Once you have a ballpark idea of your budget, credit, and preferred style of car, it’s time to do your homework before heading into the dealership, to ensure you get the best deal. As with any major purchase, a little prep work at home can save you considerable amounts of money over the life of the vehicle and loan.
Researching Prior to Heading into the Auto Dealership
Rebates & Incentives
Almost all cars nowadays have some sort of rebate or incentive attached to them. Rebates and incentives can be a substantial source of savings off the sale price of the vehicle. There are local and regional dealer coupons, national automaker discounts, and even sometimes governmental rebates. The best place to find many of these is directly on the manufacturer’s website; however, they are often published in other places such as the local dealer’s website. You may also be able to find rebate and incentive information through online car and truck review sites such as MotorTrend and Edmonds.
Invoice Price
Most simply put, the invoice price is the price at which the dealership buys the cars from the automaker. This is different than the Manufacturer’s Suggested Retail Prices (MSRP), or the price they want it to sell. It is important to determine the invoice price so you can negotiate a reasonable fee with the dealer. A good rule of thumb is to set a target price of about 2% above the dealer’s cost as your price for the vehicle. For example, if a dealership paid $20,000 for a vehicle, you might be able to negotiate the sales price to $20,400 ($400 = 2% of $20,000).
A few great places to do your research so you can get a general idea of invoice pricing are Kelly Blue Book (KBB) and J.D. Power.
Crash Test Results
It’s certainly important to review the safety information of any vehicle you are considering purchasing. Luckily there are a few government websites providing accurate and up to date data for most new car makes and models.
Available Options
Vehicle options as also important, from what colors you want your new car to be to what extra features can be included on particular makes and models. Most dealerships or manufacturers allow prospective buyers the opportunity to build out vehicle specifics online before stepping foot on the dealership floor.
Competing Prices
As with any major purchase, it’s smart to shop around. See what your top vehicle picks are priced from a few different dealerships, including those found locally as well as outside of your neighborhood. It’s prudent to search both online and offline if you want to ensure you find the best prices and get the best deals. A little research upfront can save you a load of cash in the long run.
A few of the top automobile shopping websites that are great for comparing prices are eBay Motors, cars.com and AutoTrader.com.
But before we get too ahead of ourselves, let’s take a step back to weigh all your options, and help you determine if it’s better for you to lease or buy at this time. Buying isn’t always the best option as you’ll see when we cover buying vs leasing a vehicle next.
