New And Used Vehicle Buying Guide Helpful Fast Facts

         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                 

1) 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.

2) 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.

Destination 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.

Base Price is the cost of the car without options, but includes standard equipment and factory warranty. This price is printed on the Monroney sticker (see below).

Monrone 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.

Dealer 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.

3) 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.

4)  Buying A New Vehicle

          This 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.

5)  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.

6)  Considering a Service Contract

         Service contracts 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 questions:

            1.     What is the difference between the coverage under the warranty and the coverage under the service contract?

            2.     What repairs are covered?

            3.     Who pays for the labor? The parts?

            4.     Who performs the repairs? Can repairs be made elsewhere?

            5.     How long does the service contract last?

            6.     What is the cancellation and refund policy?