10 Steps to Buying a New Car

10 Steps to Buying a New Car

Introduction

The following steps will tell you how to locate, price and negotiate to buy the car you want. If you still don't know what car to buy, read 10 Steps to Finding the Right Car for You and then come back after you have decided.


Step 1: Starting out.

These steps will help you to locate the specific car you want, and at a price that is fair to both you and the dealer. By now, you should have done plenty of research to determine which is the best car to suit your needs. And, you should have a good idea of what to pay for the car you want. Now you need to narrow the research even more. You will soon be finding the exact car you want to buy — with the options you have chosen — and then you will be determining a target price to pay. If you have done your homework, this will be a fairly easy process with no unexpected surprises.

Buying a car is a big investment, but it can be exciting and rewarding, especially if you feel like you got the right car at a fair price.

Step 2: Using incentives and rebates.

Today's new car market is crowded and competitive. Many new cars are offered for sale with attractive incentives to make you choose a particular model. In some cases, the cars with the best incentives are those that aren't selling very well on their own.

An incentive is anything that gives you an added reason to buy a particular car. Often, however, it comes in the form of a cash rebate or low-interest financing. A car might be selling for $22,000 but the manufacturer is offering $3,000 in customer cash for a final price of $19,000. In another example, a $22,000 car financed for five years at six percent would have a monthly payment of about $550. But with zero-percent financing, the payment is roughly $480. That's a huge savings to you.

Check the web sites for the latest incentives and rebates available for the car you want to buy. You can also watch for TV and newspaper promotions but, remember, the incentives don't apply to all models and are not offered in all regions of the country. Furthermore, your credit must be very good to get the low-interest financing. And finally, keep in mind that there are some hidden incentives paid directly to dealers to push certain cars.

Research what incentives, if any, are offered for the car you want to buy. Print out this information and keep it in your car-buying folder as you move to the next step.

Step 3: Pricing the car.

Car salesmen will usually point to a car's "sticker price" as the amount you have to pay. However, the price the dealership is willing to sell a car for is often well below the sticker price. Reseach actual price on web sites.

Step 4: Finding the exact car you want to buy.

You should now have a very specific idea of the car you want to buy. This means you know the make, model, trim level, options and color. The more flexible you can be about these specifics, the wider the range of the cars you'll find available for sale. Ultimately, the ability to consider several versions of the same model can give you additional bargaining power. For example, a shopper might be very firm about the make, model and trim level, but could accept a variety of options and colors. If you're a shopper who definitely wants hard-to-find options and a specific color, it will be more difficult to make a great deal. Why? You have no leverage as a negotiator. You have to pay the dealer's price or try to locate another identical vehicle. Obviously, if you do find the exact car you're looking for, there's no need to volunteer this information to the dealership.

In any case, locate the exact car you want by sending e-mails to the Internet managers of dealers in your area. Yyou can simultaneously solicit quotes from multiple dealers. In many cases, you will have to follow up with a phone call. Say something like: "I'm looking for a 2003 Matsura Accell. I'm not too fussy about the color but I don't want black or white. I want ABS and side airbags. What do you have on your lot?" Often the salesperson will have to check his inventory and call you back. After a few phone calls you will have a good idea of how widely available the car is. If there are several dealerships offering the same car, you will be in a better position to make a good deal.

As you make phone calls and exchange e-mails, take careful notes. You should record information about each car you locate, including the color, options, and the dealership name. This will save time as you continue through the shopping process.

Step 5: Test driving the car salesman.

As you call dealerships to locate the exact car you want to buy, you can also test drive the car salesman. In other words, you can determine if this is a person you want to do business with. It's a good idea to consider this issue ahead of time, before you get to the deal-making phase of the process.

The first way to evaluate a good salesperson is to ask yourself if you feel comfortable dealing with them. Are they impatient and pushy? Or are they relaxed and open? If you asked them about a specific car's availability, did they respond to your needs? Or did they try to steer you toward another car simply because they have too many of that model in stock? Do they return your phone calls? Do they answer your questions in a straightforward manner? Or are they evasive and confusing?

By considering these issues you should have a sense of whether or not you want to buy from this salesperson. If you feel comfortable with the individual when researching by phone, and if the dealership does indeed have the car you're interested in, set up a time to test drive the car, preferably when the dealership will not be very busy, such as a weekday morning. Before heading to the car lot, review all your notes and make sure you bring your car-buying folder. This might include your checkbook, registration and proof of insurance. Keep in mind that you're bringing these items so you'll be ready to buy a car if you get a fair deal. Don't feel obligated to purchase a car simply because you have all the necessary paperwork with you or because you test drove the car.

Step 6: If you are trading in your old car...

If you are trading in your old car to a dealer, you will probably not get as much money toward the price of a new car as you would have if you'd sold it yourself to a private party. However, trading in offers some advantages. You can solve all of your car-buying problems in one visit to the dealer. You can unload a hard-to-sell car with no newspaper ads, DMV lines or tire-kicking buyers involved. In some states, you will even pay less sales tax on a deal that involves a trade-in.

Begin the process by looking up your car's trade-in value on Free Trade-in Value. After you plug in all of the vehicle's information (mileage, options, condition and colors) you will get a specific trade-in price. This will often be slightly different from the offers you get once you are on the car lot. At a dealership the value assigned to your trade-in varies based on the time of the month, the dealer's specific inventory and the used car manager's mood.


If it's important to you to get the maximum value for your trade-in, you should visit several dealerships and solicit bids. Tell the salesperson that the sale of a new car will be contingent on the amount he or she will give you for your trade-in. Also, tell them you are visiting several dealerships. With a little legwork, you may be able to boost the price you get for your old car by several hundred dollars or more. Remember, the extra effort you spend in getting competitive bids is far less than what it would take to advertise, show and sell the car yourself.


Step 7: Negotiating for your lowest price.



Many buyers like to handle the question of price before they even go to the dealer. Internet salespeople are willing to discuss price over the phone — even by e-mail. This wasn't the case a few years ago when the salesperson wanted you in his office before he would get down to brass tacks and talk price.


It's quite possible that, in your calls to various Internet departments, the selling price of the car has already come up. Often Internet salespeople will volunteer the selling price of their car since they know this is the make-or-break factor in most buyers' decision making process. If the price they've quoted is at or below Trade-In-Value, then you are already in the right range to buy the car. If you want to try to improve the deal, you have a few options.


Everyone has their own idea of what makes a good deal, but most people just want to know they got a fair price. Here, Trade-In-Value will be your best guide. If you want to try for a rock-bottom price, start by getting bids from three local dealers. Follow this up by taking the lowest price, calling the two other dealerships and saying, "I've been offered this car at this price. If you beat it I'll buy it from you." They almost certainly will. However, keep in mind that you can't play this game forever. Eventually, they will give you a take-it-or-leave-it price. For more on getting the best price, read Negotiating 101.


Also, be warned that if you ask the dealer to cut his profit, he might try to take it back somewhere else. Remember, a good deal isn't just the lowest selling price. It's the lowest total out-the-door cost on a car that meets your needs. This means that to ensure you get a fair deal you have to be vigilant throughout the entire purchase process, even after you and the salesman agree on a price.


Step 8: Closing the deal.



If you feel good about the price you have been quoted, it's time to take a look at the big picture. Many buyers focus on the cost of the car and ignore the related expenses. Besides the cost, you will have to pay sales tax and various fees which vary from state to state.


The simplest way to estimate total cost is to ask the salesperson to fax you a worksheet and invoice before you go to the dealership. This way, you'll be able to review the figures in a relaxed environment.


Step 9: Reviewing and signing the paperwork.



At the dealership, you will be presented with the contract for your new car and a dizzying array of forms to sign. This might be done by the Internet salesperson you have been dealing with, or it could be done in a separate office by the finance and insurance (F&I) manager. If this happens, the F&I manager might try to sell you additional items such as extended service contracts, fabric protection, alarms or a LoJack vehicle locator. In most cases, we recommend turning down these extras — with the possible exception of the extended warranty, which provides peace of mind to some buyers. Additionally, it is worth noting that some states allow up to 60 days after purchase to cancel an extended warranty, but you should check local laws to confirm your options in your area.


To prepare yourself for the kinds of products that might be pushed on you, or inserted into the price without your knowledge, read High-Priced Dealer Add-ons.


If you have already seen a worksheet for the deal you've made, the contract should be a formality. Make sure the numbers match the worksheet and no additional charges or fees have been inserted. You will also be asked to sign various forms that register your new car and transfer ownership of your trade-in. Understand what you are signing and what it means. Ask questions if you don't understand, and don't ever feel like you have to hurry. Buying a car is a serious commitment and it's the F&I manager's job to ensure you are comfortable with every document involved. Remember, once you have signed there is no going back.


Step 10: Inspecting and taking possession of your new car.



Most dealerships detail the car and provide a full tank of gas. You will have one more chance to inspect the car before you take possession of it. Make sure you walk around the car and look for scratches in the paint and wheels or dents and dings on the body. If you are paying for floor mats make sure they are included. If anything is missing, or if any work needs to be done, ask for a "Due Bill" that puts it in writing. You will then be able to come back and get the work done later.


As you drive away inhaling that new-car smell, there is only one more thing to be done: enjoy your new car.

links

Data Recovery
File Recovery
Outlook Repair
Company-List Business Directory
Computer Directory
Hard Drive Recovery
Finance Directory
RAID Recovery
Used Dodge
List Nation
Internet Privacy
Internet Marketing
Shopping Directory
Bad Credit
Undelete
Free Web Hosting
Used Cars
Zip Codes
Data Recovery
Automotive News
Renovations
Directory organized by subject, including Education and Training.
Free Submit Links Directory
Anewdir Web Directory
Allthelook web directory

10 Steps to Finding the Right Car for You

10 Steps to Finding the Right Car for You

Introduction

The following steps are devoted to helping you select, price, locate and test drive the vehicle that is best for you. After reading and completing these steps you will be ready to move on to the 10 Steps to buying or leasing a new car.

Step 1: What kind of car do you need?

If you examine your needs rather than wants, you will quickly discover what the right car is for you. Take a moment to think about what you use your car for. How many people do you need to transport? What kind of driving do you most often do? How long is your commute? Is it important that your next vehicle get good gas mileage?

In too many cases people choose a car because it has an eye-catching style or it is a trendy favorite. If you go in this direction, you may either break your budget or have to go car shopping again soon. Let your needs, not your wants, drive your decision.

Here are a few other questions to keep in mind when you begin your car-buying process:

Do you want a manual or automatic transmission?

Do you really need four-wheel drive? Or all-wheel drive?

What safety features do you want?

Do you require a lot of cargo-carrying capacity?

Will you be doing any towing?

Will the car easily fit in your garage or parking area?

Step 2: How much can you afford?

Regardless of whether you decide to buy or lease your next car, establishing a realistic monthly payment that will fit into your budget is a crucial first step. How much should this be?

A rule of thumb is your total monthly car payments — whether you own one car or more than one — shouldn't exceed 20 percent of your monthly take-home pay.

Check "Financial Calculators" to help you estimate what your monthly payment will be based on purchase price, down payment, interest rate and length of loan. Take the time to run the numbers now, before you go car shopping, print out the result and put this information into your car-buying folder. It will not only show you what you can afford, it will also help you control the numbers when you negotiate with a car salesman.

Step 3: Should you lease or buy your next car?

A lease requires little or no money up front and offers lower monthly payments. But when the lease ends you are left without a car and a need to replace it.

Buying a car is more expensive initially and the monthly payments are higher. But at the end of the loan, you will own a car you can still drive or sell.

Other key factors that differentiate leasing and buying include:

Advantages of Leasing


  • You can drive a better car for less money

  • You can drive a new car every few years

  • No trade-in hassles at the end of the leas

Advantages of Buying


  • When interest rates are low, it makes more financial sense to own a car rather than lease it
  • No mileage penalty
  • Increased flexibility — you can sell the car whenever you want

If you are still unsure whether to lease or buy, try letting the numbers help you make the right decision. Go to this "Decision Calculator" and see how much leasing or buying will cost for the same car.

Step 4: Have you considered all vehicles in that class?

Today's new car (and truck) market is filled with great products. Most shoppers have difficulty keeping up with all of the vehicles manufacturers introduce and the changes they are making to their older vehicles, so it's important to do your research. Use Internet sites like Edmunds.com and Edmunds.com New Cars and Trucks Buyer's Guide to research all your choices before you hit the showrooms.

If you already have a car you are considering, this will be your starting point. Find the specific car you want on the web site by searching by Make, Type, Price Range or Market Segment. Once you have chosen your specific car, you will be on a Vehicle Detail page. This page has links to all the Car Pricing, Features, Reviews and Shopping options. Down the left hand side of the Vehicle Detail page there is a section called "Find a Related Vehicle" all of the links in this section help you to locate similar and competitive vehicles.

If, on the other hand, you have no idea where to begin you should might want to consult the Best Cars section of the site, or you can begin by searching by Make, Type, Price Range or Market Segment.

Step 5: Have you considered all of the costs of ownership?

Here is an often overlooked fact of car ownership: one car might be cheaper to buy, but more expensive to own. Why? Even if two cars cost about the same to buy, one can depreciate at a different rate or cost significantly more to insure or maintain. Before you commit to one car, you should estimate the long-term ownership costs of the vehicle you are considering. These include depreciation, insurance, maintenance and fuel costs. The Edmunds.com Web site has a feature called Cost to Own, which presents this information in an easy-to-read table.

Another tool you should use is Edmunds.com's True Market Value (TMV®) pricing. By following the prompts you can find out what a fair price is for the car you are considering. The TMV price is the average price other buyers are paying for the same car in your area. TMV represents a good price for you and a fair price for the dealer.

By using TMV and TCO, you can make a smart decision up front and then save hundreds of dollars over the life of the car.

Step 6: Research options.

By completing steps one through five, you should now have a good idea about what car will work for you. Maybe there are a few cars that fit your criteria. It's time to narrow it down.

Car buyers have been trained to visit local dealerships to find the car they want. In the Internet age, this is a waste of time and money. You can quickly cover more ground by shopping on-line. Car dealers are waking up to this new breed of shopper and have created Internet departments within their dealerships to serve the educated buyer who already knows what he wants and what he's willing to pay. The only thing you have to do in person are test drive the car and sign the contract. And in some cases, you can even have the car "delivered" to you by the salesperson.

Step 7: Schedule an appointment for a test drive.

It's a good idea to make your initial contact with a dealership by phone before going there in person. This can give you some sense of the business atmosphere you will be dealing with throughout the buying or leasing process. Additionally, if you can establish a rapport with the Internet salesperson, it can boost your confidence before you visit the lot. Call the Internet department (sometimes also called the fleet department) and ask if the car you're looking for — in the right color and trim level — is actually on the lot.

You make your initial contact with the Internet manager either with an e-mail message or over the telephone. You can also send multiple dealer requests and narrow your search based on the tone of e-mail responses. If you called the Internet department, tell the salesperson that you want to set up a test drive — but that you won't be buying right away. However, assure them that you will buy there if you decide to purchase this particular make and model, and if they can offer the vehicle at a fair price.

Keep in mind that if you deal with the standard salesperson, he or she will try to start the negotiations at a high price with the expectation of being negotiated down. However, the Internet manager will often quote you a "rock-bottom" price as soon as negotiations begin. A few minutes taken to set up an appointment with the Internet manager can save you both time and money.

Step 8: How to test drive a car.

The goal of a test drive is to experience — as closely as possible — the same type of driving conditions the car will be used for after purchase. If you commute, drive the car in both stop-and-go traffic and at freeway speeds. If you frequently drive into the mountains, try to find some steep grades to climb. Drive over bumps, take tight corners at aggressive (but not dangerous) speeds and test the brakes in a safe location, such as a deserted parking lot. Get in and out of the car several times and be sure to sit in the backseat, especially if you plan on carrying passengers. In short, ask yourself what it will be like to live with this car for a number of years.

While you are evaluating the car, don't be distracted by the salesperson's pitch. Don't drive with the radio on — you can evaluate that later. A new car is a big investment; make sure you spend enough time really looking at it. And then, consider one last thing: your intuition. If you are uneasy about this car, follow your instincts. A vehicle purchase decision is too important (and expensive) to undertake without total confidence.

Step 9: After the test drive.

After the test drive, you should leave the car lot. Why? Because you will probably need to drive other types of cars at other dealerships. It's a good idea to do all of your test driving in one morning or afternoon. Driving the cars back to back will help you uncover even minor differences, which will lead to a more educated purchase decision.

So, how do you get out of the clutches of the salesperson? Generally, Internet salespeople are pretty mellow and won't pressure you to buy on the spot. Besides, you can remind them you still have other cars to drive and you can't make a decision yet. Most good salespeople will respect that. If they don't, you probably won't be coming back to make a deal with them anyway.

Step 10: Getting ready for the buying cycle.

At this point you should have considered all the cars in the class that interest you. You should have a good idea what you can afford. You should know if you want to buy or lease your next car. You should have test driven your top choices.

Now it's time to narrow your choices down to one car and make a deal. If you plan on leasing, read the "10 Steps to Leasing a New Car." If you are going to buy your next car, read "10 Steps to Buying a New Car." In either case, take a moment to congratulate yourself. You have done your homework to find the right car for you. Now you can move forward with confidence.

10 Steps to Buying a Used Car

The following steps will tell you how to locate, price and negotiate to buy the used car you want. If you still don't know what car to buy, read 10 Steps to Finding the Right Car for You and then come back after you have decided.

Step 1: Starting out.

If you've decided to buy a used car, you've already made a smart decision. You can get a car that's almost as good as a brand-new one, without suffering the depreciation that wallops new car buyers as soon as they drive the car off the lot. Used cars — even those that are only one year old — are 20 to 30 percent cheaper than new cars. But there are other good reasons to buy a used car:

  • Buying a used car means you can afford a model with more luxury/performance.
  • You'll save money on insurance.
  • The glut of cars coming off lease makes finding a near-new vehicle, or "cream puff," easy.
  • Bigger bargains are possible for the smart used car shopper.

Furthermore, the classic reasons to avoid used cars — lack of reliability and the expense of repairs — are less of an issue. Consider these related thoughts:

  • Used cars are more reliable today than ever before.
  • Some used cars are still under the factory warranty.
  • Most new carmakers now sell certified used cars, which include warranties.
  • The history of a used car can easily be traced using the VIN number.
  • Financing rates for used cars have dropped in recent years.
  • If you buy from a private party, the negotiation process is less stressful.

True, you can't be the first one on the block with the trendiest vehicle. But your consolation will come with the knowledge that you got a great deal and made a smart financial decision. So read on, as we guide you along the road to used car happiness.

Step 2: Locating the right used car.

At the beginning of the car-buying process, many people already have in mind the car they want. But it's a good idea to stop right now and ask yourself: Will this car fit into my monthly budget? We'll explain how to determine what car you can afford in the next step. For now, make sure your choice isn't obviously exceeding your budget. Does it meet my current driving needs? For more on this subject, refer to 10 Steps to Finding the Right Car.It's possible that you need to expand your horizons when considering what to buy. You might want to think of other vehicles in the same class. For example, if you are considering a Toyota Camry you should also look at the Honda Accord, Nissan Altima, or Mitsubishi Galant. These cars were built for the same market, but they often have different features at lower prices.

Step 3: Used car bargains

The cost of a used car is based on its condition, mileage, reliability, performance and popularity. Of course, you want a car that is reliable and performs well. But do you want the same used car everyone else wants? If so, you will pay a premium for it. In some cases, the only difference is the nameplate.How much difference in price separates good-but-popular cars from the good-but-overlooked counterparts? Two Edmunds.com editors recently shopped in the family sedan class. They found that two-year-old Camrys and Accords were about $3,000 more than comparable 626s and Galants. For more on this subject read "How to Get a Used Car Bargain." If you are adventurous and want to shop for a killer deal, read "Used Car Grab Bag."

Step 4: Research your prospective used car.


You will find all the information you need to make an informed decision about what to buy on the Edmunds.com used car pages. The major topics are accessed by clicking the links to the left of the screen that list such information as: prices, standard features, specs and safety, warranties, consumer discussions, photos and video and resale values. A helpful feature is "Car Ratings" which includes a bar graph representing consumer satisfaction with this vehicle. You can also read reviews of the car by current owners.Another essential part of the used car pages is "Price With Options." Edmunds.com has developed a True Market Value (TMV®) pricing system to act as a guideline when car shopping. By clicking a bar labeled "Customized Appraisal" you can price a used car more accurately. This figure is based upon thousands of similar sales across the country. We will go into more detail about how to use Edmunds.com's TMV later.One last vital step to getting a great used car deal: you have to run a vehicle history report on any used car you are considering buying. Several companies sell these reports, which are based on the vehicle identification number (VIN), but Carfax seems to be the most comprehensive. You will find out the vital information about the used car including whether or not it has a salvage title (it has been declared a total loss by the insurance company) or evidence to reveal if the odometer has been rolled back. This is also the time to decide if you want a Certified Used Car. If you do, see our story that describes the certified used vehicle programs offered by each manufacturer.

Step 5: How much can you afford?

The smart shopper will consider how to finance the car at the beginning of the shopping process. This will avoid unpleasant surprises later in the game and help you make an unemotional decision that fits your budget.You will need to estimate three figures that will guide you as you go shopping:Monthly payment. If you are going to take out a loan, how much can you afford to pay each month?Down payment. How much cash can you put down to reduce your monthly payments?Purchase price of the car. Answering the first two questions will help you determine a realistic price range for your used car.Once you've determined how much you can spend for a down payment, a monthly payment and the purchase price of the car, print out these figures. Later, in the heat of the moment, when you are negotiating for a used car, you might need to check the card to bring yourself back to earth.

Step 6: Set up financing for your used car.

You have three ways to pay for your used car:Cash. Need we say more? Money talks — you-know-what walks.Financing through a bank, on-line lender or credit union. We highly recommend this route because it will usually save money and give the consumer the most control over the transaction.Financing through the dealer. This can work for some people depending on their credit scores and the current interest rates offered. Also, by prearranging financing through an independent source, the dealer may sometimes offer to beat the rate with a low-interest loan.Financing through an independent source (on-line lender, bank or credit union) offers several advantages:
  • Keeps negotiations simple in the dealership
  • Allows you to shop competitive interest rates ahead of time
  • Removes dependency on dealership financing
  • Encourages you to stick to your budgeted amount
  • Low interest loans can be arranged online through E-LOAN
Step 7: Used car markets.

The three most common places to buy a used car are:
  • Private parties
  • New car dealerships
  • Used car lots
Of these sources, private parties usually have the most reasonable prices. It is also a more relaxed transaction to buy a used car from a private party rather than to face a salesman at a dealership.Still, there are advantages to buying a used car from a new car dealership. Many used cars, on new car lots, are trade-ins. Dealerships usually get these cars at rock-bottom prices. If you make a low offer — but one that gives them some profit — you just might get a great deal. Furthermore, many dealerships offer certified used cars that have been thoroughly inspected and are backed by attractive warranties. Search for your car by using Internet sites such as our Used Vehicle Listings or the on-line classifieds of your local newspaper. Some sites are very flexible and allow you to search specific criteria such as make, model, options and price range. In some cases you can search the used car inventory of new car dealerships through their Web site.While the Internet is an amazing resource, you should still try the conventional sources. Ask friends and relatives if they are selling a used car. Keep your eyes peeled for cars with "For Sale" signs in the window. Scan the bulletin boards at supermarkets or in local schools and colleges. Finally, don't forget old faithful — the newspaper classifieds, particularly on Saturday and Sunday.A lot of time can be saved by calling the party selling the car before you go to see the vehicle. In this way, you can eliminate cars that have problems such as excessive mileage or a salvage title. Verify the asking price in the ad.After talking to the seller, set up an appointment for a test drive. If possible, make this appointment during the day so you can more accurately determine the car's condition. Also, ask for the VIN number so you can run a Carfax report. At the beginning of your used car-buying process you should sign up with Carfax to get its 30 day unlimited car reports service. Every time you get a line on a used car, run the VIN. This will tell you if the car is clean.

Step 8: Test driving a used car.

Used car shopping will involve inspecting the vehicle to determine its condition. This process is simplified if you buy a certified used car that has passed a thorough inspection and is backed by a manufacturer's warranty. But while buying a certified used car removes a lot of the guesswork about the vehicle's mechanical condition, you pay for this service.Most new cars are sold with a three-year/36,000-mile warranty. Therefore, if you buy a car that is from one to three years old, with less than 36,000 miles on the odometer, it will still be under the factory warranty. If anything goes wrong with the car you just bought, the problem will be fixed for free. (Warranties vary from one manufacturer to the next. Always read the restrictions of the warranty before buying the car.)If you are serious about buying a used car but have doubts about its condition, take it to a mechanic you trust. A private party will probably allow you to do this without much resistance. But at a dealership, it might be more difficult. If it is a certified used car, there is no reason to take it to a mechanic.Once you get behind the wheel, your first impression will be the way the car feels when you sit in it. Is it a good fit? Does it offer enough headroom? Legroom? Are the gauges and controls conveniently positioned?Try to arrange your test drive so that you start the engine when it is completely cold. Some cars are harder to start when they are dead cold and, when doing so, will reveal chronic problems. Turn off the radio before you begin driving — you want to hear the engine and concentrate on the driving experience.

On the test drive, evaluate these additional points:
  • Acceleration from a stop
  • Visibility (Check for blind spots)
  • Engine noise
  • Passing acceleration (Does it downshift quickly and smoothly?)
  • Hill-climbing power
  • Braking
  • Cornering
  • Suspension (How does it ride?)
  • Rattles and squeaks
  • Cargo space
On the test drive, take your time and be sure to simulate the conditions of your normal driving patterns. If you do a lot of highway driving, be sure to go on the highway and take the car up to 65 mph. If you go into the mountains, test the car on a steep slope. You don't want to find out — after you've bought the car — that it doesn't perform as needed.After the test drive, ask the owner if you can see the service records and if receipts are available. If so, note whether the car has had oil changes at regular intervals (at every 5,000 to 7,500 miles). Be cautious of buying a car that has had major repairs such as transmission rebuilds, valve jobs or engine overhauls.

Step 9: Negotiating for a used car.

Whether you are buying a used car from a dealer or a private party, let them know you have the cash in hand (or financing arranged) to make a deal on the spot. Preface your offer with a statement like, "I'm ready to make a deal now. I can give you cash (or a cashier's check) now. But we need to talk about the price."At this point, you need to have a persuasive argument about why the price is too high. So let's talk about pricing. The foundation of successful negotiation is information. This is particularly true when buying a used car. And yet, the condition of used cars means prices will vary widely.Edmunds.com has removed much of the guesswork in used car pricing by developing True Market Value pricing. After you have gathered information about a car you are considering, look it up on the Edmunds.com used car pages. When you're finished, print out the three TMV prices: Trade-In, Private Party and Dealer Retail.Dealers have lots of experience negotiating. Most private parties do not. Therefore, buying a used car from a dealer or a private party will be two very different experiences. But there is one overriding similarity — they both want to sell the car. In fact, the incentive to sell the car might be greater to the dealer than to the private party owner.You should, however, follow these guidelines when negotiating:
  • Only enter into negotiations with a salesperson you feel comfortable with
  • Make an opening offer that is low, but in the ballpark
  • Decide ahead of time how high you will go and leave when your limit's reached
  • Walk out — this is your strongest negotiating tool
  • Be patient — plan to spend an hour or more negotiating
  • Leave the dealership if you get tired or hungry
  • Don't be distracted by pitches for related items such as extended warranties or anti-theft devices
  • Expect a "closer" (another salesman you've haven't previously dealt with) to try to improve the deal before you reach a final price

Once you have a deal, you need to make sure the transaction is completed properly. The next section, which is the final step, will tell you what to expect and what you need to do.

Step 10: Closing the deal.

If you are at a dealership, you still have to go through the finance and insurance (F&I) process. If you are buying a car from a private party, you have to make sure that payment is made and the title and registration are properly transferred.In both cases, you also need to make sure you have insurance for the car you just bought before you drive it away. Also, the F&I person will probably try to sell you a number of additional items: an extended warranty, alarms or anti-theft services such as LoJack, prepaid service plans, fabric protection, rust proofing and emergency roadside kits. Some people swear by extended warranties, so this is something you might want to consider (unless your used car is certified or still under the manufacturer's warranty). However, the other items typically sold in the F&I room are expensive and hold little value for you.The F&I person may seem like a financial advisor, but he or she is really an experienced salesperson. Some F&I people can become very persistent trying to sell these items. Be firm. Say, "I'm not interested in any aftermarket extras, thank you. I just want the car."Once the contract is ready, review it thoroughly. In most states, it will contain the cost of the vehicle, a documentation fee, a smog fee, a small charge for a smog certificate, sales tax and license fees (also known as DMV fees). Make sure you understand the charges and question the appearance of any significant, sudden additions to the contract.Finally, you should inspect the car before you take possession of it. If any repair work is required, and has been promised by the dealer, get it in writing in a "Due Bill." Make sure the temporary registration has been put in the proper place and — you're finally on your way.When you buy a car from a private party, you will probably be asked to pay with a cashier's check or in cash. But before money changes hands, request the title (sometimes called the "pink slip") and have it signed over to you. Rules governing vehicle registration and licensing vary from state to state. Check with the DMV in your state (much of this information is now available on DMV Web sites).Once all of the paperwork is complete, it is finally time to relax and begin enjoying your new purchase: a good used car.
Checklist
  • Choose the right vehicle for you by making sure the car suits your needs.
  • Consider all cars in the class you have chosen (compact sedan, SUV, station wagon, etc.) .
  • Look up the car on Edmunds.com and check its reliability and consumer reviews.
  • Decide how much you have to spend on your new car purchase: down payment, monthly payment and purchase price.
  • Decide how you are going to finance your car. If you are going through a bank, on-line lender or credit union, obtain loan approval before you start shopping.
  • Using the Internet, and Edmunds Used Vehicle Listings, search for the used car you've decided to buy.
  • Call the seller and verify the pertinent information. Get the VIN. Run a Carfax report on the car.
  • Test drive the car under your normal driving conditions. Take the car to a mechanic if it is not certified by the manufacturer or covered by a comprehensive warranty.
  • Negotiate your best deal.
  • Read the contract carefully before signing and always make sure you get a clean title.
  • If you are financing the car, use the payment calculators to determine the monthly payment for the car you want to buy.
  • If you are trading in your old car, check its Edmunds.com True Market Value and print out this information.
  • Once you've reached a good price, ask the salesperson to fax you a worksheet showing all the prices, taxes and fees.
  • Bring your worksheet with you to the dealership so you can compare these numbers to the figures on the contract.
  • Inspect the car for dents, dings and scratches before taking final delivery.
Original of article here

How to Get a Used Car Bargain Part1

Part One: Identifying Your Target Cars & Arranging Financing


By Philip Reed, Senior Consumer Advice Editor and John DiPietro


Edmunds Editors Philip Reed and John DiPietro recently shopped for the best used family sedan they could buy in the $11,000 to $13,000 range. Their findings were the basis for this three part series.

When you go car shopping, the first question you are likely to run into is this: Should you buy a new or a used car?
New cars are a shock to your budget, but they will probably be trouble-free for several years.

Used cars cost less, but how can you be certain you're not buying someone else's problems?

Here at Edmunds, we spend much of our time dispensing advice on new car buying. But there is a huge used car market. In 2006, for example, an estimated 44 million used cars will be sold as compared to an estimated 17 million new cars. While the average sale price of a used car is estimated at about $13,900, the average price of a new car is estimated at roughly $27,800.

It's often said that there is a steep decline in the car's value in just the first year of the car's life — from 20 to 30 percent. In other words, that car that was worth $21,800 when it was new can be purchased only a year later for as little as $15,260. That's a savings between $4,360 and $6,540. This is proof that the consumer pays dearly for that new car smell.

You might be thinking that all of this sounds good in theory. But what's happening in the real world? Well, we decided to find out.

A Test Case

Edmunds editors Phil Reed and John DiPietro decided they would be guinea pigs in the used car buying process. Phil actually needed a car to replace the one he just sold. So he decided to get the best car he could for between $11,000 and $13,000.

True, there are new cars that could be purchased in this price range. But by buying used, Phil felt he could get "more" car for less money. By purchasing a used car, he would be able to get a loaded mid-size model instead of a new, stripped "econobox." Besides that, buying a used car that was still under factory warranty could offset much of the uncertainty of buying a used car.

In this three-part series, we're not only going to give you a system for buying used cars, we're also going to tell you how the Edmunds editors faired when putting this system to a real market test.

(You may also want to read 10 Steps to Buying a Used car)

Step 1: Identifying Your Target Cars

John has coined a term he uses to describe good cars that are often overlooked. These are not the "staples" in a given segment and thus can be bought at bargain prices: Dark Horse Cars. While this is a mixed metaphor, it describes a type of car that bargain hunters should be aware of. Dark horse cars are virtually as good as the well-known cars — most notably Toyota and Honda — but you don't have to pay for the name.

In Phil's case, he would have preferred buying a Honda Accord or a Toyota Camry. But by shopping for a Nissan Altima, a Mazda 626 or a Mitsubishi Galant, he hoped to save about 20 percent, while still getting a well-built and reliable car.

In whatever class of vehicle you are shopping for, whether it is SUVs, pickup trucks or economy cars, there are the leading brands for which you will have to pay a premium price. But if you are willing to consider the competitors, you will save yourself a bundle.

Check the "Edmunds Rating"

As you build a list of cars to consider — the dark horse cars — check the Edmunds Rating bar graphs found on the used car pages. This will show how the car is rated in the categories of safety, reliability, performance, comfort and value. The results are then combined to give an overall rating for each car.

Using this method, you should select a list of three target cars to shop for. Write down the Edmunds.com True Market Value® prices for each vehicle with the anticipated mileage. Keep in mind that cars typically have accumulated about 12,000 to 15,000 miles per year. Anything over this mileage reduces the value of the car; anything less increases the car's value. Select the option marked "Appraise this Vehicle" to generate the adjusted True Market Value prices.
In Phil's case, his target cars were all 1999 models: the Altima, the Galant and the 626. The prices of a Galant and a 626 with about 30,000 miles were about $12,200; a similarly configured Altima was about $13,300. These were the dealer retail prices listed on the TMV® pages of the Used Vehicle Appraiser. Phil printed out these pages for John and himself to take with them when they went shopping later in the process.

Step 2: Arranging Financing Before You Shop

If you can pay cash for your car, you can skip this step. If you are like most people and need to borrow money to buy a car, continue reading.

Begin this step by considering what car payment would comfortably fit into your monthly budget. Once you know this figure and how much you can put as a down payment, you will know how much you need to borrow.
  1. Take your estimated car payment and multiply it by the length of the loan (we recommend 36 or 48 month loans for used cars). For example, you want to have a $250 monthly payment: $250 X 48 = $12,000.
  2. Add to this, the amount of your down payment. For example, you have a $2,000 down payment. That would be $12,000 + $2,000 = $14,000. This is the amount of the car you can afford before interest, tax and fees.
  3. Now, compare interest rates at lending institutions for the same term loans
  4. Using our payment calculator plug in the estimated price of the car you can afford and the best interest rate
    you have found. Adjust the vehicle price, until you reach the monthly payment
    you want. In this example, with a monthly payment of $256, at 8 percent, you
    could afford to buy a $12,500 car. Keep in mind this figure does not include
    tax and fees
    , which will vary from state to state.
If you arrange financing before you go to the dealership, you are in a much stronger
position to negotiate. This important step presents a number of advantages because
it:

  • Keeps negotiations simple in the dealership
  • Allows you to shop competitive interest rates ahead of time
  • Removes dependency on dealership financing
  • Encourages you to stick to your budgeted amount
While you may sometimes be able to lease a used vehicle, most people go the more traditional route of taking out a bank loan and buying the car. In Phil's case, he decided to borrow from an online lender that takes applications over the Internet. They then call within 15 minutes to let you know if the loan is approved.

Phil had about $4,000 as a down payment, so he applied for a loan of $8,000 at 8.44 percent. True to the company's promise, a representative from PeopleFirst.com called within 15 minutes to confirm that the loan was approved. A check was express-mailed to his house the next day, a Saturday. The check could be made payable to any new car dealer and was good for 30 days. If, at the end of this period, the check wasn't used, there was no further obligation.

With financing in hand, Phil was ready to move on to the next part of the used car buying phase.

Original of article here