Five Ways to Get Best Car Deals – Explained

best car dealsGetting the best car deals is not difficult but many people don’t know how to go about it. They end up spending much more money than they could have otherwise. Here are five things that will help you get the best deals:

1. Buy last year’s leftover models

Right now,  last year’s model cars are great deals as dealers and manufacturers need to get rid of leftover inventory and make room for new models. Since car makers only redesign cars about every 4-5 years, it’s likely that last year’s model of the car you want is almost identical to this year’s model — but at a much better price.

Manufacturers add “incentives” to make the leftovers more attractive to customers. These incentives can come in the form of large cash rebates, bonuses, low-interest loans, or special lease deals — or a combination of all the above. Although good deals are available on these vehicles, choices of colors and styles may be limited, especially later in the year.

Therefore, if you want to take advantage of “clearance” sales such as these, and you want a particular color, style, and options, it’s best to buy early and not hold out for possible better deals later.

2. Minimize your cost and dealers’ profit

Many people spend hours with a dealer negotiating a great price on the new car they want and then end up losing their great deal in the Finance Manager’s office. Finance Managers are charged with maximizing a dealer’s profit on every car deal. First, if you are trading a car, the dealer will offer you the lowest possible price, to increase his profit on the overall deal.

If you don’t know the fair value of your trade-in vehicle and insist on being paid that value, you can lose the advantage of the great price you negotiated for the new car.

Second, the Finance Manager will try to sell you a variety of “add-on” products and services, most of which are overpriced (for high profit) and unnecessary. He might offer extended warranties, insurance, security devices, paint and fabric protection, or service contracts. Each of these items, if purchased, increases dealer profits and reduces the value of a customer’s deal.

3. Research prices online

Car buyers should always know the following three types of prices for any new vehicle they intend to buy: 1) MSRP (Manufacturer’s Suggested Retail Price) which is typically called “sticker price, 2) dealer invoice price, which is the price a dealer pays the manufacturer, and 3) market price, which is the average price that other customers are paying for the vehicle you want. This important information can be obtained for free from web sites such as Edmunds.com. Negotiate your price based on what you know about these reference prices.

4. Research manufacturer incentives

The best new-car deals are those that are subsidized by car manufacturers. As we mentioned earlier, car companies offer “incentives” in the form of rebates and low-interest loans to help dealers sell more cars. By getting help from his manufacturer, a dealer can actually sell cars at less than invoice price and still make a profit. Customers benefit because these incentive deals are better than any deals they could negotiate on their own. Incentives are only offered on selected makes, models, and styles at any one time, and only for a limited time. We post information on this web site, Best Car Deals, each month about such incentives. You can also visit car manufacturer web sites and look for links to “Current Offers.”

5. Know the car you want

This might seem obvious, but you should always research and select the car you want before you set foot in a dealer’s showroom. It’s OK to visit dealers as part of your research but don’t let a dealer salesperson sell you a car you don’t want or need. Remember, their objective is sell you a car that makes them the most profit. Use web sites such as Edmunds.com to learn about the cars that interest you. What styles and options are offered?  What engine sizes are available?  What colors? What do owners and professionals think about the cars? Are they reliable? Safe? Economical to drive? Once you’ve decided on the car model and style you want, don’t let a dealer salesperson “upsell” you on another vehicle that you don’t want or need.

Your credit is important

Remember, the best car deals are those that have the lowest finance costs, whether it is a car loan or lease. And the lowest finance costs go to customers with good credit scores. Good credit gets the lowest loan interest rates and lowest lease money factors. In fact, some manufacturer incentives such as 0% APR loan rates and special lease deals are only available to “highly qualified” customers, meaning those with excellent credit. You should always know your latest credit score before visiting a car dealer to buy or lease a new vehicle. If you don’t know your current credit score and rating, you can get it easily online. What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com! Don’t let a dealer try to make extra profit by telling you that your credit is worse than it really is.

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