New Car Shopping Tips Part 2

You can do several things to ensure you get the best value possible when shopping for a new car. If you have a good relationship with a dealer, you’re in great shape. Otherwise, here are some tips:

Determine a Fair Price
First determine the fair price. Edmunds and FightingChance are both resources for finding this information. And furthermore, we've tracked down a spreadsheet to help determine what you want at the price you can afford. Click here.

Use The Competition
After finding the fair price, fill out a free quote request from the following: InvoiceDealers, Cars.com, Yahoo!Autos, Autos.com, Edmunds.com, MyRide.com and CarsDirect.
You'll shortly be contacted by the internet sales manager. Tell them up front that you are working with multiple dealers. Give them the details on the car you are looking to purchase, and ask them to give you a bottom line price including all dealer fees. At this point, tell the dealer that you will not be trading in a car. If the subject of financing or special financing deals come up, tell them you will deal with this later and are only interested in the price of the car, not what your monthly payment will be.

Get Your Financing In Check
Before anything, you need to find out your credit score by going to Equifax, Experian, or TransUnion. This determines your APR.
The dealership is not the only place where you can get new car financing! Try online lenders Up2Drive and FirstAgain.com. No credit or poor credit? Try AutoCreditFinders

Find Your Trade-In Value
Use Kelley Blue Book or NADA to find out your private resale or trade in value. You should determine what will work best for you.

Let The Negotiations Begin
The key to getting an accurate offer from the dealer is to request that they give you the out-the-door cash price excluding rebates, incentives or trade-in's. The price should include all dealer added fees. At the beginning, don't let them use your trade-in or financing as part of the negotiation.

Tell the dealer that you will be paying cash and you will be selling your existing car on your own. Get the starting price from each dealer that you have made contact with. Then, take the lowest price and contact each of the other dealers. Tell them, another dealer offered me $XXXX.XX and ask if they can beat it. After round 2, take the lowest offer and repeat. At some point, they will stop going lower. You can tell that it is a fair price, by using the free "offer" spreadsheet, as well as forcing the dealers to compete against each other. Once the dealers have stopped lowering the price, contact the dealer which gave you the lowest price and say you would like to purchase the vehicle.

Now is the time to negotiate your trade-in value (unless you decided to sell it on your own). If the dealer doesn't offer you something close to the Kelly Blue Book price threaten to walk. Once you have agreed upon a fair trade-in value or decide to sell it yourself, you are ready to negotiate your financing.

NEVER NEGOTIATE BASED ON MONTHLY PAYMENT
Only negotiate based on the interest rate of the loan. There are many “games” the dealer can play with loan term and down payments amount. By this point you should have your quote from Up2Drive or FirstAgain.com. Tell the dealer what rate they have offered you and ask if they can beat it. There is a good chance they will say "we can't beat the rate but if you finance with us you can get a $1500 rebate.” You have to be very careful here. Sometimes it is better to take the lower rate instead of the higher rate with the rebate. Use the spreadsheet, to figure out which is better. If the dealer offers you better financing, by all means, take it. If the Up2Drive deal is better, follow the instructions to use the check that you should have in hand to complete the transaction. Some dealers will try and scare you away from using Up2Drive by saying their checks bounce and they won't take it. This is not true. Tell them either they can take the check or you will find another dealer that will.


HUGE thanks to Jeff's CarBuyingTips.com