How to get the Best Deal on a New Car

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The world of car buying has changed drastically in the last few years. Gone for the most part are the cheesy salesmen in plaid coats who negotiate the price of a new car using unsavory tactics. The Internet helped to rethink the entire notion of car buying. Now you can go online, do research on the type of vehicle you are interested in and even buy your new car without ever leaving home.
 
Today you can get the car of your dreams without the stress and pressure and even buy a new car without blowing your budget. How do you get the best deal on a new car? Let's find out.

Do your Research

Weeks before you head down to a car dealership, read everything you can find about the make and model of vehicle you are interested in. Read the reviews to see how the car rates for safety and reliability. You'll find great road test videos of the car you like on YouTube. At Lithia Motors, we have our own YouTube channel called "Cruisin'" that showcases today's coolest cars - check it out!
 
Once you have narrowed your search to the make, model, and trim level you are looking for, head over to lithia.com to search for your new car from the thousands available at our nearly 300 dealerships from coast to coast.
 
Once you have a good idea of what the car you want retails for, visit several banks and credit unions to find the best deal on auto loans. Get pre-approved for a loan to save time at the dealership.

Financing your New Car

Buying a car should not be confusing and stressful. Getting pre-approved for a car loan will save you time and confusion and assure that you get the loan you want. By having a pre-approved loan in your pocket, the auto dealership will need to beat your deal in order to offer you a better loan. That's a good position to be in.
 
Take advantage of special financing or cash back incentives from the automaker. When cars are at the end of their production cycles, rebates are often offered to bolster sales. The same is true of low interest financing on new cars.

Head to the Dealership

Once you are completely familiar with the car you have in mind and have checked the pricing and incentives as well as having a pre-approved loan in place, narrow your search. Look up the make, model, and trim level (even color) of the vehicle you have in mind and look for a dealer near you that has the car you want. Dealerships will often help you find the exact car you are hoping for. At Lithia Motors, we'll find the car, right down to the color and special package you want, even if we have to get it from another dealership.
Like any other type of sales business, auto dealerships have monthly sales goals to meet. You can often get a great deal by finding a dealership that hasn't reached a monthly or quarterly sales goal. Automakers structure sales incentives so that dealerships meet certain goals in selling a certain number of vehicles. You can sometimes make those types of incentives work for you to get a better deal on a new car. Dealerships need to meet these sorts of sales goals at the end of the month or end of a quarter.
Focus on the Price
Once you have found the right car for you, take it for a test drive. Get comfortable with all of its features. Does it include all the infotainment and driver assist features you want? If you are happy with the vehicle and you are ready to buy, remember to stay focused on the bottom line - the price of the car.
 
It is easy to become confused at a car dealership when you are looking at the paperwork. You'll see the monthly payment, the financing charges, the value of your trade-in, the add-on features, but the most important thing is to stay focused on the price of the car.
 
Rather than boiling a deal down to how much you can afford to pay each month, look at the out-the-door cost of the vehicle, including the cost of financing. You want to negotiate the lowest possible price for the car and the lowest cost of financing. When you focus on the monthly payment, the dealership can lower the payment by extending the loan out to eight years. But in such a case, you are paying a lot more for the car over that time.
Research Trade-In Value
It is smarter to get the shortest-term loan possible with a monthly payment you can afford. You don't want your car loan to exceed the vehicle's manufacturer's warranty. You should also separate your trade-in from the purchase. Make the amount you are given for your old car a separate negotiation.
 
Do some research on the value of your used car before you go to the dealership. Kelley Blue Book offers a trade-in calculator online. Just enter your old car's VIN number, the year, make, and model, and condition of the vehicle, and mileage. The calculator will give you a good idea of what a dealer will offer you. Show the market value of your trade-in to your salesperson. If you don't like the dealer's offer for your trade-in, you don't have to take it. You can always sell your car yourself and use the cash as part of your down payment on a new car.
 
Remember that in many states, when you trade in your old car through a dealer, you only pay sales tax on the difference when subtracting the value of the trade from your new car's cost. If you sell your old car yourself, you'll pay the sales tax on the entire amount you get.
Negotiating the Best Price
You may have had the experience of spending a long time at a dealership during the negotiation process of setting the price you are willing to pay for a car. You may have had your salesperson leave you to talk to his or her manager to discuss your deal. The salesperson may have jotted down notes on a yellow pad regarding the amount you are willing to pay and how much you want your monthly payment to be. The salesperson may even ask you to sign this offer to take to his manager. "If I can get you this price, will you buy today?" This tactic is to get you locked into an agreement. This is known as Boxing the Customer and anything you might sign in this regard is completely meaningless. The only documents that matter are the contracts you sign in the finance office.
 
Before you go to a dealership, take the time to go online and check several dealerships for the car you are looking for. Know what the car is going for on the open market. You can also cut out all the drama and counteroffers by buying your new car completely online. You can also negotiate all the extras on your purchase. Request a reduction in documentation fees and dealer prep charges. Ask the dealer to throw in accessories such as floor mats or services such as lifetime oil changes.

Finance Office Extras

Car dealerships make lots of extra money by getting you to buy a host of products and services you may not need. When you are in the finance office to sign all the documents to close the sale, you will be offered a number of "extras." The finance manager will explain each of these products to you such as the lifetime oil change, fabric or leather protector for your seats, ceramic coating for your paint, undercarriage protector, anti-theft devices, nitrogen in the tires, window tinting, extended warranties and more.
The finance manager will also tell you the importance of adding these items to your new car today so they can be included in your financing. After all, each of these products or services will only add a dollar or two per month to your payment, right? Wrong. Let's say the Leather Protector Package costs you an additional $15 per month. On a six-year auto loan, that comes to $1,080. Buying extras at the dealership can add many thousands of dollars to your deal. Plus, there's no real hurry in buying these products and services as you can always think about them and decide to add what you want later.

Buying a New Car through Lithia Motors
When you purchase a new or used car through a Lithia Motors dealer, know that we value your time and appreciate your business. We want you as a customer for life. Toward that goal, we work on your purchase and handle your trade-in quickly and efficiently. We work to get the best trade-in value for your old car and offer our best price on your new car.
 
We have over 75 years of experience in supplying our customers with personal transportation solutions. With nearly 300 dealers across America and Canada, there's a Lithia dealer near you.