8 Tips for Buying a New Car

Misc - New Car Savings

The good news is you’re thinking about buying a new car. The bad? You don’t even know where to begin. It always pays to comparison shop, and with so many sites dedicated to vehicle reviews, stats on reliability over time, information on the cost of vehicles over time, and even customer reviews of the dealerships, you can do your research from the comfort of your sofa.

We’ll leave it to you to decide which vehicle you should buy, but we will share a little new-car buying advice that could just save you some hard-earned dough.

1. Do Your Homework

Yes, homework is an ugly word. But the amount of savings you might forfeit by failing to do it could be even uglier. Don’t rely on car salespeople to tell you what kind of car will suit your needs – remember, they’re salespeople. There are many traditional websites, like Edmunds, Motor Trend and Car and Driver, where you can do your research. Want the same info, but with a different angle? Check out VroomGirls for expert advice from women who love cars, or TrueCar for a haggle-free experience.

Those sites will help you determine which make and model is best for you, allowing you to compare safety performance with gas consumption and overall cost. If you have your heart set on a particular model before you walk onto a lot, that may help save time at the dealership, and avoid the risk of being talked into the wrong vehicle.

2. Your Salesperson May Be Willing to Make a Deal 

Salespeople have quotas, and while selling individual cars may not make a huge dent in their pay, hitting or exceeding a sales quota will. For car salespeople, high volume is the name of the game. The advantage for you is that they don’t necessarily mind if you negotiate the price on your vehicle purchase. That’s the concern of the sales manager, who will be able to approve or decline the final amount. What does that mean for you? You’ve probably got room to negotiate.

As long as you’re not committed to buying a Tesla, which is sold directly from the manufacturer, there’s wiggle room built into nearly every vehicle’s price. Ask for the price you want to pay, and you could help the salesperson close the deal. The worst answer you’ll get is, “No.”

3. Your Salesperson Is Onto You

You’re ready to drive out in a new car. That’s what your salesperson is telling herself when you cross the threshold into the dealership. Sure, your salesperson may be willing to give you a deal, but she knows that the only reason you’re standing in a dealership is because you’re ready to write a check. For the most part, car dealerships don’t attract casual foot traffic, the way a big-box retailer might. So the salespeople in dealerships are going to do what it takes to close a deal.

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That’s another reason to do your homework in advance – as an informed consumer, you’ll be able to confidently explain what you are and aren’t seeking. You’re less likely to be hassled if you know what you’re talking about and can keep them focused on your goals, rather than suggesting pricey vehicles or options you don’t need or can’t afford.

4. Consider Your Lifestyle

Many people have a visceral reaction to cars, and will fall in love with one just based on the looks or performance. But for those whose hearts aren’t set on a particular vehicle, a few lifestyle considerations will help narrow your search.

Do you have kids, or plan to start a family soon? Do you find yourself occasionally renting or borrowing a larger vehicle for big furniture or hardware store hauls? Do you like to pack your car with friends to head to the beach in the summer, or rarely have passengers? Do you like a sporty drive, or are you indifferent? Do you want a “connected car” that would add to your productivity and perhaps increase resale value?

Focus on a few questions to narrow down your needs. For example, if all you know is that you want a small SUV that will drive long distances in poor weather, and that you like to occasionally haul things, focus only on all-wheel drive vehicles. Then, compare fuel economy and cargo volume for each of the ones you like. So if you’re choosing between the BMW X1 and the Audi Q5, fuel economy is only slightly better in the BMW, and the Audi has 10 more cubic feet of cargo space.

5. Call Ahead

If you’ve ever walked onto a car lot looking for a specific model only to be told it’s no longer available, you’ve very likely been the victim of a common “bait and switch” tactic. Sometimes dealerships will advertise certain cars for killer prices to get people to come in, and then try to sell them on something else by claiming a magically vanished inventory. Avoid this by calling a day or two in advance to confirm that a particular model is still available, then informing the car salesperson that you’ll be coming in to check out that car.

6. Get Your Car Loan Pre-Approved

Once you have an idea of exactly the kind of car you want, you also know exactly how much of a loan you’ll need to finance it. Before taking one step onto a car lot, visit your bank and get yourself pre-approved for a car loan. (It also helps to know your credit score and the going rates for someone with your credit beforehand; you can see your credit scores for free on Credit.com to get an idea of where you stand.) This brings you into the game with a critical piece of ammo that can go a long way toward preventing you from getting trapped in a high-interest auto loan through the dealership. It’ll also save you from another common tactic: being told you’re approved for financing, then being called back in a few days down the road and informed the interest rate will be much higher than you anticipated. This can be especially grievous if you’ve already taken your new ride home pending completion of financing.

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7. Don’t Focus on Lowering Your Monthly Payment

This is easier said than done for some, but you have to bear in mind that too much emphasis on lowering your monthly payment will ultimately cost you thousands of dollars more in interest and will extend the life of your loan. When you walk onto a car lot committed to a set monthly payment, you could be throwing away any opportunity you have to negotiate the actual cost of the vehicle down. This also ties in with the aforementioned need to get pre-approved in advance so you have a “bottom line” figure that you can use to negotiate cost down to where you need it to be.

8. Don’t Wait Until You’re Desperate

Car dealers can smell desperation and will use it to their advantage to get you locked into a deal that may be all wrong for you, knowing your options are limited. If you think you’re going to be in the market for a new car soon, start shopping around now. Having an operational set of wheels gives you the ammo to be able to walk away from a negotiation if it’s not working to your advantage. If a car salesperson also knows this, they’ll be all the more willing to negotiate. If a dealer does offer you a deal and you decide to take a few days to think it over, get it in writing before you leave. If they’re unwilling to put their offer in writing, consider taking your business elsewhere.

Buying a new car should never be an impulse buy. Do your research, know what you want, and know how much you can spend ahead of time. This will put you on the best footing to deal with the potentially costly tricks that car dealers often practice.

Once you’ve driven off the lot, here’s a great way to save on vehicle repairs and maintenance: While the dealer would love for you to believe otherwise, you may have your vehicle repaired or maintained at an independent shop without voiding the warranty, as long as you keep detailed receipts of your repairs. Book local repair with Openbay, which works with certified shops nationwide, and you’ll choose the mechanic that’s right for you, while Openbay maintains your vehicle-repair records online.

This article was written by Rob Infantino, founder and CEO of Openbay, for Credit.com, where it was first published, then syndicated to Yahoo! Finance, and MSN, among others.