The good news out of today's economy? It's a great time to buy a new car."The power is in the hands of the consumer," says Michael Caudill, auto expert and spokesman for NADAguides.com. A tightening credit market, the need for automakers to move metal, and some sizable government and automaker incentives are making it easier for buyers -- who have the money and the credit -- to make a deal.
Auto experts caution that while a reliable used car used to give buyers the most bang for the buck, that might not be the case today. "New cars with the compelling incentives being offered are, in a lot of ways, a better value," says Jack Nerad, executive editorial director of Kelley Blue Book, in Irvine, Calif.
But no one wants to leave any money on the table. So if you're buying now, here are 10 tips to help drive away with the best deal:
10 ways to save on your next new car
|1.||Bargain over the Internet.||6.||Get educated.|
|2.||Pit dealers against each other.||7.||Time the market.|
|3.||BYOF (bring your own financing).||8.||Shop your trade-in.|
|4.||Negotiate the vehicle price first.||9.||Think hard about vehicle choice.|
|5.||Realize that everything is negotiable.||10.||Pull a switch.|
1. Bargain over the Internet. Sure, you show up to test drive the car, but you negotiate price and financing via computer. You can even have the vehicle delivered to your home or office and sign the paperwork there, says Philip Reed, senior consumer advice editor for Edmunds.com.
You'll save three ways. First, most Internet department salespeople are salaried and get extra bonuses based on volume rather than commissions based on the sales price, he says. That means they have the incentive to cut you the best price to move cars, he says. The average savings when you deal over the Internet is $1,000 to $2,000, says Reed.
Second, you avoid the dreaded financing and insurance, or "F and I," office. This is where buyers can encounter the add-ons and extra fees which threaten to negate whatever great deal they negotiated over the Internet or in the showroom, he says.
Third, you can shop and negotiate during moments when it's convenient for you. No killing time on a hard plastic chair while your salesman "wrestles" his manager for a better deal.
2. Pit dealers against each other. The object here is to start a bidding war for your business. Once you've determined which make and model you want, contact a handful of dealers via the Internet, tell them what you want and when you want to buy. Then ask for their best price, says Jeff Ostroff, chief executive of CarBuyingTips.com. Let them know you're talking to other dealers and plan to give the sale to whoever cuts you the best deal, he says.
"Think of it as reverse eBay," Ostroff says. "They're haggling over you."
Do your best to make it a true comparison. "Be very, very specific about the vehicle you want," says Chris Denove, vice president of J.D. Power and Associates in Westlake Village, Calif. "Color choices, options, etc."
And be very clear on what that price includes. What you want to avoid is a lot of fees tacked on later.
Do you really want to see how low they can go? E-mail 10 different dealers, says Eric Evarts, associate editor for autos at Consumer Reports in Yonkers, N.Y. After 10 quotes on the exact same car, the lowest of the 10 "is the lowest you're going to get," he says.
3. BYOF (bring your own financing). Get preapproved for your auto loan before you start car shopping. Apply to a handful of banks and several credit unions to see who can give you the best rate and terms.
Keep the applications within a 14-day period and all the loan applications will only count as one inquiry, minimizing the impact on your credit. Once you settle on a lender, that preapproval should be good for about 60 days, giving you plenty of time to select your car and close the deal, Ostroff says.
As with the car itself, shopping around nets you the satisfaction that you've gotten the best possible deal on financing. Then, after you've negotiated a price on your new vehicle, ask the dealer if he can make you a better offer on the financing.
4. Negotiate the vehicle price first. Car deals have a lot of moving parts these days: the price of the car, the credit for the trade-in, the financing rate and the incentives. "I would try and keep the different transactions separate in my mind," Nerad says. But he admits, "That's tough to do."