Tuesday, May 27, 2014
Getting a Good Deal on a New Car
A typical Canadian motorist will purchase 10 to 12 cars during the course of his or her life. If you’re planning on buying a new vehicle and want to get a good deal, it’s essential that you do your homework before going to the dealership. Follow the advice below and you will leave the dealership with not only a new car, but also the satisfied feeling of having gotten the best deal possible.
Whittle down your choices
First, you have to decide what kind of vehicle suits your needs. Do you want an SUV with plenty of room for the family or a small car that’s fuel efficient? You have to start by defining your model class and price range.Do your research
Your next step is to do research on the features, safety ratings and performance reviews. The class of vehicle you prefer may have a dozen different models, so you need to narrow down your selection. Consult dependable online sources such as Edmunds.com, JDPower.com and ConsumerReports.org
Arrange financing off the car lot
Before visiting the dealership, line up the financing for a car purchase through a reputable third party. Auto dealers make much of their profit on financing deals, so third-party financing will likely carry better rates and terms than what the dealer offers. Save money by arranging your car loan off the lot and ahead of time.Take a test drive
You should take any vehicle you’re considering buying for a test drive. Even if the reviews are positive, you need to be sure that you feel comfortable behind the wheel. So test-drive the vehicle for at least 20 minutes on the same roads that you usually frequent. Adjust the seats and become familiar with the various features.
Negotiate a better price
The car salesperson will try to sell you the car for the Manufacturer Suggested Retail Price (MSRP). This is the published price--what the dealer hopes to sell for, but not what he expects to sell for. If you can knock $500 to $1,000 off that price, you’re probably getting a good deal. But in order to do that, you need to know the factory invoice/wholesale price. You also need to know what factory rebates are available on the car. All this information is available in a CareCostCanada Wholesale Invoice Price Report.
Take the invoice/wholesale price, and deduct all the relevant cash rebates. This is the amount at which to start the negotiations, since this is the true price that the dealer paid for the car from the factory.
If you’re considering a car with a sticker price of $30,000, the dealer may have paid $25,000 for it and wish to make a 10% profit - $2,500. But if push comes to shove, the dealer may settle for a 3 to 4% profit - $750 to $1,000. That would mean a saving to you of as much as $1,750 that would otherwise have been pocketed by the dealer as additional profit. It pays to be an informed and skilled negotiator at the dealership!
For information about PRUDENT VALUE CARS, visit our web site: www.prudentvaluecars.ca