Say hello to good times: How to buy a new car

Often the benefits of purchasing a new car outweigh those of purchasing a used car, such as the possible rebates, zero percent incentives and there is no need to buy an extended warranty. But with more benefits comes more research. These are some tips to help you decide if buying a new car is best for you and how to get the best possible price.

 

Selling the used car

More than likely, you’ll get more by selling your used car instead of trading it in to a dealership.  This is time consuming though, and you may want to sacrifice the price for convenience. You don’t have to tell the dealer right away if you are planning to trade in. You’ll notice this will be one of their first questions. By telling them you are still unsure, you’ll be able to easily negotiate the price of the new car and later negotiate the amount you will get for your trade.

 

Negotiating prices

The easiest way to negotiate the price of the new vehicle is to ask to see the invoice. Most dealers will resist at first, but once you’ve added pressure by threatening to purchase elsewhere, the dealer will usually change his mind.

When looking at the invoice, don’t just look at the bottom line number. Bring a calculator and add up the options. Pay careful attention to what is called the holdback. This number may appear after the letters “HB.” The amount listed is the portion of the price that goes to the dealer.

For example, if the number reads 106400, this is a holdback of $1,064. This is the money that goes to the dealer. Even if they say they are giving you the vehicle at $500 above invoice cost, they are actually getting $1,564, plus the amount the manufacturer is giving them for selling the vehicle.

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Be sure you look at the invoice and see exactly what they are charging. Also, make sure the original invoice is an original, not a copy. The original will bear a stamp or mark of a specific person or company. Any dealership that says they are a public disclosed dealer should show you the invoice at your request.

 

When to purchase

The best time to buy a new car is toward the end of the year, when the next year’s models are coming out. For instance, now would be the best time to buy a 2002 vehicle. They usually have higher rebates and offer zero percent interest. Occasionally, some dealers will offer both. Though this is rare, watch for these deals.

It’s best to find a deal with zero percent interest. This saves customers quite a bit of money.

 

Financing

The next step is getting the new car financed. The best thing to do is get the financing yourself. You can save at least $500-$2,000. That’s money the dealer usually gets that you don’t even know about, and it does ultimately come out of your pocket. So going to your bank is well worth your while.

 

Insurance

Last, but not least, you must have full coverage insurance. This can be pricey, so shop around, get some quotes and do this before buying the vehicle. Avoid the nasty surprise of how much the insurance is actually going to cost. Unless you put down near 50 percent, get GAP insurance when purchasing your new vehicle.

If you are ever in an accident and your car is totaled, your insurance only pays what your vehicle is worth. And when you drive a new car off the lot, you can end up in a financial mess. (If you purchase a $30,000 vehicle, when you drive off the lot you usually lose around $4,500 in value right away.) GAP generally only costs $300-500, but can save you thousands. You can purchase GAP insurance at the car dealership.