Smart New Car Buying

Smart New Car Buying.

If you're looking to purchase a new vehicle, here are a few things you should know.

Every year the car manufacturers either update or change their new car offerings. (completely new models or enhanced styling and extra features)  - and they have price discounts and sales that go with moving the old models.

This puts a lot of people in a car buying mood.

But don't be lulled into paying more than you have to. The big discount you think you're getting may be nothing more than an illusion.

Car dealers often make you think you're getting a fantastic deal, and buyers tend to hear what they want to here.

 How To Get The Best Deal.

Don’t let the dealer know that you have fallen in love with the car.

We understand that a new car purchase can be an emotional experience, just don’t let the dealer know.

A car can make you feel good and act as reward or pick me up.

Often a car can be a catalyst for change and a new beginning.

Or you may just love that new shape or colour.

Drive the car. Not just a test drive around the block.

Dealers often have a test route that they have chosen that eliminates bumps and restricts the speed you are able attain.

Drive the car as you would in your normal day, try parking where you normally park.

Park it in your garage a see if it fits.

Drive the car on the freeway. (don’t exceed the speed limit)

Dealer Delivery Fee

Dealers often charge a premium, charging more than full retail price for brand new models they know will be in high demand from day one.

This is done by charging a higher than normal dealer delivery fee.

Rushing to be the first one with the hottest new car can often cost you thousands of dollars more than it needs to.

Car Finance.

The dealer will be super keen for you to finance your new purchase through the dealership finance company.

This is not always a bad thing.

The dealer receives a commission from the finance company for writing the loan.

Dealer finance can often be cheaper than a bank loan.

But because the dealer receives a commission and the person writing your loan gets paid on a commission basis the higher the rate that the dealer can charge you for the loan the more everybody gets paid and the more interest you will pay over the term of your loan.

When taking out your loan remember that the only compulsory insurance, (insurance you have to have) is comprehensive car insurance.

The car dealer will try to sell you Gap or shortfall insurance, sickness and accident cover and anything else that they can.

Buy these insurances after listening to the presentation if you feel you need them.

Don’t buy them because the dealer exerts pressure on you to take them.

Tailor the loan term to suit your budget.

We suggest that you do not exceed 5 years and that if you can afford to, shorten the term even further.

The reason for this is that most people don’t keep their cars for 5 years.

Often they will trade them in before the car is paid for and often will end up owing more than the car is worth.

This is called a shortfall.

The shortfall can be added to your next loan but this is not advisable as this only postpones or compounds the problem.

Trade in

Negotiate the purchase of the new car separately to the trade in.

Do your homework and find out how much you can purchase that new car for.

Find out what your car is worth to a dealer.

This is often a lot less than what you think it is worth.

You can do this by driving into a dealership and asking what they are prepared to buy your car for.

Check on the internet and used car classifieds to see what cars similar to yours are selling for.





Step 1.

Negotiate the price of the new car first.

Step 2.

Negotiate the price for your trade in.

If you feel like it's not enough, take the car elsewhere or sell it yourself.

Step3.

Get a price before you go to the dealership.

This can be done on the phone or through the internet.

Another way is to ask the dealer to fax you a quote as you need to discuss with your partner.

Most dealerships have Web sites where you can search for the vehicle online and request a quote on a specific vehicle.

That way you can be sure the vehicle you're negotiating on really has all the features you want.

Before you get down to numbers, you'll want to test drive the vehicle.

Step 4.

 You can make substantial savings by purchasing an end of year model.

You may receive a steep discount on an outgoing 2008 model year car.

This can be very rewarding if there is no shape change from one year to the next.

  If the 2009 version is all new or substantially changed, your car will be seen as the old shape the minute the new version hits the roads and will take a steep drop in value.

In that situation, only a huge discount will make up the loss. Or, if you just like the old version better, the extra cost may be worth it to you. As long you're aware of what you're getting into.