How To Get the Best Deal on a New Car
The Internet age has certainly revolutionized car shopping. With a few keystrokes, a website like CarSoup.com can deliver multiple offers right to your screen. Even lists of current rebates are at your fingertips. Doing some research ahead of time and having clear goals in mind will help you take advantage of this research tool to find the best deal on a new vehicle, your financing options, and the right dealership.
“Consumers have never been better informed,” says Mark Bilek, director of communications and technology for the Chicago Automobile Trade Association. “That makes the selection process a lot simpler. In addition, most walk into the dealership with printouts of the exact vehicles they want to see. And that tells you that the search for the right car has moved from visiting dealer after dealer after dealer from in person to online. Again, making shopping more convenient.”
Focusing your search on a specific vehicle is key. “I tell people to narrow their choices by reading online reviews, checking consumer publications and talking to their friends,” says Bilek. “Once they have the type of vehicle they want and a top three or four, I suggest going to dealers and taking each for a test drive and then going home. Give them time to think about it and list the pros and cons of each. Usually there is a clear winner and that makes buying a lot easier. Don’t worry about price yet, just get an idea of what you might be paying and make sure you can pay it.”
As far as when to buy, try the end of the month when salespeople will be looking at achieving monthly sales quotas. “Not everyone is able to shop at the end of the month, but if you can you are better off to wait,” says Jerry Robbin, president of Jerry Robbin Vehicle Negotiations, a Chicago-area purchasing consultant.
Another time to consider is “selldown” when dealers will be anxious to move the previous model year’s inventory to make way for new product, especially if a next-generation reengineered model is on the way. Incentives will be higher but the downside is you could be looking at a car that’s already up to a year old, even though it will still have a full warranty. Also, if the outgoing model is the last of a line then resale value will be lower.
If you plan to keep it a long time or rack up a lot of miles, resale value is less of a factor and an outgoing vehicle may offer more bang for the buck. Even though automakers are constantly improving their new vehicles, there might be something about the outgoing one you like better, for instance if the new version has changed in size. If you like having the latest styling or are planning to trade within a few years, you are better off getting the latest iteration now.
Watching for rebates is a great way to get a better deal, but don’t forget that low or zero interest financing is a form of incentive, too. These rates are usually contingent on a strong credit rating, so if you don’t qualify you’ll want to get pre-approved for a car loan at your bank or credit union.
Either way, know what the going rates are because if the rate offered by the dealer is competitive this can be a bargaining tool, too. They make money on the financing as well as the sale, so you might be able to negotiate a better price if you take their financing. To keep control of the deal you made “don’t agree to any add-ons after the price of the vehicle is agreed upon,” says Robbin.
While a monthly budget for your car payment is important, don’t get hung up and shop on that figure alone. Know the total you are paying for the car. Longer loan terms may lower the monthly payment, but you will be spending more in interest over time. Similarly, a low down payment offer can help you get into a car more easily, but can cost you more in interest overall.
If you are trading in a vehicle, check the value with an online price calculator, though Robbin cautions owners tend to overstate the condition of their vehicle. “The trade-in is where people get lost,” says Robbin. “The number one thing is do a little homework on what your car is valued. That way you are double checking what you are offered for a trade-in.” Robbin points out the higher your trade-in, the lower you pay in sales tax. He also suggests having your car professionally detailed and organizing all your service records to maximize your trade-in value.
Getting the best deal includes service after the sale. In a perfect world, you’d want to choose the dealer closest to you. “It’s always wise to compare prices,” says Bilek. “That’s really up to the consumer. Just like when considering any large purchase, it’s best to get a second opinion. However, in today’s ultra-competitive market you are likely to be able to make the best deal at the closest dealership with just a little work. Is it worth it to drive 20 miles and spend another Saturday for $100? Probably not.”
“You can get your car serviced anywhere but most dealers will only give you a loaner car for service if you bought your car there,” says Robbin.
While proximity will make seeking warranty repairs and maintenance more convenient, take a look at what added benefits each dealer has to offer. Some dealers are now offering extended or even lifetime warranties at no extra charge on all vehicles they sell. If purchasing an extended warranty Bilek suggests sticking to a manufacturer plan and shopping wisely. “There are different levels and if you are going to spend the extra for the coverage, wouldn’t it be nice to know you are covered completely, versus just engine?”
Check out the service department since lot of dealers have been enhancing this part of the business as of late. Ask if coupons for service specials can be mailed, emailed or sent to your phone. Many dealers are offering labor rates competitive with independent garages for those maintenance and post-warranty repair needs. On-site quick oil change facilities, and extended and weekend service hours are becoming more common and can make your life easier. “At most dealers, you can buy oil changes in advance at a discount. That’s a savings if you have the money,” adds Bilek.
By researching all the aspects of a vehicle purchase online you will not only find a nice price, but a deal you’ll be happy with many miles down the road.