Save Money on Your Next Car Purchase with Year End Clearance Sales
October 17, 2007
Did you pay more than you had planned for your last vehicle purchase? If you’re in the makert for a new car, this fall may be a good time to get a better deal. As the latest and greatest models roll into dealerships, you may be able to get some lower prices on last years models as they make room for the new vehicles. Especially if you shop on weekdays toward the end of the month when salespeople need to hit their sales quotas. Here are some some tips from the Financial Planning Association to consider before making the trip to the dealer to find the good deals.
Research first: Consumer Reports publishes its New Car Buying Guide every year among other new and used car publications. Check for the best performance, fuel efficiency and service ratings on the models you’re interested in. Your public library might carry these books so you don’t have to buy them. There are some good Web sites useful for crosschecking information on models – Edmunds.com is a good one, and you’ll see up-to-the-minute incentives being offered on those models as well. Always try and get the best idea of what the average market value of the car is.
Check your trade-in value: Many experts will tell you not to mention your trade-in until you agree on a price, and that’s fine. But check in advance to see what your old car is worth before you even start talking to a dealer, and better still, see if you can sell the car on the street so you’ll just have a little more cash in your pocket. A dealer will give you less than an independent buyer because they take out the price of safety inspections, reconditioning and other costs from what they’ll offer you. Both Edmunds and Kelley Blue Book can give you rough ideas of what you can get for your car based on its model, age and condition.
Check your financing: Very few people can do an all-cash deal for a car, so take the time to make sure your credit report is in good shape and that you find the best financing deal available for your car – just remember it may not be at the dealership no matter what the ads say. Always check your local bank or credit union as well as trusted online options to see the best deal you’ll get. If you get an outside loan, that can make you a “cash buyer” at the dealership and will simplify the transaction considerably. Before you do anything, decide what your maximum down-payment and monthly auto loan payment should be, then decide what the lowest figure is that you can either get on your car from a dealer trade in or a street sale. Never let a lender or a dealer talk you into a higher payment than you can comfortably afford.
Always note tax issues: The American Jobs Creation Act of 2004 was extended through 2007 to give taxpayers the option to claim state and local sales taxes instead of state and local income taxes when they itemize deductions. Also, if you buy a new or used hybrid car, check to see if you get a tax credit for buying that particular model. Check the Internal Revenue Service Web site for more information: Before considering a lease deal, discuss such a move with your tax expert.
Check on workplace hybrid incentives: Employers are jumping on the green bandwagon and offering incentives for their workers to buy hybrid cars. Perhaps the biggest this year was Bank of America, which offered its employees nationwide a $3,000 reimbursement for employees who go hybrid. If you’re not in an emergency situation to buy a car and you might make a hybrid choice, talk to your employer about whether they’re considering such a move.
Work the phones: Wouldn’t it be nice to spend as little time in the showroom as possible? Do your research in advance, decide on the exact car you want with the features and colors selected, check that model against your resources and come up with a fair price you’re going to stick to. Call a sales manager at the dealership (not a floor salesperson), tell that person you’re going to buy the car today – this means have your financing in order – tell them the exact car you want and the exact price you’ll pay. See if they’ll fax or e-mail the paperwork to you in advance so you can look over the terms, and if everything is in order, then go into the dealership to close the deal.
This article is produced in association with the Financial Planning Association (FPA), the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.
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Don’t forget the Nadaguides.com! These are trade in values that favor the seller. Because NADA is the National Automobile Dealers Association, dealers MUST honor this price over Kelley or Edmunds. After all NADA *IS* the dealer.
Disclaimer, one of my good friends works for them, which is how I know about them. Please don’t overlook this resource since it really does favor the consumer.
[...] Save Money on Your Next Car Purchase with Year End Clearance Sales (@ Money Smart Life): "If you're in the makert for a new car, this fall may be a good time to get a better deal. As the latest and greatest models roll into dealerships, you may be able to get some lower prices on last years models as they make room for the new vehicles." [...]
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