New Car Prices
New cars sitting on dealership lots are priced much higher than what you can expect to pay if you are a good negotiator.
Base M.S.R.P. is the Manufacturer's Suggested Retail Price without special options.
Trade-in allowance is an amount granted for your old car that will be deducted from the cost of your new car.
Factory-to-Consumer Rebates are discounts on certain car models and styles that are not selling well; they want to move these cars off the lot, so they reduce the price.
Negotiate Your New Car Price:
Don't be afraid to speak and negotiate. Car dealers make their living with this skill. To save hundreds or thousands of dollars, you can be strong for one day of your life and negotiate, even though this may come at great discomfort to you. Think of it as a challenge. The day you go to buy a new car, be informed and ready for the fight. M.S.R.P. is the starting ticket price; you want to reduce it a few thousand. Find out what the car wholesale price is and add several hundred dollars (or thousands for high-end cars) for the auto dealer's commission -- that is a fair price.
New Car Price Warnings
Like any good sales person, the dealer will try to throw in as many additional services and items as they can; don't let them. Get only what you need. Pay attention to the paperwork and what is written on it. Don't let a good job of negotiating be undermined by missing the fine print.
Other Options:
For a lower price, you can buy your new car with cash from a home equity loan.
Consider New Car Price in Relation to Depreciation:
Certain cars lose their value more rapidly than others. If the car you have your heart set on is a car that depreciates quickly, you have even more reason why to negotiate a lower price. If you plan to sell your vehicle, its expected depreciation value is something you really need to think about when you select and negotiate for a new car. The price you pay will matter greatly a few years later when you are trying to sell. If you can get a great deal when purchasing, and then sell high, this is the best case scenario.
Kelley Blue Book:
The Kelley Blue Book has been the automotive pricing reference guide for 75 years. When you are shopping for a new car, see what the free market value of your car is estimated and how the brand and model depreciate.
Negotiating a new car price can seem daunting for many people, but know what you want and be determined to get it and a fair price that you can feel good about when you drive home.
