Buying a car is exciting, but it’s easy to get carried away in the moment and forget to ask all of the questions that you need to ask. New cars are expensive, so you want to be sure that you get the best deal possible while still getting the car you truly want.
The MSRP, or Manufacturer’s Suggested Retail Price, is the sticker price of the car that you are looking at. This will include the trim level, the entertainment system, and the safety features.
The MSRP is not the final sale price however. The final price will also include additional fees (such as transportation fees and marketing fees). Additionally you will have to pay for registration and for sales tax, so keep that in mind when deciding if a car is within your budget or not.
A major benefit of buying a new car is that it will usually come with a warranty. Factory warranties will differ from manufacturer to manufacturer, so you want to be sure you understand exactly what is covered and what you will be responsible for paying out of pocket. Some warranties will include maintenance such as oil changes for the first few years as well. Getting a detailed description of the warranty plan will help you make an informed decision when buying your car.
You should always test drive the car you want to buy. And in most cases this is encouraged. It might not be the exact car you will take home, but a test drive can give you a good feel for how a car drives and how good of a fit it is for you. Car dealers usually like test drives as it provides another chance for them to sell you the car and show you all of the features that can help them seal the deal. Ask them if you can take the car on the highway as well so that you can get a realistic feel for how a car drives.
You should also ask what type of add ons are available for the model you are interested in. Do you have your heart set on a moonroof or sunroof? Is there an entertainment system feature that is particularly important to you? What about trim level upgrades, safety features, and security features? Most cars these days have a lot of upgrades to choose from, so you should have plenty of options, but it's good to be sure that anything that you really want is available before getting too far into negotiations.
Incentives are limited time offers that dealerships will include to sweeten the deal for you. An incentive may be a rebate (we talk about that later), or it could be any of the following offers:
Lowered interest rates
Zero percent financing for a certain period of time
Upgraded accessories or add ons
Maintenance perks such as free oil changes or tune ups
Extended warranty period
And more
Incentives can tip the scale for you and help make a decision one way or the other.
A rebate is a specific type of incentive that is offered from the manufacturer to encourage a sale. A rebate is a money back offer that will lower the purchase price of the car. It can either lower the total sale price or it can be applied to the down payment to reduce the amount you will have to pay upfront. There may be specific requirements for a manufacturer rebate, such as having a certain credit score. You may need to finance through the dealership to qualify as well. But it’s good to have all of the numbers in front of you so that you can make an informed decision.
If you are looking to buy an electric vehicle there may be tax credits available. A qualified plug-in EV purchase can get you up to a $7500 tax credit, which might help you make a final decision when it comes to which car is right for you.
You should always try to negotiate when buying a new car. Whether it’s trying to reduce the overall price of the car or negotiate some of the fees that are added on, see if the dealer is willing to work with you on the price. It helps to come prepared with information such as the Kelley Blue Book value of the car and some other pricing from competitors .
If you have a car that you are looking to get rid of, a trade-in might be the best option for you. Not only can you lower the price of your new car, but you can save yourself the hassle of selling your old car. If you decide to trade your car in, be sure to negotiate the trade in amount separately before negotiating your new car purchase. They should be treated as two separate transactions.
We always recommend getting pre-approved for a car loan before you ever step into a car dealership. Getting preapproved will help you in a few ways:
It gives you a firm idea of what car you can afford
It alerts you to any financial issues ahead of time
It makes you look like an experienced and serious buyer
It gives you more negotiating power
When you have a financing offer in hand you can simply ask the dealer if they can do better than the loan offer you already have. If they can, then great! You are getting a better deal than you would have in the first place. If they can’t beat the offer then you already have a good car loan option available to you. Getting pre-approved is a win-win when you are buying a car.
Don’t let the excitement of buying a new car get the best of you. Instead, do your research, bring in your questions, and stay level headed to ensure you get the best car and the best loan possible.
If you already have a car loan, there’s a good chance you are overpaying every month. Contact Auto Approve today to see how much money you can save by refinancing!