Buying a New Car

Do you really need a new car? Would a used car or a leased car do as well? Here are some factors that might convince you a new car is the best choice:

1. You have a car to trade in or a down paymcni lhal equals at least one-third or one-fourth of the total price.

2. Dependability in a car is extremely important to you.

3. You drive 1,000 miles a month or more.

4. You do extensive highway driving or drive miles away from home.

5. Status is important to you, and a new car means added prestige to you and your family.

6. You can afford a new car.

7. You do not mind spending money on style and are aware that a car depreciates most in its early life.

You can save money by buying “last year’s model,” one of the left­overs that are reduced in price when the new models are introduced around September or October. People usually have strong opinions about cars: manufacturer, size, type, features, color, etc. 

The more flexible you are the better your chances of finding more than one dealer who has a car that you would like to own. Shop and compare; you are likelier to get a good buy from a dealer who knows that you can get your needs met just as easily elsewhere.

You should not have to pay the sticker price on a new car. Buying a car is not like buying a suit of clothes or a dress; you should always be able to get a discount off the list price. Do not be afraid to bar­gain or to make the salesman a counteroffer.

Beware of misleading sales pitches. “Lowballing” refers to the practice of offering you a car at an extremely low price. When you go to other dealers to compare prices, you find that none of the others comes close. 

Upon returning to the first salesman to inform him you have decided to buy the car, he says that he will have to get the approval of the sales manager or the owner of the dealership. You are then informed that the price the salesman quoted was too low, and the company would lose money at that price; therefore, it will be necessary to add X number of dollars to the price.

Since most customers are weary at this point and have their hearts set on that particular car, they go ahead and buy. I made the mistake of buying in a similar situation myself several years ago. I actually felt sympathetic toward the salesman be­cause I thought he had made an honest mistake. Now I know the whole episode was planned, so I urge you to turn down a lowhalling deal and buy from dealers who are more honest.

“Highballing” is another misleading sales gimmick. The dealer will quote a fantastic allowance for your old car, but he jacks up the new car price either to list price or to a figure high enough to absorb the unusually high trade-in value he is giving you. Remember that the difference you have to pay is what counts.

“Dealer prep” is not a misleading gimmick, but a fair and honest charge on all new cars. It refers to the reimbursement to the dealer for the expense and time of preparing the car for delivery. It is an as­surance to the buyer and the dealer that the car as sold is in mint condition.

When is a new car a good buy? Federal law requires manufacturers to post a sticker on the rear window of each new car quoting the manufacturer’s suggested retail price, the accessories, and the transpor­tation charges.

Here is a guideline to determine a fair price from a dealer: Subtract the transportation charges. Multiply the remaining figure by 85 percent for compacts, or by 80-83 percent for intermediates and full-size cars. To this sum, add back the transportation charges. This is the cost of the car to the dealer. 

To this figure add $150 to $300 for the dealer’s operat­ing costs, salesman’s commission, and profit. This figure is approx­imately the lowest price for which a dealer will sell a car, no matter how much haggling is done.

Examine carefully the warranty or owner-service policy when you buy a new car. This is your written guarantee against defective parts and workmanship. Be certain you understand what is and what is not covered. 

Warranties are usually in effect for a period of time or mile­age, whichever occurs first. To keep the warranty in effect, the owner must have servicing done at intervals recommended by the Owner’s Manual. During the warranty period, it is important to have service work done by a reputable dealer or service station. 

Keep your receipts. You will need them if repairs are needed under warranty to prove you have fulfilled the servicing required.

If you are switching from a subcompact, a compact, or an intermedi­ate to a full-size car (especially a luxury type), consider that the in­creased length or width of the car requires more room when parking. And do not forget to ask yourself: will this superduper creampuff fit into your garage?