Car Buying

Like a chocoholic's first whiff of a candy factory, your first visit to the dealership poses the maximum danger to your pocketbook. Those new cars look so good. And you've waited so long. Dealerships know how to turn up the fires of your enthusiasm and singe your reason. So put your emotions aside. Be wary. Slow down. Save the emotion for the moment you finally drive away in your shiny new car—on budget this time. With maybe a couple extra thousand dollars in your pocket. Now that's something to get excited about! Some simple rules to remember:

• Narrow your choice to one or two models or makes before setting foot on a car lot. Why? Trying to think about a big list will do nothing but confuse you.
  
• Choose two nearby dealerships that carry the vehicle you like. If you've done your homework, where you buy isn't important as long as the dealership is reputable.
  
• Find only one car at each dealership. Again, more cars mean more confusion.
  
• Take control of the transaction. Tell the salesperson you are not buying a car today under any circumstances, but you will buy soon. Today, you are just shopping, fact-finding. Check the car out. Take a test-drive. But be firm—don't let the salesperson lead you into any discussion of buying today. If you start to feel pressure or confusion, leave immediately.
  
• Copy all the information from the Manufacturer's Suggested Retail Price (MSRP) sticker—not the dealer's sticker—before leaving the dealership. The MSRP is the lowest-priced sticker. Copy the base price of the car, the price and name/code of its options, and anything else listed on the manufacturer's sticker. For now, ignore the dealer's sticker—it contains hugely inflated profits.
  
• Compute the dealer's invoice cost. We'll tell you how in a minute, but first, why is this step important? Dealers want you to negotiate down from their inflated asking prices, a very expensive way to negotiate. The Car Facts approach negotiates up from what a dealer paid for the one car you like. Don't ever think percentage "discounts" from dealer asking prices; don't ever think "sale" price. Know what the dealer paid for the car you like and negotiate up from that. How do you figure the cost? Use an Edmund's car-pricing guide at your library, or buy your own copy from any bookstore. Or, if you have Internet access, visit the Web site at www.edmunds.com.
  
• Now, check to see if the car will fit your available cash. Here's the moment of truth. After you pay for the car, and give the dealer a profit, and pay tax and other charges, will you still be on budget?