Getting the Best Car Deal

August 18, 2014

By Cait Klein, NerdWallet

Getting the Best Car Deal

August is the best time to buy a new car, according to a TrueCar study.  Deals on vehicles in the old model year abound as dealerships start making room for the new fleet. August transaction prices are on average $1,850 lower than those in December.

Still, you’ll need to negotiate to get the best deal on your new car. If the thought of haggling for the right price makes your stomach turn, below are some tips to get you started on the right road.

1. Line up financing first

Finding the right loan provider is just as important as finding the perfect car. Shorter loan terms and good rates are important factors. Credit unions often offer loan rates  that are nearly half those offered by banks and are flexible for customers with poor credit histories. Beware of dealer financing, which can be more expensive.

2. Choose a dealership

After deciding on the perfect vehicle, choose the right dealership for the sale. Get quotes from several dealers, asking about the invoice price and any incentives or deals. 

Part of asking for the right price is knowing the dealership lingo. Here are a few key terms you’ll need to navigate the showroom: 

  • Invoice Price – This is what the manufacturer charges the dealer. 
  • Base Price – This is the price of the standard car. Any add-ons will increase the price. 
  • Monroney Sticker – This is the sticker on the car window that shows the base price and the manufacturer’s suggested retail price (MSRP) for special features and the gas mileage.
  • Dealer Sticker Price – This is another sticker that shows what the dealer suggests for the installations of add-ons and dealer fees.

After picking a dealership, beware of dealer-related fees under the dealer sticker price that are not on the factory invoice. Make sure those are the first things you try to cut in negotiations. It can also be useful to check out the resale value of the car using tools such as Kelley Blue Book

3. Time the purchase right

Even if you can’t buy a car in August, timing your purchase right can help you save. Dealers feel pressure to make their sales quotas at the end of the month or end of the season, so shopping at these times can lead to major deals.

Catching a car salesperson at the end of the day is a great way to seal a deal quickly. It also helps to be the only person shopping, so head out during the week, when fewer people are out searching for cars.

4. Consider the cost of add-ons

Weigh the price of the various add-ons and whether you really need them. 

  • Avoid the frills – Items such as dog grates, DVD entertainment systems, rear back-up cameras, window tinting and special fabric treatments can add up. 
  • Consider the warranty – The manufacturer already provides a three-year warranty, and extended warranties purchased from the dealer can be pricey. If you want an extended warranty, you should price one out through a third party like your credit union, which typically offers discounted rates

Final Word

If finding the right car still feels overwhelming or haggling isn’t your strong suit, consider using a car-buying service that can help avoid stressful negotiations. 

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