David and I bought our first new car in 1994. We decided to purchase new after some bad luck with used cars. I needed something reliable to drive back and forth to work and college. I worked all day and went to school at night, and David did not want me stranded on the side of the highway.
Since then we’ve bought six more new cars, two trucks for him and a sedan and three SUV’s for me. That probably seems unfair, but when you consider that I’ve driven almost 80% of the over 530,000 miles in the last 18 years then you will see how it makes sense.
At the end of July we purchased David’s new truck, and in September we purchased a Nissan Pathfinder for me after realizing that his old truck wouldn’t work for the kids and I like I had planned . Going through this experience twice this year made me realize that we have come along way in our knowledge of buying a new car, and I wanted to share with you some of the tips we’ve picked up along the way.
5 Tips for Buying a New Car
1. Know before you go. Knowledge is power, and today with the internet there is no reason why you should not walk into the dealership fully armed with information. When we purchased my Trailblazer, the car salesmen told David, “she knows more about this car than I do.” He wasn’t lying. The salesperson has to know about every car on the lot. You only have to know about the one you want to buy.
I start with a site like Edmunds.com that allows me to compare vehicles of different makes and models to see what is available, to narrow down my choices, and to check out the ratings of the different cars in which I’m interested. David likes to check out forums for different cars to see what actual owners are saying about them.
2. Timing is everything. Everyone knows that the end of the month is the best time for buying a new car, but you also need to know when it is the best time of year. I’m convinced that from the end of July through Labor day weekend is the absolute best time. Dealers offer more incentives this time of year to clear out the current year models on the lot and to make room for the new. I’ve read the next best time of year is during the holidays. Everyone is spending money on gifts; therefore, the car dealerships tend to be empty. Desperate times call for lower prices. Or something like that.
3. Pricing is important. It is no secret that new vehicles cost a lot of money. When it comes time to purchase one you need to know where you stand on pricing. Once I have narrowed my choices down to one or two models, I determine the invoice cost. Edmunds.com is a good place to get this information. I look at at the different options offered in each package and decide what I can’t live without. I also review the manufacturers’ websites to see what advertised discounts are available.
Next, I review the dealers’ websites and compare inventory to see what they have and compare the stickers (which can often be downloaded) to see what different options are available. Rarely do you find a car that lines up exactly as listed on Edmunds. Manufacturers offer standard package upgrades, but once you get to the dealerships those standard packages can be configured in different ways. Obtain the package ID you are interested in and it will be easier to compare prices between dealers.
Another good resource is the actual dealerships themselves. I emailed each dealership and requested quotes on the truck David wanted. From there I was able to identify all the discounts available, even the ones that weren’t published, and then I used that information to negotiate the best price. When we received our quote, I checked off each incentive and made sure we received each one that we qualified for.
4. Read the fine print. You can have the most knowledge, perfect timing, and be the best negotiater in town, but if you don’t read the fine print when you get to the dealership then you are in trouble. If you’ve ever purchased a new car you know how it works. Everything with the salesperson is smooth and breezy. After they have gotten you to agree to a price, you are whisked back to the Finance Department where you have to sign a million papers and numbers are thrown at you like you are working on the stock exchange trading floor.
If you don’t pay attention that great price you negotiated is soon raised by thousands of dollars. Gap insurance, clear coating, environmental protectant, extended warranties… these are just a few things that can be added on to the cost of the car AFTER you’ve agreed on a price. These may be things that you want to purchase, but you need to be aware of their cost and have made a decision about whether you want to purchase them. If you have not yet made a decision then take your time and think about it. You will feel rushed and overwhelmed. Slow down, take a deep breath, and ask questions about every number on every form. Do not sign anything until you understand completely.
Another number to be aware of is the interest rate. Of course it is better to pay cash for a car, but not many people can do that. Before you walk on the dealership lot be aware of the interest rates available and use an online amortization tool to try to get an idea of what the note will be. Don’t forget to add in tax, title, and license fees. If you decide to finance the car through the dealership (sometimes this will qualify for additional incentives), make sure you review the interest rate and the term of the loan. If it does not meet your expectations, ask questions and see if there are other financing options available.
5. Be prepared to walk away. This is probably the hardest step. Getting a new car is exciting and fun, but at all times you need to be prepared to walk away. Do not get emotionally invested in a car until you are driving it off the lot to park in your garage. If the car doesn’t test drive the way you want, if the salesperson is a jerk, if you can’t get the price you need, if the interest is more than you expected… Be prepared to walk away. When you spend this much money you need to be happy with your purchase. If you can’t get the car you want or are unsatisfied with the purchasing experience then you will always regret your purchasing decision.
Have you purchased a new car? What would make your top five tips?