Buying That New Car

Driving a brand-new car down a reasonably uncrowded road ranks high on many people’s list of pleasures. The chore of buying that car, however, is widely thought to rival root canal work in appeal.

Traditional means—haggling with a salesperson—still is the way most people buy or lease their cars. But all the haggling experience most of us have comes from the occasional garage sale; the knowledge of cars most of us can bring to bear is a comically narrow slice of what’s available. A well-trained, experienced salesperson might appear to be holding the cards.

But the real power is yours if you arm yourself with these three tools before you get to a showroom:

• Knowledge.
• Patience.
• The willingness to walk away from a deal.

You’re on your own with items two and three. But the range of knowledge you need isn’t dauntingly great and it’s all readily available. Here are some suggestions on what to get and where to get it

• Decide in advance what sort of car you want and need. Choose several that fit the kind of driving you do and the number of passengers you haul; deliver the economy you want; have the safety equipment plus the pizzazz and/or snob appeal you require; and cost what you’re willing to pay. Unless price is no object, some compromise may be in order. If price is no object, you’ve read too far already.
• Decide in advance what you’re willing to pay. For some people, total cost is the key figure; for others it’s monthly payments.

Be aware that buying a new car nearly always involves extra costs you hadn’t counted on. In California, for example, registration and taxes will drive the cost up by at least ten percent. Impulse buying of options can add an impressive sum. Insurance for new cars usually costs more than for old. The price of insurance for certain high-risk cars—those statistically most likely to be stolen or crashed—can curl the hair. Check with your insurance agent before buying.

• There are many very similar cars available. When you’ve narrowed the field to two or three that look as though they come reasonably close to meeting your wants and needs, discover which other cars are, beneath the gloss, mechanically much the same as those you’ve listed. The greater the selection you find acceptable, the greater your ability to walk away if you don’t like the deal.
• Having narrowed the field, research the cars on your list. Know the manufacturer’s suggested retail price, dealer’s invoice price, range and cost of options, EPA mileage figures, estimated cost per mile of operation, maintenance schedule, repair history, warranty coverage and conditions.

There’s a list of suggested resource material near the end of this article.

• Start visiting dealerships. Here’s where you begin to wield tool number two. Be prepared to visit a range of dealerships—and be prepared to visit some of them several times. Don’t even think of buying on the first visit.
• Most salespeople can be knowledgeable and helpful. But rely on your own information and your own common sense.
• Once your initial visits have further narrowed the possibilities, do some test driving.

One drive per car is not enough: On the first test drive, many people concentrate more on getting an unfamiliar, expensive piece of machinery back to the dealership unscathed than they do on noticing its characteristics.

When you are reasonably comfortable with the car, drive it under conditions you normally encounter; don’t just take it around the block. Is the ride too stiff? Too soft? Back the car up. Try parallel parking. Notice any problems in visibility, safety belt fit, road noise. Are control buttons, knobs, and levers convenient? Can you get into and out of the car easily? Is there enough room in the back seat? Will it tow your trailer? Accommodate your skis? Bottom out getting into your driveway? Fit in your garage?

There may be considerable pressure for you to buy immediately after the test drive. Resist it. Stick to the plan and review all the cars on your list of possibilities before you seriously consider signing anything.

• Avoid making financing or a trade-in part of your negotiation for the new car. Arrive at a price for the car, then discuss these items. Otherwise, trained salespeople can introduce so many variables that many car buyers risk becoming putty in their hands.
• If possible, avoid financing or a trade-in altogether. It’s usually cheaper to pay cash than to finance; it’s often cheaper to arrange financing from someone other than a dealer, and you’ll often get a higher price for your used car by selling privately.
• Be wary of extended warranties; they may not be cost-effective.
• Get everything in writing. Verbal promises and assurances, implications, hints—anything that is not reduced to writing—can be extremely difficult to enforce later on.

Before you sign anything

• Read and understand it. If you don’t understand a document, have it explained by someone you trust.
• Make sure all the figures (especially those with dollar signs before them or percentage signs after them) are as previously agreed. Mistakes can happen.
• Make sure all promises, implied or explicit, are included in the document.
• Remember there is no three-day cooling-off period. The three- (or any other number) day cooling-off period is a hardy misconception. When it comes to cars, there is no cooling-off period. Unless actual fraud were involved, you’re legally bound the moment you sign.
• Before you accept a car, make sure all the agreed-upon equipment and features are present. Mistakes can happen.

Alternatives to tradition

• Some dealerships, most notably those selling Saturns, don’t haggle over price. They offer a take-it-or-leave-it figure. If you’re a good bargainer, you may be able to get a similar car elsewhere for less. If you hate bargaining and would be happy with a Saturn, it’s something to consider.
• There are brokers who, for a fee, will act as an agent in buying a car for you.
• There are buying plans (including AAA’s
  Vehicle Purchasing Service [2]) that arrange with selected dealers a "pre-negotiated price" for specific models.

Buying vs. leasing

This is an involved topic. Buying usually is a good choice if you:

• like owning,
• plan to keep the car a long time,
• drive a lot (over, say, 12,000 miles per year),
• are good about maintaining your car,
• want to minimize cost.

Leasing is worth considering if you:

• drive relatively few miles per year,
• want to drive a snazzier car than you can afford to buy,
• plan to keep the car only a short time (such as three years),
• don’t want the responsibilities of ownership.

If you buy, the cheapest way is to pay cash. Next best usually is arranging your own bank loan. Most expensive often is a loan arranged through the dealer, but check with the dealer for any rebates or special financing plans that may be available.

The cheapest way to be a motorist generally is to pay cash for a good used car and drive it as long as the car remains serviceable and safe.

If you lease, what was said above about contracts goes double: Get things in writing. Read, understand, and reconfirm all facts and figures before you sign.

Some Resources
There is no shortage of Web sites, magazines, and relatively inexpensive books full of car information. Here are some good ones:

Magazines:

Car and Driver; Road and Track; Motor Trend—These three do many reviews of new models, generally from the viewpoint of someone who really loves cars. Libraries have them.

Consumer Reports—This magazine frequently publishes car reviews. They tend to stress reliability and safety, and articles generally are from the viewpoint of someone less enraptured by cars. Every year, the entire April issue is the "Annual Auto Issue," a fact-crammed magazine devoted to new cars. It’s worth buying.

Paperbacks:
Popular Mechanics New Cars & Trucks Buyers Guide; Consumer Reports Used Car Buying Guide; AAA Autograph; The Used Car Book by Jack Gillis; Lemon Book: Auto Rights by Ralph Nader and Clarence Ditlow.

Information on used cars can be valuable because many cars change very little from year to year. Knowing the repair frequency of past model-year cars can give an idea of what to expect from a new vehicle of the same model.

Brochures:
"Shopping for a Safer Car"; "Injury, Collision and Theft Losses by Make and Model."

Both of these are published by the Insurance Institute for Highway Safety, a nonprofit research organization supported by automobile insurers. Together they provide considerable information on safety features and insurance experience with various models.

For the free brochures, write to the Institute: P.O. Box 1420, Arlington, VA 22210. You can get the same information and a lot more on their Web site [3].

Web sites: Here are some general sites you might find helpful.

U.S. Department of Transportation [4] (vehicle safety information):

Insurance Institute for Highway Safety [5] (vehicle safety information).

Federal Trade Commission. [6].

This article was first published in March 1998. Some facts may have aged gracelessly. Please call ahead to verify information.