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January 26, 2015

Ways to Save on Buying a new car

Simple. Thrifty. Living.

The latest figures on car sales in the United States have put to rest concerns about the wisdom of the 2008 auto industry bailout. According to the Audodata Corporation, vehicle sales in the United States increased from a low of 9.17 million in February 2009 to 17.2 million in November 2014. An increasing number of those sales represent new cars as a rebounding economy and improved consumer confidence push buyers to lease or purchase vehicles right off the assembly line.

For many first-time new-car buyers, the question of how to get the best price is at the top of the list. Buyers can save on a new vehicle by following some simple guidelines. Here are three tips that will drop the price of a new car:

Before buyers show up at a dealership, they need to know the fair purchase price for the car they’re interested in. When dealers buy new cars from manufacturers, they pay what’s called the dealer invoice price. They then add dealer costs related to advertising and displaying the vehicle, which means different dealers charge more or less for the same vehicle. The fair purchase price is an average of what recent consumers in different regions paid for the vehicle. Kelly Blue Book collects and updates these data regularly. Buyers should be armed with the fair purchase price to get a leg up when negotiating price.

Since different dealers quote different prices, it makes sense to get quotes from more than one. Fortunately, there are many online sites that simplify the process. Prospective buyers can use sites like Edmunds, Truecar and Automotive.com to get multiple quotes from regional dealers and get the best deal without having to haggle.

Buyers can get more for their current vehicle by selling it privately. The trade-in price dealers pay is less than the private sale price. For example, Kelly Blue Book lists the trade-in value of a 2006 Ford Mustang GT Premium Coupe in good condition with 50,000 miles at $11,673. The same car might sell privately for $13,462. Selling this car privately effectively decreases the price of the new car by $1,789.

Buying a new car can be a confusing and intimidating process. Buyers can take control of that process by arming themselves with the facts, doing some research on fair purchase price, obtaining multiple quotes and getting the most for their trade-in vehicle.

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