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AutoWorld's Purchasing a new or used vehicle can be very
stressful and by following these helpful tips 1) What is "Invoice?" The invoice price is how much the dealer paid for the car. The dealer's final cost may be even lower because manufacturers often give rebates, allowances, and other incentive awards. Dealers may be willing to bargain on their profit margin, which is generally between 10 to 20 percent. Don't discuss the possibility of a trade-in until you
get the best possible price for your new car. Before buying a service contract, compare it
with the manufacturer's warranty. Don't pay extra for coverage you may already have.
Buying credit insurance is not required for a loan. Buying a New Car is usually the second
most expensive purchase many consumers make, after the purchase of their home. According
to the U.S. Department of Commerce, the average cost of a new car sold in the United
States in 1996 was $27,000. 2) The Elements of Invoice To give you a better sense of the negotiating room you have when buying a car, it helps to understand the following terms, Invoice Price is the manufacturer's initial charge to the dealer. This is usually higher than the dealer's final cost because dealers often receive rebates, allowances, discounts, and incentive awards. The invoice price does not include freight (also known as destination and delivery). If you are buying a car based on the invoice price (for example, "at invoice," "$ 100 below invoice," "two percent above invoice"), be sure to check on the freight charges. Quick Quote Here Destination Charges apply to the delivery of the vehicle. The manufacturer always
charges the dealer to deliver a new vehicle from the factory. These charges do vary on all
vehicles and it is very difficult and nearly impossible to negoitate with the dealer. You
can find the exact destination charges on the Auto Pricing, Auto World and Car Pricing web
sites. Base Price is the cost of the
car without options, but includes standard equipment and factory warranty. This price is
printed on the Monroney sticker (see below). Monroney Sticker Price shows the base price, the manufacturer's installed options with
the manufacturer's suggested retail price, the manufacturer's transportation charge, and
the fuel economy (mileage). It is a label affixed to the car window and is required by
federal law. The label may not be removed by anyone other than the purchaser. Dealer Sticker Price, usually on a
supplemental sticker, is the Monroney sticker price plus the suggested retail price of
dealer-installed options, such as additional dealer mark-up (ADM) or additional dealer
profit (ADP), dealer preparation, and undercoating. 3) Financing Your New Car You may find that it is sometimes more affordable to pay
higher financing charges on a car that is lower in price or to purchase a car that
requires a smaller down payment. Some dealers and lenders may ask you to buy credit
insurance, which pays off your loan if you should die or become disabled. Before you add
this cost, you may want to consider the benefits available from existing policies you may
have. Remember, buying credit insurance is not required for a loan. 4) Buying A New Vehicle This information is intended to help give you the information you need to make a smart deal of a new or used vehicle. Before you step into a dealer’s showroom, it helps to know what the car model and options you want and how much you are willing to spend. That way, you are less likely to feel pressured into making a hasty or expensive decision and more likely to get a better deal. To help you shop, you may want to consider these suggestions:
5) Trading in Your Old Car After getting your new car for the best possible price,
only then discuss the possibility of a trade-in. First, however, find out the value of
your old car. You may want to check the VIS Price here on the AutoWorld Site.
The VIS Price will tell you
how much your car is worth. (This Is An Opinion Only, Please see the Disclaimer). This
information may help you get a better overall price from the dealer. Remember, too, that
though it may take longer, you generally will get more money by selling the car yourself. 6) Considering a Service Contract Service contracts that you may buy with a new car
provide for the repair of certain specified parts or problems. These contracts are offered
by manufacturers, dealers, or independent companies and usually initially run concurrently
with the manufacturer's warranty. Remember: a warranty is included in the price of the
car; a service contract costs extra. Before deciding to purchase a service contract, read it carefully and consider the following questions:
Further questions can be emailed to the editor of AutoPricing at: editor@autoworld.com |