, each of which is published annually, are The Car Book by Jack Gillis, Consumer Reports magazine’s April issue, and the December issue of Kiplinger’s Personal Finance Magazine.

Getting a firm price commitment
CarPrices.com offers their PriceWar service, participating dealers in your area bid to sell you the new car you select and there is no cost for this service. The Consumers' Checkbook offers a similar service called CarBargains (800-475-7283), which will get at least five dealers in your local area to bid to sell you the new car you choose, using the methods described in this article. You'll get a price commitment sheet for each dealer. There is a fee for this service.

Many credit unions, local American Automobile Association (AAA) chapters, membership warehouse stores, and employee associations have lists of dealers who have agreed to sell cars at a fixed markup from invoice. You can contact local organizations to see what programs are available. The dealers that participate in these programs may or may not pay to be listed, depending on the specific program’s arrangements.

Getting general car price information
Most libraries and bookstores, and many banks and credit unions, have books published by Pace Publications, St. Martin’s Press, and others showing list prices and invoice prices for new cars, and showing resale value estimates for used cars. Automotive News, available in some public libraries, gives information on rebate incentive programs.

The most comprehensive on-line source for free information are the NADA Appraisal Guides. Additional no cost on-line sources of information include CarPrices.com, Autosite and a site provided by the publisher of the Edmunds Price Guides.

You can also order up-to-date information for quick delivery to you for a fee from Consumer Reports (800-933-5555) which includes new car invoice and list prices and used car valuations.