Saturday, October 15, 2011

Top 10 Car Buying Tips

Car Buying Tips-

I have made some general observations about car buying from my experience over the past while.  These are my top 10 advice tidbits.
  1. There is basically no negotiating on car price any more for a new car.  You will be paying msrp or very close to it (less any available cash discounts) like it or not.  What you need to focus on is the extras they may try to charge you for.
  2. Often times there are cash incentives / discounts available, make sure you check vehicle websites for available incentives on the car you are interested in.  The salesperson may or may not mention the cash incentive up front.  I will be further detailing cash incentives in a later post.  You can be sure if there is a cash purchase incentive available there are also low interest rates being offered if you use the dealer financing, the dealer financing with no discount almost always works out better than the cash incentive unless you happen to have extra cash laying about.
  3. Make sure you know exactly what is included in the price of the vehicle you are interested in.  Some dealers include expensive undercoating, admin fees, extended warranty, unwanted options and anything else they can think of to charge you more.  It might be only "$10 extra a month" but that adds up to $600 over a five year purchase.
  4. Never start negotiation with the monthly payment, or now the popular bi-weekly payment.  The dealer wants to give you the lowest number possible to consider, so instead of the $30,000 purchase price they focus on the $250 bi-weekly payment.  First thing you need to nail down is the purchase price and every penny included therein.  Once you know what they are including you will know what you can back out of it.
  5. Try to  make sure you know exactly what options you are prepared to pay for before you go to the dealer and stick to your guns.  If you are considering a certain model make sure you test drive that model.  If you test drive the fancy model with sunroof, bigger engine and navigation it will be difficult to go back to the base model.... take my word for it.
  6. Don't be pressured to commit to a purchase.  The dealer will not run out of cars (well unless they need parts from Japan to make them) and you might end up buying something that is not exactly what you want.  This is a long term commitment of some serious funds so make sure you get what you want.
  7. Don't fall for the old line that they don't know how long the deal will be on for blah blah blah.  They may not know but I have been tracking car prices for the better part of a year now..... they don't change much.  New programs normally start on the first of the month, many go on for months and months.  I will be detailing this in a later post.
  8. New models cost more than old models.... If the 2012 is a vast improvement over the 2011 then it may be worth paying extra but if not then don't.  Dealers want to move the old model to get ready to sell the new model and normally you will see interest rates drop as the model year ages.  Quick example, one week ago 2011 Honda Accord 0.9% financing, now 2012 Honda Accord 4.99% financing.  The vehicles have very similar (maybe same) MSRP but the 2011 costs $60 less a month or $3,600 over 5 years due to lower interest rates.  Look at them.... they are the same car.  Do online research to see when new models are due out, its a good time to buy the old model if it is what you want.
  9. Find a salesperson you feel comfortable with.  If you don't like the one they send to you then tell them to send you another.  Remember this person will be making hundreds if not thousands of dollars from you, make sure you like them.  My partner bought a Mazda 3 last year, I couldn't handle the sales guy, he was just so fake, always smiling like a Cheshire cat.  I told them to give us the nice lady salesperson and they did no problem and we bought a car from them.  (I wonder if she got all the commission???)
  10. Make sure you shop around.  In St. John's there is basically one dealer for one type of car (with a few exceptions like 2 Ford dealerships next door to each other.... go figure).  But Clarenville, Gander, and Grand Falls all have major car dealerships.  They may offer better deals and have a different selection.
I have others to share but these are the first 10 that come to the top of my head, hope they help!

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