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5 Tips to Buying Your First New Car

Posted Aug. 12, 2014, at 4:50 p.m.
Last modified Aug. 27, 2014, at 9:48 a.m.

Even a virgin car-buyer can saunter into the dealership with enough know-how to walk away with a good deal and intact self-respect. The only daunting part of the negotiation is that, besides your house payments, this may likely be the most expensive purchase of your life. But no need to panic: just think of it as another worthy investment that’s taking you for a ride. It’s not as hard as it looks, and here are a few tips.

1. Keep Your Sights on Realistic Buys

Think of it as the law of supply and demand. If you’re dying for the same sexy wheels everyone else drools over, prices will never drop no matter how long you wait. Instead, embrace your inner geek. Look at what the dealer’s offering: if he has a parking lot full of Ford Focuses, but only four Ford Mustangs, he’s going to give you a better deal on the Focus.

Can’t stomach buying what no one else wants? Try to hit on a car that’s both in high demand and high supply; then your dealer will be more willing to chat down the price.

2. Know Your Budget and Stick to It

The less educated you are, the more likely you’ll overpay for a vehicle. On the other hand, there’s no point antagonizing a salesperson if he or she is offering a fair price.

Do a little homework to find out what vehicle you’re interested in; once you have a particular make and model in mind, research online what that car goes for your zip code. You can find all new cars on Kelley Blue Book with price listings for your area.

Also know the price of your current vehicle so that when the sales rep offers a trade-in that devalues your current vehicle, you can take it elsewhere.

3. Wait Until December

Make your new car a Christmas present to yourself—you’ll pay less. Dealers are desperate to push cars off the lot before the new year to boost yearly sales, meet year-end quotas, and collect on rebates. Keep in mind, however, the attendant risk that your model will be sold out.

Salesman are also often trying to push deals at the end of the month, and if you slip into the lot even at the end of the day, they may be tired enough to hand you a deal before you even negotiate.

4. One-up Your Salesman

Car salesman are notoriously pushy. Although you can hope for the best, it never hurts to plan for the worst. Plan on negotiating, but set a maximum price before you begin. Remember, they haggle for a living, so they’re good at it. Keep some information strictly private, such as your monthly budget. There’s simply no need for them to know–they need only know your budget for a new car. Bring a notebook and take notes on every offer they make, so that you can go back and reference if needed.

5. Learn the lingo

When you speak their language, you gain their respect. Here are a few terms that the salesmen know when you don’t know:

Invoice Price: the manufacturer’s initial charge to the dealer. The invoice price is often higher than the dealer’s price because the dealer will usually receive incentives and rebates from the manufacturer if they sell the car.

MSRP (Monroney Sticker Price): Federal law requires all dealerships to attach the MSRP to for-sale cars. The sticker tells you the base price (price of car without options), the kind, year, color, and fuel economy of the car, the manufacturer’s suggested retail price, and the manufacturer’s transportation charge. Only the purchaser is allowed to remove the sticker.

Dealer Sticker Price: the Monroney sticker price plus dealer-installed options that can range from paint jobs to after-market add-ons. Grinder: a customer who haggles interminably before sealing the deal. Hope you don’t hear this whispered when you walk off the lot.

This post was contributed by a community member. Submit your news →

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