Buying New Car

Here are several things you should do when buying new car to prevent being taken for a ride at the auto dealership.

Buying a car isn't like buying lemons at the grocery store, and to ensure you don't wind up with a lemon from the car dealership or from a private owner, you need to arm yourself with the knowledge, tools and techniques that will get you exactly the car you want that fits your lifestyle and budget.

The most important thing to remember when buying a car at the dealership it is this: "Negotiate on price before you even talk financing". If you come off as being unsure to a car salesman and not well informed, then let’s face it, you're going to pay more than you really should, and you'll wind up with one very big sour lemon.

First and foremost never, ever tell a car salesman the monthly payment you can afford. This puts your negotiation at a disadvantage. They’ll play with the numbers to make the monthly payment come close to what you want, which usually means a larger down payment or longer loan duration, or both.

Just tell the car salesman you'd like to stick to negotiating the sale price before you start talking monthly payments, buying vs. leasing or anything else.

The same thing holds true whether you go to buy a used car from a dealer or private party -- the first one to mention price looses because once you say a number you can't change it or take it back!

It's on the table.

The seller is now in control and he/she can accept the offer because it was more than they were expecting, or they can refuse or counter offer with a lower number if it wasn't.

Like the saying goes "Knowledge is Power" -- You’ve got to inform yourself.

You can’t just go out willy-nilly and buy that sexy new car you just saw on TV.

Or you could, but that wouldn't be very smart, now would it?

And you just may turn out like my female friend I spoke about – stuck with a car you brought on impulse that you're dissatisfied with because after the purchase you found out it doesn’t quite fit your needs.

Or worse yet, your stuck with a high monthly payment because the car salesman knew you weren't well informed or prepared to negotiate.

The best advice I can give you is to do your homework, inform yourself, and determine what the best value is for you.

There are five criteria that make the best vehicle value: price, intrinsic quality, insurance cost, warranty coverage and resale value.

Try to narrow your search to 2 or 3 vehicles, and then compare your short list using the value analysis criteria below:

Check the blue book value price and range to determine what others are paying. Kelly Blue Book is commonly used in the Eastern U.S., while the NADA - National Automotive Dealers Association (Yellow Book) is primarily used in the Western states.

There is a third source you should definitely check, and it's Edmonds. There's a lot of good insightful information on their website; they have this kool feature for new car pricing I like where you type in your zip code and it tells you the True Market Value (TMP) of the desired vehicle locally in your area, not nationally, locally...how kool is that?

Use all three sources as a reference.

I've found that Kelly and Edmonds car values are the closest in my area which is the Northeastern U.S.

Remember that no two vehicles of the same, make, model and year are exactly alike; these published values are just a starting point to gage a vehicles value.

Perceived vs. actual quality – there’s not much difference today in the manufactured quality of a Japanese car vs. an American car, but the popular belief is that a Japanese car (or German) is still better.

Because of this false perception, a Japanese car holds its value longer while an American car depreciates faster.

The up side of this is that you can save money up front by buying an American car vs. a comparable Japanese car in the same class.

This is a good thing if you purchase and hold onto the American vehicle for several years.

This isn’t such a good thing if you lease an American vehicle since it rapidly depreciates over the first few years of ownership and negatively impacts your calculated monthly lease payments.

What are the reliability and safety factors of the vehicle you want to purchase as compared to other vehicles in its class? Read up on the vehicle test drive reviews.

What’s it going to cost to insure that baby? Talk to your insurance agent; heck, shop around and talk to several to get quotes on what you’ll pay to insure the vehicles on your short list. This cost alone could be the tie breaker.

What’s the manufacture’s warranty coverage for each of the vehicles you like? You may be surprised at the answer, so factor that into the equation also.

Remember what I said earlier about holding value? Well, it matters if you’re the type of person who likes to get a new vehicle every few years, but if you hold onto it until the wheels fall off and it's ready for the crusher, then this doesn’t have much weight or bearing in your decision.

If a domestic vehicle stacks up against the imports and you plan on holding on to it forever, then with everything being equal, your best value as far as price definitely will be American-made.

The reverse is true if you're only going to hold onto the vehicle a couple of years.

Now you’re coming down the home stretch.

OK, you've done your side-by-side comparison, and a clear winner should have emerged; so go ahead, make your vehicle selection.

Ah, feels good doesn't it?

Can't you just see yourself right now in your new car cruising down the road?

But, knock-knock, hello -- you’re not quite done yet.

Let's get back to work.

We have a few more areas to cover in detail before you visit the dealership and drive away onto that long, lonesome highway...such things as your car finance options, how to choose car insurance and understanding automobile warranty coverage will be covered in their own section headings within this website that pertain to you -- the new car buyer.

So click on the section tabs and read up; it'll be for your own good...and trust me...you'll be so, so glad you did.

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