Buying a new car holds certain advantages – you are getting the latest technology, you have a manufacturer’s guarantee concerning the state of the car, and you are buying a vehicle that can last for long years into the future. However, because new cars are also a large expense, it can be easy to worry that you are paying too much for a car without even knowing it. Fortunately, there are several ways to know that you are getting the best deal possible. Let’s review them.
A price quote for a car is simply a stated price that a dealer will provide you for a specific model on request (if a dealer won’t give you a price quote, avoid them). This price quote is a great place to start for a few reasons. Not only does it show you how much dealers hope to sell the car for, but it also allows you to compare local dealers and see who offers the best prices…as well as who shows the best customer service.
Invoice prices are the prices that dealers pay for their cars, and can be found with a little online research. It’s common advice to shoot for the invoice price when negotiating, because dealers tend to get discounts on their cars well below even the “technical” invoice price.
Generally, local dealerships will be easier for you to work with. If you don’t have to travel far to buy your car, it makes negotiation simpler and puts more pressure on them instead of you when it comes to making the sale. That being said, you can probably find a better deal with a dealership in an urban area – or perhaps by hopping state lines, depending on average sales prices in your area.
Dealerships are more likely to offer good deals at the end of the month and toward the end of summer. The reason is simple: At the end of the month dealers are trying to meet their sales goals, and by summer dealerships are trying to get rid of as many models as they can to get ready for next year’s models.
Incentives, those little discounts that encourage you to buy, are a mixed bag. Some are great, while others can be deceiving. Look out for incentives that focus on a particular group of people (to which you belong). This includes incentives for military, students, business owners, first-time car buyers and others. These incentives have the best chance of getting you a good discount. However, research cash back and financing rate offers to see if they are worth your time.
A little bit of financial savvy can go a long way in getting you a good new car deal. In general, be wary of financing deals and plans that give you a low monthly payment. Dealerships will give you whatever monthly payment you want, but you’re looking at the wrong numbers – many finance plans will end up costing you a lot more in interest and may keep you from qualifying for certain incentives. While not everyone can be cash upfront for their car, you should at least have enough spare income to afford hefty monthly payments to end your car loan ASAP and avoid accruing interest.