How To Buy A New Car For The Best Price
Compromise to a degree. Even if the dealer has the model you want, the car might not have some of the features you were looking for. Decide which options are really important and whether a vehicle not having all of them means you should consider a different car. As for price, large pickup trucks and SUVs have seen the biggest increases, while smaller cars, sedans, hatchbacks, and front-wheel drive SUVs have had smaller price hikes.
how to buy a new car for the best price
Factor in your trade-in. Upgrading to a vehicle with better fuel efficiency, more up-to-date safety features, and even just more comfort or style can be compelling reasons to buy a new car. If you have a car to trade in or sell before buying something new, you may still be able to leverage its value against the elevated price of new cars.
"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.
And shop around for the best rate. "People are being charged more for interest rates than they should be based upon their creditworthiness," says John Van Alst, a lawyer with the National Consumer Law Center.
So at the dealership, Reed and Van Alst both say, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you're planning to trade in another car and whether you're also looking to get a loan through the dealership. Reed says don't answer those questions! That makes the game too complicated, and you're playing against pros. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don't want to. Keep it simple. One thing at a time.
Once you settle on a price, then you can talk about a trade-in if you have one. But Reed and Van Alst say to do your homework there too. A little research online can tell you what your trade is worth in ballpark terms. Reed suggests looking at the free pricing guides at Edmunds.com, Kelley Blue Book and NADA. On Autotrader, you can also see what people in your area are asking for your car model. And he says, "You can get an actual offer from Carvana.com and also by taking the car to a CarMax, where they will write you a check on the spot."
So he and Van Alst say don't be afraid to walk away or buy the car at a good price without the trade-in if you feel the dealership is lowballing you on your old car. You have plenty of other good options these days.
"You're led to this back office. They'll often refer to it as the box," says Van Alst. This is where the dealership will try to sell you extended warranties, tire protection plans, paint protection plans, something called gap insurance. Dealerships make a lot of money on this stuff. And Van Alst says it's often very overpriced and most people have no idea how to figure out a fair price.
"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.
Gap insurance promises to cover any gap between the purchase price of replacing your almost-new car with a brand-new car if your regular insurance doesn't pay for full replacement if your car gets totaled. Van Alst says gap insurance is often overpriced and is fundamentally problematic. If you still want the product, it's best to obtain it through your regular insurance company, not the dealer.
I'm assuming you've already narrowed your choice of vehicle down to one or two very specific models, and are ready to make the purchase. The process I've outlined below works best if you give yourself at least one week to go through all the steps. This is to ensure enough time for thorough price comparisons.
Most car shoppers have tunnel vision when it comes to getting a great deal. They tend to focus on the price while ignoring other areas such as their financing, trade-in, extended warranties, and car insurance. One of my main objectives is to get you to see that buying a car is way more than just negotiating the price. That's actually the easy part - companies like TrueCar practically gaurantee you'll end up with a great price. It's really the other areas that trip up most car shoppers, but we'll get to those later. Right now, I'm going to teach you how to get the lowest possible price for any new vehicle of your choice.
The secret can be summed up in two words: DON'T NEGOTIATE. Sounds counter-intuitive, but it's actually very simple. The golden rule you need to follow is to get prices from at least 7 different dealers. Notice how I didn't say negotiate prices. Most dealers will offer you deeply discounted prices with zero negotiation as long as (1) they know you're getting prices from the competition, and (2) you contact them online or via phone - you should never discuss pricing while you're physically at a dealership.
The more dealers you collect prices from, the better your chances of landing an incredible deal. During my experience as an auto broker, I often received similar prices from the first 3 to 5 dealers I contacted, and it wasn't until the 6th or 7th that I would recieve a bid undercutting the competition by a large margin- sometimes by as much as $1,500. The lesson here is: Don't be discouraged if you get similar pricing from the first few dealers you contact. Most car shoppers will usually stop after contacting only 3 or 4 dealers - that's not going to cut it. Getting price quotes from at least 7 dealers is what I've found to be the magic number.
Note: in order to actually collect 7 different prices, you're going to have to contact way more than 7 dealers. Not every dealer will have your choice of vehicle in stock, and some will just not even respond to you - most likely because they're not price competitive.
Warning: If one of the dealers gives you a price quote that seems too good to be true (we're talking thousands lower than any other dealer), this could be a "demo car" scam. The dealer is trying to sell you a demo car without letting you know (you'll find out only after driving to the dealership and wasting your time). This usually happens with leftover models (last year's models). If you suspect this is happening, ask the dealer for the mileage on the vehicle - if it's more than a few hundred miles, it's likely to be a demo car.
Another common situation is where the dealer is quoting you a price based on rebates you don't qualify for. Some dealers include what's known as "qualified rebates" into the price, such as rebates reserved for Military or College Grads. The dealer knows it's shady to do this, but a lot of people see the low price and get enticed. Make sure to ask if the price includes any qualified rebates.
Everyone is looking for a quick and easy way to get a good deal. Unfortunately, it does take work and effort to guarantee the best price, but this first step is really easy and will take you 80% of the way towards getting the lowest price on a new car. There are many services that let you get free price quotes, but most are not worth your time. I've included only my top recommendations below. Most car shoppers will stop after this first step, because the rest of the steps require manual work and can take a few hours to complete. This is fine if you just want a fair deal and not spend a ton of time to get it - and in fact you may still get the lowest price just by getting automated bids. However, if you want the guaranteed lowest price on a new car, you need to complete all of the steps I've outlined.
1. TrueCar is one of the few car price quote services I recommend. You've probably heard of them or seen their commercials. They actually do provide good upfront prices most of the time; so much so that dealers started a backlash against the service, pressuring state legislatures to outlaw it. They were afraid TrueCar was going to take all the profit out of new cars. Anything that gets dealers this upset is a good sign for car shoppers.
To see the TrueCar price (which is free), you'll need to select the vehicle you want, then click on the orange button that says "Locate Dealers". You then fill out your information to see which dealers are offering discounted prices through TrueCar.
You can find each dealer's contact info through the manufacturer's web sites. Look for links that say "Find a Dealer", or "Locate Dealership". They're easy to find.Here are links to all the major manufacturer web sites...Acura
Some manufacturer sites only allow you to get a list of dealers within a small geographic area. That won't be enough, so the alternative method I recommend is to search Google with the following term "_____ dealers near me". Put in the name of the brand, such as Chevrolet dealers near me. 3. Get Price Bids From Remaining DealersUp until now, I've given you the low-hanging fruit. It's quite possible the best deal may end up being through TrueCar, but if you want to be positive that you're maximizing savings, you need to do some more work. 041b061a72