Step 6: Buying a new car
If you have gone through Step 1 until Step 5, you should already have a car you want to buy in mind. You may refer to Step 7 if your decision is to buy a used car. Buy a new car may sound like walk into a show room, test drive, and make payment. That is wrong! There are several new car buying tips you need to know as a savvy shopper to get the best new car deal in your town. Here we share with you step by step on how to buy a new car.
Understanding MSRP and invoice prices
MSRP price is Manufacture’s Suggested Retail Price or commonly known as “sticker price”. Invoice price is the amount that dealers pay for the car. This means the difference between MSRP and invoice price is the maximum amount a dealer earns. The MSRP for a 2012 Toyota Prius Five is $28,790 and if the invoice price for the dealer is $24,000, the dealer will earn $4790. In other words, invoice price is the dealer’s secret and only insiders will know the exact amount. This does not matter because as a consumer, you can contact more dealers and find the best car deal. Many first time car buyers get confuse about car price because different dealers offer different prices and services to attract their customers. We suggest start bargaining at $2,000 below the MSRP/sticker price. A consumer who gets a good car deal sometimes drives away a new car up to $4000 below sticker price.
New car incentives and rebates
Cash rebates, incentives, zero-percent or low new car finance, free upgrade, free accessories, or insurance cost are some of the promotions from dealers to attract their customers. Catch these rebates with your purchase and you can save up to a few thousand dollars in the deal. For example, the monthly car payment for a $23,000 car with 4% interest rate over four years is $519 and it is $515 for 3.6% interest rate. You could save $192 from the total interest paid. New car loan rates are different from banks, creditors, and dealers. There is no rule saying that a buyer must finance the car with the dealer. You can finance it else where if there is better deal. Do not forget to bargain with dealers for free extra accessories like tinted, door visors, spoiler, or free upgrade to special edition bumper.
Test drive new car
Readingnew car reviews from website allow you to understand details about a car but you will never get the feel of the car. Do not buy a car until you test drive it. Request a test drive before you decide to buy the car. At least you still have a chance to change your mind.
Best time to buy a car
The best time to buy a car is when the price is the cheapest. Some rumors said raining day or weekday is the best time because less walk-in customers and the dealer will reduce their price in order to get sales. End of model year or end of generation is also a good time to catch the best deal. This is because dealers want to clear of previous model year and keep the space for new model year. It is cheaper to buy a new car during end of model year but buyers may not enjoy the latest features or latest look that are coming soon. Other than that, year end is a good time. Buy a new car on Dec 2011 will be cheaper than buying it on January 2012. However, bear in mind that when you sell it in the future, a car registered in January 2012 will have higher price than the one in December 2011.
First time car buyer programs
First time always get discounts. First time car buyers are always loved by dealers. If this is your first buy, make use of the advantage from first time car buyer programs offer by dealers. Generally, you could get good rebates, low interest rates, and cheap insurance if your credit score is good with good monthly income.
Return a new car to dealer
Many people have a wrong idea that a consumer is eligible to return the new car to the dealers within a few days if they are not satisfied. This will only happen if the dealer allows you to do so by signing a dealer-buyer contract.
You may also like: