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Survival guide to buying a new car

Easy steps to getting the best deal

Published: April 05, 2015 09:00 AM

Buying a new car can be intimidating, but if you approach the process methodically, do your research, and keep the dealership experience organized in distinct steps, you can drive a great deal.

With this high-level survival guide, we walk through the basics to lay the ground starting with initial research and ending with keys in your hand. For more specific guidance, read through the articles on our new-car buying guide.

Choose your exact car

It’s important to identify which car you want, down to the trim level and options. Use the ratings and advice available online to help narrow down your choices. There are great models at all prices, but there are also ones that come up short in road test performance, crash tests, owner satisfaction, owner costs, and reliability. Let the data and Consumer Reports' recommendations filter the contenders.

Every automaker lets you configure a car on its website, and most let you search their dealers’ inventory. It’s also vital that you test drive any models you’re considering before you get deep into the process; cars can feel very different when driven back to back, and less obvious things, such as seat comfort, visibility, and dash controls, can make a big difference.

Pricing information today can readily identify the sticker price, invoice price, and available incentives. But go a step further to check the average price paid and bottom-line price (both are listed on model pages at ConsumerReports.org) to be fully empowered to negotiate.

Learn more:
Pick the right model

Set up your financing in advance

Once you know approximately how much your car will cost, you should focus on your financing options. Shop around for the lowest interest rate. You can get a good idea of current rates at bankrate.com. Ask your lender for preapproval, and get it to issue a bank check that you later fill out at the dealership. That option gives people “more negotiation power with the dealer and as much flexibility as possible when shopping,” says Amy Doane, a spokeswoman for PenFed, one of the country’s largest credit unions. Getting approved in advance takes a lot of stress out of the buying process. And you can still choose the dealer’s financing if the terms are better.

Learn more:
How to get the best loan
How to get the best lease

Get dealers to compete

That is one of the most effective ways of getting a good discount on a new car. Call or email several dealers in your area, or request a quote through their websites. Tell them the exact car you want and ask for their lowest price. Also, let them know that you are shopping around and that you will buy from

the dealership with the lowest price. With your pricing research, you will be able to assess the offers. Some dealers may not have the exact vehicle you configured, so double-check any prices that seem out of the normal range. And resist their attempts to draw you in to the dealership to negotiate.

You can also get quotes online through automaker websites or at such sites as AutoTrader.com, Cars.com, CarsDirect, and TrueCar. Consumer Reports subscribers can use our Build & Buy car-buying service to get up-front dealer pricing and guaranteed savings in most states from local dealers who are dedicated to high customer satisfaction. There is no obligation to buy, and you remain anonymous until you choose your dealer. The more quotes you get, the better. And you can always use lower quotes as leverage to negotiate with other dealers.

Learn more:
How to negotiate effectively

Get the most for your trade-in

If you plan on trading in your current car, give it some attention before going to the dealership to close the deal. Find out how much it’s worth by going to Edmunds (edmunds.com), Kelley Blue Book (kbb.com), or the National Automobile Dealers Association (nada.org), or buy checking on ConsumerReports.org.

To maximize your car’s value, it’s worth putting a little effort into its curb appeal. Wash and wax the exterior, and clean the interior. “If you bring us an especially clean car, you can get a lot more money,” a Seattle-area dealer told us. But don’t go overboard, he says. “We can deal with scuffs and scrapes cheaper than you can.”

It does pay to do major repairs. A dealer can’t sell a car with a chipped windshield, so it will deduct about $300 to get it fixed, the dealer told us. They will also take off $500 to $600 for worn tires. So replace them if you can do it for less.

Once in the dealership, nail down the new-car transaction before discussing the trade-in. Don’t let salespeople roll the transactions—or the financing—together into one monthly payment figure. That gives them too much leeway to manipulate the figures to the dealer’s advantage. And be ready to negotiate the trade-in value if you feel you’re being lowballed.

Learn more:
How to sell a used car

Just say no to dealer extras

You should have the price locked down when you go to the dealership to finalize the sale. But the staff will still try to sell you extras to pad the dealer’s bottom line. Those can include undercoating, fabric and paint sealants, and VIN etching, in which the dealer etches the vehicle identification number (VIN) into the windows to help prevent theft. Don’t bite.

All modern cars are factory-treated for rust protection, and additional undercoating can do more harm than good. You can get a can of fabric sealant or paint protectant or wax at an autos parts or other retail store for a few dollars and apply it yourself. And if you want VIN etching, you can often have it done at an independent shop or do it yourself for a lower price.

Dealers will also try to sell you a service contract, or extended warranty. But if you’ve picked a reliable car, in many cases you’ll spend more for the warranty than you’ll save in repairs.

Review the paperwork carefully. If you’re financing through the dealer, verify that your payments equal the amount of the loan, plus interest. Most dealers will include a documentation fee and sometimes a regional advertising fee. We’ve found that it’s difficult to negotiate those away, but you may be able to bargain for an extra set of floor mats or another low-cost accessory in return. Also check the fine print on the back side of the contract. Many dealers will include a clause requiring you to agree to binding arbitration and give up your right to claims under fraud and lemon laws. We’ve had mixed results when asking to strike such language.

Learn more:
Watch for these sales pitches

Consumer Reports Build & Buy

When buying a car, in addition to research and reviews, Consumer Reports offers subscribers access to the Build & Buy Car Buying Service at no additional cost. Through this service, a nationwide network of more than 9,000 participating dealers provide upfront pricing information and a certificate to receive guaranteed savings off MSRP (in most states). The pricing information and guaranteed savings includes eligible incentives. Consumer Reports subscribers have saved an average of $2,919 off MSRP with the Build & Buy Car Buying Service.



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