And Used Vehicle Buying Guide Helpful
Purchasing a new or used vehicle can be very stressful and by following
these helpful tips you can negotiate with ease because you will be prepared
What is "Invoice?"
The invoice price is how much the dealer paid for the car. The dealer's
final cost may be even lower because manufacturers often give rebates,
allowances, and other incentive awards. Dealers may be willing to bargain on
their profit margin, which is generally between 10 to 20 percent.
Don't discuss the possibility of a trade-in until you get the best
possible price for your new car. Before buying a service contract, compare it
with the manufacturer's warranty. Don't pay extra for coverage you may already
have. Buying credit insurance is not required for a loan. Buying a New Car is
usually the second most expensive purchase many consumers make, after the
purchase of their home.
According to the U.S. Department of Commerce, the average cost of a new
car sold in the United States in 1996 was $27,000.
The Elements of Invoice
To give you a better sense of the negotiating room you have when buying a
car, it helps to understand the following terms,
Invoice Price is the manufacturers initial charge to the dealer. This is usually higher than the dealer's final cost because dealers often receive rebates, allowances, discounts, and incentive awards. The invoice price does not include freight (also known as destination and delivery). If you are buying a car based on the invoice price (for example, "at invoice," "$ 100 below invoice," "two percent above invoice"), be sure to check on the freight charges.
Charges apply to the delivery of the vehicle. The manufacturer always
charges the dealer to deliver a new vehicle from the factory. These charges do
vary on all vehicles and it is very difficult and
nearly impossible to negoitate with the dealer. You can find the exact
destination charges on the Auto Pricing, Auto World and Car Pricing web sites.
Price is the cost of the car without options, but includes standard
equipment and factory warranty. This price is printed on the Monroney sticker
Sticker Price shows the base price, the manufacturer's installed options
with the manufacturer's suggested retail price, the manufacturer's
transportation charge, and the fuel economy (mileage). It is a label affixed to
the car window and is required by federal law. The label may not be removed by
anyone other than the purchaser.
Sticker Price, usually on a supplemental sticker, is the Monroney sticker
price plus the suggested retail price of dealer-installed options, such as
additional dealer mark-up (ADM) or additional dealer profit (ADP), dealer
preparation, and undercoating.
Financing Your New Car
You may find that it is sometimes more affordable to pay higher financing charges on a car that is lower in price or to purchase a car that requires a smaller downpayment. Some dealers and lenders may ask you to buy credit insurance, which pays off your loan if you should die or become disabled. Before you add this cost, you may want to consider the benefits available from existing policies you may have. Remember, buying credit insurance is not required for a loan.
Buying A New Vehicle
information is intended to help give you the information you need to make a
smart deal of a new or used vehicle. Before you step into a dealer's showroom,
it helps to know what the car model and options you want and how much you are
willing to spend. That way, you are less likely to feel pressured into making a
hasty or expensive decision and more likely to get a better deal. To help you
shop, you may want to consider these suggestions:
· Check the VIS New Vehicle Price Area that
discuss new car features and prices. This will provide information on the
dealer's costs for specific models and options.
· You also may want to contact the VIS car-bu
in service. Please see the form within the VIS Service. Click on the Advertising Banner and fill out the form.
· Plan to negotiate on price. Dealers may be
willing to bargain on their profit margin, which is
generally between 10 to 20 percent. This is usually the difference between the
manufacturer's suggested retail price and the invoice price. To help you do this,
refer to the worksheet listed at the end of this brochure.
· Consider ordering our new car if you do not see the car you want on the dealer's lot. This usually involves a delay, but cars on the lot frequently have options you do not want -- which add considerably to the cost.
Trading in Your Old Car
After getting your
new car for the best possible price, only then discuss the possibility of a
trade-in. First, however, find out the value of your old car. You may want to
check the VIS Price here on the AutoWorld Site. The VIS Price will tell you how much your car is
worth. (This Is An Opinion Only,Please see the Disclaimer). This information may
help you get a better overall price from the dealer. Remember, too, that though it may take longer, you generally will
get more money by selling the car yourself.
Considering a Service Contract
that you may buy with a new car provide for the repair of certain specified
parts or problems. These contracts are offered by manufacturers, dealers, or
independent companies and usually initially run concurrently with the manufacturer's warranty.
Remember: a warranty is included in the
price of the car;
a service contract costs extra. Before deciding to purchase a service contract, read it carefully
and consider the following
What is the difference between the coverage under the warranty and the
coverage under the service contract?
What repairs are covered?
Who pays for the labor? The parts?
Who performs the repairs? Can repairs be made elsewhere?
How long does the service contract last?
6. What is the cancellation and refund policy?