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Surfing the Web to buy a car

When it comes to car shopping, knowledge is power.

The more you know about the car you want, the better off you'll be, and there may be no more complete information source than the Internet. Not only can the Web give you the lowdown on pricing, reliability studies and financing options, you can also use it to track down a specific car or SUV in your area.

Discounts, rebates abound for new cars
Are you a must-buy-new kind of auto shopper? You're in luck. Automakers are anxious to sell, and that means plenty of discounts and rebates for savvy new-car shoppers.

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"New vehicle affordability is phenomenal right now," says Ron Pinelli, president of Autodata Corp. in Woodcliff Lake, N.J. "The price pressure is intense. There's good deals to be had across-the-board."

For up-to-date information on incentives and new-vehicle pricing, visit Web sites such as NADAguides.com, Edmunds.com, AutoSite, Autopedia, Kelley Blue Book and CarPrice.com. Be sure to visit several Web sites when researching pricing information. Everything from sticker price to customer rebate information may vary. It's wise to cover all the bases. When in doubt, contact an auto manufacturer directly.

Be sure to ask about regional incentives in your area. You could save hundreds, maybe thousands more, by snapping up a regional incentive.

Having a tough time settling on a car? AutoTrader.com, Cars.com and Intellichoice let you pull up side-by-side vehicle comparisons of various makes and model years. These sites can help you decide what kind of car to buy and help you pinpoint differences between model years.

Know exactly what kind of car you want? Great, now you can focus all your energy on getting a good deal. You'll need to do plenty of homework. Let's start by taking a closer look at those hefty new car incentives.

Exploring incentives
Let's say the shiny new car you've had your eye on comes with an ultra-low financing rate or a $1,500 rebate. What's the better deal? It depends. First-time car buyers and people with little or dinged credit may be better off taking a cash rebate. Repeat buyers and people with good credit will probably do better with the low-rate financing. Here's why.

First off, everyone is eligible for a manufacturer's rebate, and that's not true for all those discount financing deals. You need squeaky-clean credit to land a rock-bottom financing rate. That's why it's a good idea for folks with no credit or flawed credit to snap up rebate offers. A rebate may also appeal to a first-time buyer who doesn't have a lot of cash for a down payment or another car to trade in.

What do you do if you qualify for the rebate and the discount financing? Use this calculator from Bankrate.com to determine which will be the better deal.

If you don't qualify for the rock-bottom financing rate from an automaker, you may still be able to land a good deal from a bank or credit union. Your best bet is to shop around. Bankrate.com lists national averages for new car loans as well as rates available in local markets around the country. You may also want to check out the financing deals available from Web sites such as Carlender.com, E-Loan and PeopleFirst.com.

Finance off the lot
It's best to have a financing deal in place before you set foot on an auto lot. That way if a dealer wants your financing business, he's going to have to beat the best rate you've found on your own. And he won't be able to talk you into signing on for a loan with a higher interest rate than you deserve.

"For financing, get pre-approved before you go to the dealer," says Jesse Toprak, manager of pricing and market analysis for Edmunds.com. "Tell them 'I got approved for 5.9 percent. Can you do better than that?'"

Not sure how much of a down payment you can afford or how long to finance? This down payment calculator from Bankrate.com will help you crunch some numbers. Consumer experts recommend making a down payment of 20 percent or more and financing for no longer than four years.

When you step on the dealer's lot you'll want to know precisely how much you can afford to spend on a car; the latest pricing and incentives on the car you want; the value of your trade-in; and the interest rate you qualify for on an auto loan from a bank or credit union. Once you hit the lot, be sure to negotiate the price of a new car, the price of your trade-in and your financing separately. A dealer will try to roll one or more of these transactions together. Don't let him. A dealer might also say that you have to pay sticker price to qualify for discount financing deal -- don't fall for it.

"First negotiate the price of the vehicle," Toprak says. "Don't even talk about incentives and rebates at first."

Used cars waiting on the Web
In the hunt for a used car? The Web can help you track down used cars, trucks and SUVs for sale near you. MSN Carpoint, AutoTrader.com, autobytel.com, autoweb.com, cars.com and StoneAge.com are among the sites that list used cars for sale.

Because the sites let you search for cars by make and model, price and location, it's easy to do a quick and thorough search of cars in your area. The selection of listings often beats what can be found in Sunday's newspaper.

Even if you don't end up buying a specific vehicle found through an online ad, surfing classified ads on the Web can give you a good sense of the cars available in your area. This information will give you more leverage when you negotiate with a seller on price. Remember, the more you know about the used vehicle you're buying, the better the deal you're likely to land. So do your homework.

For in-depth used-car pricing information, check out sites such as NADAguides.com, Edmunds.com and Kelley Blue Book. Consumer Reports' Web site includes a listing of used cars that have performed well in its reliability studies.

Some sites, such as CarFax, let you check a car's history by its vehicle identification number. You can find out if a car has had one owner as the seller claims, if the odometer has been rolled back and if a car has been junked or salvaged. Experts point out that some states do not participate in VIN number searches due to privacy issues. So these searches may not always provide the complete history on every vehicle.

Manufacturer certification means extensive inspection
Another way to take some of the guesswork out of used-car shopping is to choose a car that has been certified by its manufacturer. These cars have been subjected to extensive inspections and reconditioning aimed at bringing them up to new car standards.

Most certified used cars are cars that have been returned to a dealer after a lease ends. Many of these cars will still be covered under their original warranties. All of the major automakers have these programs. Intellichoice ranks the certification programs of 30 automotive manufacturers on its Web site.

Online auctions -- drive before you buy
Online auctions are another way to find and buy a used car over the Internet. Yahoo!, eBay and Autobytel.com are among the sites that auction autos. Consumer experts advise caution when buying or selling anything online. It's no surprise that they have severe reservations about buying a car through an online auction. Buying a car without driving it is a big no-no, let alone buying a car without actually seeing it.

Listings on auction sites are much more detailed than typical classified ads. An eBay listing for a 1996 Honda Accord had 16 photos, including a shot of the odometer and a close-up of a slight stain on the trunk of the car. Some sellers include photos of a vehicle's engine as well as service and inspection records.

Lots of people prefer to bid on cars in their local area since the burden of delivering the car often falls on the buyer. Rather than pay for cross-country shipping costs, some long-distance buyers fly out and pick up the car themselves.

But no matter where you buy the car, a trip to the Web might save you some major dollars.

-- Posted: Dec. 9, 2003

Lease or Buy? How much car can you afford? Bankrate helps you do the numbers with our calculators
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