- Determine the type of vehicle you need. Once you’ve established the kind of vehicle that fits your lifestyle, it’s time to choose the model you want. Do your research on the Internet before going to a dealership. Talk to others who have the same kind of car – what do they like about it? What do they NOT like about it? How do the gas mileage and insurance cost compare to your current vehicle? Are there features you want your vehicle to have that are not available or come standard on another model? These are all things to consider when purchasing a new vehicle. Having a good idea of what you want is a good idea, but don’t “marry” yourself to just one. Keeping two or three options open will allow you flexibility if, for any reason, something goes wrong along the way.
- Edmunds.com and similar valuation sites are good resources to obtain the invoice price and manufacturer’s suggested retail price (MSRP) on most new vehicles. This is important information to have before visiting a dealership.
- It’s time to choose a dealer. Just because a dealership is located down the street doesn’t mean they deserve your business. Word-of-mouth from those you know and trust is never a bad thing, and past experience is generally something you can trust. You can review reports with the Better Business Bureau at http://www.bbb.org/search, and/or do your own online research. There are many neutral websites to assist consumers in locating reputable dealers. For example, http://www.carprousa.com has a rigorous certification process to be listed as one of their approved dealers and they post customer experience comments as well.
- Just before visiting the dealership, you can usually check out their inventory online to make sure they have the vehicle of your choice in stock. If you head out, ready to buy, only to find out they don’t have one and you can’t even complete a test drive, you’re setting yourself up for disappointment from the start. It’s one thing to have to wait for your vehicle because you’ve completed a test drive, know it’s the one you want and have ordered one with an option package that wasn’t immediately available. It’s an entirely different story when the excitement of getting a new car is dashed away within minutes of entering the dealership.
- You’ve done your research. You’ve test driven the vehicle. You’ve made a decision. Now it’s time to negotiate a fair price for everyone involved. The research you did in step two is a great start, but there are other factors to consider (availability of the vehicle, current market conditions, etc.) so work with your salesperson to settle on a fair price together.
- If you have a trade-in, you can get an idea of what its worth online from websites such as KBB.com (Kelley Blue Book) or Edmunds.com. As you enter your vehicle information, make sure you are realistic about the condition of your vehicle and keep in mind the valuation on these sites is simply an estimate. A true value of your vehicle can be obtained by going to a dealership and allowing professionals who are trained to evaluate the physical condition of your vehicle and give you an offer based on current market conditions. Jerry Reynolds has some thought-provoking advice in his video “What is your trade-in really worth?” Check it out at http://www.carprousa.com/ask-car-pro.
- When you take your vehicle to have it appraised, sure you remove all of your personal affects. Double check the glove box, the center console, the trunk and any other area that might have anything you want to keep. Also, when you’re digging through the glove box, go through the documents in there for anything that may have your name, address or any other personal information on it and remove it. If you wrote any of this in the owner’s manual, black it out, tear it out, or remove the manual altogether (new manuals can easily be purchased online). Finally, make sure your vehicle is clean inside and out. It makes a difference.
- Once you’ve settled on the price of the new vehicle (as well as any applicable trade-in value), you will move on to the financing phase. If you’re not comfortable with the dealer reviewing your credit, don’t give them your social security number. You can arrange for your own financing or pay cash. Keep in mind, though, a dealer cannot accurately quote you a rate or payment amount without running your credit. And sometimes allowing them the opportunity to beat an offer you have in-hand will work to your advantage.
- During financing, you will be offered a variety of products. price of some of these products is negotiable, while others are not, depending upon state rules and regulations. For example, extended service plans are negotiable, but many states regulate pricing on insurance coverage so items like credit life, credit disability and GAP coverage may be pre-determined.
- Read the documents before you sign them. Review all the numbers on the contract. Make sure the figures are what you agreed to and the interest rate is acceptable to you. Once you’ve signed everything, you are not only the owner of the vehicle, but you also own the terms of the contract as written, so be sure you are comfortable with what you are signing. Ask questions if there are items you don’t understand or that don’t make sense.
- Don’t allow someone to pressure you. Buying a vehicle because you feel as if you were forced to do is the wrong reason to buy that vehicle and it will likely lead to buyer’s remorse. If you’re not comfortable with a situation, politely excuse yourself and go elsewhere.
- Perhaps you have determined a used vehicle is a better fit for you at this time. The overall buying process is not so different from purchasing a new vehicle, but how you decide on which vehicle to purchase can be decidedly different. If you have your heart set on a specific model, try to locate more than one within an acceptable travel radius. (Websites like Edmunds.com or Cars.com can help you with this.) Having more than one to choose from gives you “fallback” options if one is sold or isn’t quite what you expected when you see it in person. Do your research on the dealerships that have the vehicle in stock. Make sure they are reputable and someone with whom you want to do business. And never become so emotionally attached to a vehicle that you are not prepared to walk away from the deal if you feel pressured or uncomfortable in any way.
- If you prefer to work with a specific dealership, flexibility is the key. They may have several vehicles that suit your needs, but if you’re looking for a specific model, you may have to wait. Depending on the dealer, they may be able to locate one for you. It doesn’t hurt to ask if that is a possibility, but they may also ask for a deposit prior to going through the expense and effort of doing so. As part of the deposit agreement, the condition of the vehicle must be acceptable upon receipt. If it is not, make sure your deposit can be applied toward the purchase of a different vehicle at the dealership.
- Websites such as Edmunds.com and Cars.com will again come in handy when researching used vehicles. Not only can you read their impartial reviews, but they also post consumer reviews, which can be very helpful when choosing a used vehicle. These sites can also help you in determining what a fair market value for the vehicle may be.
- General information about the make and model is helpful, but when purchasing a used vehicle, specific information about that particular unit is priceless. Ask to see any service records the dealer may have on file for the vehicle. You can also ask for a Carfax and/or an AutoCheck on the vehicle – if possible, get both so you can compare them. If you have a mechanic who typically does the work on your family’s vehicles and can have him/her give you an impartial opinion on the vehicle prior to your purchase, all the better.
- Once you’ve determined the vehicle you are going to buy, it comes down to price. You don’t (and likely won’t) know what the dealer paid for the vehicle, so negotiating a fair price on a used vehicle is typically based solely on your research prior to going to the dealership. The dealer is not there to give vehicles away, but if you don’t feel as if you are getting a fair price on the vehicle, be prepared to walk away from the deal.
At this point, the remainder of the used vehicle buying process is essentially the same as purchasing a new vehicle (refer to steps 6-11 above).
Many people dread the thought of “going through” buying a vehicle, but purchasing a vehicle can be a pleasant experience. As with any major purchase, it’s important to do your research and be prepared. Understand the process and you’ll find it much easier to navigate.
Estimate potential increases in fuel expenses.
As gas prices rise, a vehicle’s fuel economy can become ever-more important when making a buying decision. Even if you just want to determine how much extra your current vehicle is costing with each increase in fuel prices, the formula for doing so is simple. Take the average number of miles you drive per month and divide it by the average miles per gallon (mpg). Then, multiply that number by the increase in gas prices. This is the additional money you spend each month at the pump. For example, a $0.05 increase in gas prices would look like this: (Ave miles per month/Ave mpg) X .05
If you prefer, we have completed some of the calculations for you. Match the closest miles…
If your vehicle gets 10 miles per gallon:
- And you drive 1,000 miles per month, each 5-cent increase in fuel costs you an additional $5 per month
- And you drive 1,500 miles per month, each 5-cent increase in fuel costs you an additional $7.50 per month
- And you drive 2,000 miles per month, each 5-cent increase in fuel costs you an additional $10 per month
If your vehicle gets 15 miles per gallon:
- And you drive 1,000 miles per month, each 5-cent increase in fuel costs you an additional $3.33 per month
- And you drive 1,500 miles per month, each 5-cent increase in fuel costs you an additional $5 per month
- And you drive 2,000 miles per month, each 5-cent increase in fuel costs you an additional $6.67 per month
If your vehicle gets 30 miles per gallon:
- And you drive 1,000 miles per month, each 5-cent increase in fuel costs you an additional $1.67 per month
- And you drive 1,500 miles per month, each 5-cent increase in fuel costs you an additional $2.50 per month
- And you drive 2,000 miles per month, each 5-cent increase in fuel costs you an additional $3.33 per month
If your vehicle gets 25 miles per gallon:
- And you drive 1,000 miles per month, each 5-cent increase in fuel costs you an additional $2.00 per month
- And you drive 1,500 miles per month, each 5-cent increase in fuel costs you an additional $3.00 per month
- And you drive 2,000 miles per month; each 5-cent increase in fuel costs you an additional $4.00 per month
If your vehicle gets 35 miles per gallon:
- And you drive 1,000 miles per month, each 5 cent increase in fuel costs you an additional $1.43 per month
- And you drive 1,500 miles per month, each 5 cent increase in fuel costs you an additional $2.14 per month
- And you drive 2,000 miles per month, each 5 cent increase in fuel costs you an additional $2.85 per month