think about what car model and options you want and how much you're
willing to spend. Do some research. You'll be less likely to feel pressured
into making a hasty or expensive decision at the showroom and more likely
to get a better deal.
Consider these suggestions:
Do a AUTO LEMON - USED CAR HISTORY CHECK for your own car if you want to trade in or
sell your used car, it will help and give great assurance to prospective
buyer to give decision as soon as possible by showing a printed vehicle
history report of your car.
Learning the Terms
To give you a better sense of the negotiating room you have when buying
your car, it helps to understand the following
terms, listed here in order of increasing price:
INVOICE PRICE is the manufacturer's initial charge to the dealer.
This is usually higher than the dealer's final cost
because dealers often receive rebates, allowances, discounts, and incentive
awards. The invoice price always includes freight
(also known as destination and delivery). If you are buying a car based
on the invoice price (for example, "at invoice,"
"$100 below invoice" "two percent above invoice")
be sure freight is not added to the sales contract.
BASE PRICE is the cost of the car without options, but includes
standard equipment, factory warranty, and freight.
This price is printed on the Monroney sticker (see below).
MONRONEY STICKER PRICE, which appears on a label affixed to the
car window and is required by federal law,
shows the base price, the manufacturer's installed options with the
manufacturer's suggested retail price, the manufacturer's
transportation charge, and the fuel economy (mileage). The label may
not be removed by anyone other than the purchaser.
DEALER STICKER PRICE, usually on a supplemental sticker, is the
Monroney sticker price plus the suggested retail
price of dealer-installed options, such as additional dealer mark-up
(ADM) of additional dealer profit (ADP), dealer
preparation, and undercoating.
Financing Your New Car
If you decide to finance your car, you have the option of checking the
dealer's rate against banks, credit unions,
savings and loans institutions, and other loan companies. Because interest
rates vary, shop around for the best deal and
compare the annual percentage rates (APR). Sometimes, dealers offer very
low financing rates for
specific cars or models, but may not be willing to negotiate on the price
of these cars. In addition, they may require you to
make a large downpayment to qualify for these special interest rates.
With these conditions, you may find that it is sometimes
more affordable to pay higher financing charges on a car thatis lower
in price or to purchase a car that requires a smaller
#1 Check Your Credit Report
#2 Use leasing saving calculator
Lease or Finance institutions:
Some dealers and lenders may ask you to
insurance, which pays off your loan if you should die or become disabled.
Before you add this cost, you may want to
consider the benefits available from existing policies you may have.
Remember, buying credit insurance is not required for a
Trading in Your Old Car
After getting your new car for the best possible price, only then discuss
the possibility of a trade-in. First,
however, find out the value of your old car. Buy Kelley
Blue Book for the up-to-date value. This information may help
get a better overall price from the dealer. Remember, too, that though
it may take longer, you generally will get more money
by selling the car yourself.
Considering a Service Contract
Service contracts that you may buy with a new car provide for the repair
of certain specified parts or problems. These
contracts are offered by manufacturers, dealers, or independent companies
and usually initially run concurrently with the
manufacturer's warranty. Remember: a warranty is included in the price
of the car; a service contract costs extra.
Before deciding to purchase a service contract, read it carefully and
consider some of the following questions:
* What is the difference between the coverage under the warranty and
the coverage under the service contract?
* What repairs are covered?
* Who pays for the labor? The parts?
* Who performs the repairs? Can repairs be made elsewhere?
* How long does the service contract last?
* What is the cancellation and refund policy?
Warranty Direct Extended Warranty
For Further Information
In addition to checking publications about new car features and prices
when buying a car, you may find it helpful
to read other Federal Trade Commission brochures. These include: "Car
Ads: Low Interest Loans and Other Offers,"
"Service Contracts," "Warranties," "Buying a
Used Car," and "A Consumer Guide to Vehicle Leasing." For
a free copy write:
Federal Trade Commission,
Washington, D.C. 20580.
For further information, you may want to write to:
Division of Marketing Practices,
Federal Trade Commission,
Washington, D.C. 20580.
Although the FTC generally does not intervene in individual consumer
disputes, it can take action if there. is evidence of a
pattern of deceptive or unfair practices.
Checklist for Buying a New Car
You are likely to get a better deal on a car if you know beforehand exactly
what you are looking for and what you are
willing to spend. Therefore, before signing a sales contract with a car
dealer, you may want to:
* Decide which car model and specific options you want.
* Find out the invoice price (the lowest price)of the model and each
option you want.
* Decide how much you are willing to pay the dealer, if anything, above
the invoice price.
* Compare final sales prices with other dealers and buying services.
* Compare financing costs from various sources, such as credit unions
and savings and loans institutions, with
those of car dealers.
* Find out the value of your old car, independent of a dealer's trade-in
* Decide if you need an optional service contract or credit insurance.
Worksheet for Buying a New Car
To help you negotiate the price of your next new car, you may want to
use this worksheet to establish your bargaining
room before you talk with a dealer.
Base Price Invoice Price* Retail Price
Transmission: ______________ ____________
Automatic ______________ ____________
Stick ______________ ____________
Air Conditioning ______________ ____________
Engine: ______________ ____________
Size ______________ ____________
Diesel ______________ ____________
Sound System: ______________ ____________
AM-FM ______________ ____________
AM-FM Cassette ______________ ____________
Power Brakes ______________ ____________
Power Steering ______________ ____________
Power Locks ______________ ____________
Power Seats ______________ ____________
Rear Window Wiper/Washer ______________ ____________
Rear Window Defogger ______________ ____________
Luggage Rack ______________ ____________
Tires: ______________ ____________
Full-Size Spare ______________ ____________
Steel Belted Radials ______________ ____________
Mirrors: ______________ ____________
Dual ______________ ____________
Remote ______________ ____________
Passenger Visor ______________ ____________
Other: ______________ ____________
* The invoice price may be obtained by looking at the dealer's invoice
or by reviewing new car publications.
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