Important Tips to Save You Money When Buying a New Car

Next to purchasing your home, purchasing a car is one of the largest purchases you make in your lifetime. It's easy to be taken by "new car fever" and allow an aggressive salesperson or dealer to push you into a new car.

Buying a new car should take time. It should be a reasonable, well thought out process.

Before you shop determine what type of car you want and what you are willing and able to pay. Work out your financing ahead of time with your own bank, if possible. This could save you several percentage points on financing and puts more power in your hands when you visit the car lot.

Tips for Buying a New Car: Investigate

Check the internet and car magazines to learn everything you can about the car you are going to purchase. Don't depend on the dealer to speak directly about features that you consider important. Be sure you know a reasonable price for the new car you wish to buy.

Compare dealership ads in the paper. Also check online. You may be able to custom order your car online and skip the dog and pony show at a dealership. However, sometimes a car dealer is looking to liquidate cars, so you may be able to find a good deal on the lot.

One caution when shopping for deals on the lot, often the dealer will try to get you in a car they need to move off the lot. Don't be pushed into a new car decision on the spur of the moment. By the time you get to the dealership you will have done your homework.

Tips for Buying a New Car: Negotiate

Know what you are willing to pay, what you can safely finance without getting into financial trouble, and pre-qualify with your bank if possible. When you arrive at the dealership be prepared to negotiate. Every car is required by law to list the MSRP. The dealer often adds their own sticker showing perks, options, and their price.

Never pay sticker price for a car. Stand firm and negotiate. Dealers will often give 10% to 20% on their profit margin. One of the slickest tricks in the car business is to sale a car at invoice price. Invoice price is not the actual price paid by the dealership for the car. It is usually higher because of rebates, incentives, and other discounts received by the dealer.