When buying a new car, there are multiple opportunities for you to make mistakes that you will later regret. Before beginning to buy a new car, you need to do a little bit of homework first. There are a few things you need to know before you walk into the dealership.
Trade-In Value
Before you leave for the dealership, you need to do a little research on your existing car. If you plan on trading in your car, you need to go online and find out its current value. You can use Kelley Blue Book to determine the market value of your car. When using this resource, look at the trade-in value. Dealers notoriously try to offer less than the true value of your car, and if you know the value in advance, you can use it during negotiations.
Research Invoice Price
When you are about to buy a new car, knowing the invoice price of the car can come in very handy. The invoice price is the amount of money that the dealer pays the manufacturer for the car. If you go to a car dealership and look at the manufacturer's suggested retail price, it will generally be thousands of dollars higher than the invoice price. If you know how much the dealer paid for the car, you will be in a position of strength during the negotiation. You can find the invoice price by using Car and Driver's Buyer's Guide.
Interest Rates
Many people make the mistake of going straight to the dealership and using the financing the dealer offers when purchasing a car. Before you do this, first you should visit lenders to find out what they can offer you in interest rates. You can also go online and get quotes on interest rates from lenders. The best deal in financing is not always found at the dealership. If you know what interest rates are out there, you can use this to your advantage during the negotiation phase.
Ongoing Costs
When you are thinking about buying a particular car, you also need to do some additional research about ongoing costs. You will need to know if you can afford to keep the car once you buy it. Even if you can afford the car payment, you may not be able to afford the other costs that come with it. Find out how much your insurance company will charge you for insurance on this type of car. Some cars also have more maintenance issues than others. You can find out how much others are paying for maintenance online at consumer review websites.
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