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You are about to travel one of the more
interesting roads in America. The one that leads through a new car dealership. And your
actions could save or cost you thousands of dollars.
Be Prepared
First, you need to be prepared. You'll want to check out safety and reliability records
for different models. You'll also want to spend some time at dealers checking out various
makes and models. Tell the salesperson that you won't buy that day. If you buy a car the
first time that you see it, you've almost certainly paid too much.
Next you will want to collect pricing information. Edmunds is a good resource. If you
don't have internet access, you can always pick up a new car guide at a newsstand or
bookstore. You'll learn that there's more than one price for the car you want to buy. The
"invoice price" is what the dealership pays, but it's not their true cost.
They'll receive rebates, discounts, incentive awards and allowances from the manufacturer
that will reduce the cost. Often the rebates are large enough so that the dealer can sell
to you "at invoice" and still make a reasonable profit.
At the dealership you'll encounter the "Manufacturer's Suggested Retail Price"
(MSRP), that is usually shown on a large label on the window. It should include retail
price, transportation charges and fuel economy. Finally, there's the "Dealer Sticker
Price". This includes MSRP plus any dealer preparation items like undercoating.
Generally these items are very profitable for the dealer. You'll find the largest
difference between invoice and sticker prices on the most popular and least available
models.
Part of the goal of your research is to decide which make and model is right for you.
Don't let your ego decide what car you'll drive. Sure, you want something that's bigger,
faster or sexier. What you may really need is something to carry people and cargo to work,
school or shopping. The bottom line? Make sure that you can afford the car you want.
The Deal
OK, you're now ready to visit the dealer and begin dickering. Before we start, however,
let's get one thing clear. There are many fine, honest car salespeople, but selling cars
is a very competitive business. This means some dealers and salespeople are more willing
to pressure the buyer than others.
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