Your Money_ The Missing Manual - J. D. Roth [88]
Whatever you do, don't sign anything until the very end. And don't sign anything you don't understand: If it seems strange, it probably is. Ask questions and don't be afraid to pull out at the last minute.
Note
For an entertaining look at what goes on behind the scenes at dealerships, set aside a couple hours to read "Confessions of a Car Salesman" at Edmunds.com: http://tinyurl.com/car-confessions. It's funny and will help you get a better deal.
On The Money: Competitive Bidding
The tips in this chapter can help you get a good price on a new car, but you can do even better without visiting a dealership at all!
In his presentation "How to Buy a New Car Without Getting Screwed" (http://tinyurl.com/newcar-howto), Rob Gruhl argues that the way to get the best price on a new car is competitive bidding, pitting dealerships against each other: "Call eight to 10 dealerships and tell them, 'I'm really interested in buying this car today. Can you give me a price? I'm doing competitive bidding.' They'll say, 'We don't do competitive bidding.' And you'll say, 'If you give me the best price, I'll come down and buy it from you today'." At that point, most dealers will give you a price.
When you're getting bids from dealers, make sure they're quoting you the price for the same car with the same options, and that you're getting the drive-it-off-the-lot price. Once you have bids from as many dealers as possible, contact them again to share the best offer you received and see if they can match it. When you have the best price, ask the winning dealership to put it in writing, and then go down and pick up your car. (If anything goes wrong during the process, leave.)
If you like the idea of competitive bidding, but need a little help, check out FightingChance.com, where you can pay $40 to get pricing info for the car you're looking at, car-buying tips, and instructions for executing a "fax attack" similar to the one my wife and I used when buying her Civic (see The Right Way to Buy a Car). Or check out this free car-buying guide at The Motley Fool: http://tinyurl.com/MF-carfax.
Take delivery
Congratulations! You got yourself a great deal on a new car. Now all that's left is to get the keys and drive it home.
In all the excitement, it's easy to forget things like double-checking that the owner's manual is in the glove box or that there's gas in the tank. To make sure you don't miss anything, download this free new-car checklist from Consumer Reports: http://tinyurl.com/CR-newcar.
Sell your old car separately
If you want to get the most for your old car, don't trade it in. By the time you've spent hours negotiating the price of your new car, you're ready to be finished. The dealer knows this and will try to take advantage of your exhaustion to give you a raw deal on your trade-in.
Even though it takes more time and effort, you're far better off selling your old car yourself (see Selling a Car). At the very least, don't mention that you have a car to trade in while you're negotiating the price of the new car.
Buying Used
You can save thousands of dollars by choosing a car that's just 2 or 3 years old instead of buying a new one. Though they continue to lose about 12–15% of their value every year, used cars have already taken their biggest depreciation hit (the one that happens when they leave the dealership—see Buying a Car), and they cost less to insure.
Some people aren't willing to buy used because they're afraid of getting stuck with a lemon. This concern is understandable (it's happened to both me and my wife), but you can reduce the risk by being a smart shopper. If you feel more comfortable buying from a dealer than a private party, consider a certified used car. These may cost a little more than other used vehicles, but they come with a warranty