MONEY48 KIPLINGER’S PERSONAL FINANCE^ 05/2017they would be if you were to finance
the same vehicle.Prepare to negotiate. Your online re-
search will clue you in to what others
are paying for the car you want, and
you could shoot for an average of those
transactions—your target price—as a
fair price you could pay without regret.
If you want a spectacular deal, you’ll
have to spend more time. “It’s going
to take calling dealerships and asking
them for a price quote,” says Montoya.
After you’ve done your best to dicker
via e-mail and phone and it’s time to
go to the showroom, a few truisms of
negotiating still hold true: Consider
bringing a helper (my wife is the bad
cop to my good cop), and don’t go when
you’re hungry or pressed for time.Or let someone else do it. TrueCar (which
powers Consumer Reports and USAA’s
services, among others) and Costco’s
Auto Program offer prenegotiated dis-
counts—off of MSRP. That will get you
a fair price, with added hand-holding.
But you will probably get a better deal
if you pay a pro to do the work of call-
ing dealerships and making them com-
pete for your business. Carbargains.org,
which charges $250, has been doing
this for decades. Also take a look at Carjojo.com, which
tracks inventory, price and behavior data on new models
to help you negotiate a good price. Or you can hire its
negotiators to seek dealer bids for $199.Mind the extras. Your next stop after agreeing on a price is
the F&I (finance and insurance) office. At this point, it’s
wise to note that dealers sell a lot more than vehicles. Be-
sides a loan, you’ll be offered myriad extended warranties
and add-ons. Part of the appeal is that you can roll these
extras into the monthly payment, but don’t automatically
agree to the asking price for these items. If you really want
something, negotiate. ■LISE METZGERDAVID MUHLBAUM Drive TimeHow to Get a Great Deal on a New Car
T
he internet has disrupted many
industries, but it has left the new-
car-buying process largely intact.
At the end of the day, it’s still likely to
be you and the dealer dickering over
details such as paint coatings and f loor
mats. But that doesn’t mean you can’t
use the internet to get a better deal.Do your research. Right, and eat your
veggies, too. But here’s where the inter-
net has really paid dividends: Not only
does each manufacturer provide oodles
of information on their models, but
sites such as Edmunds.com, Kelley Blue
Book and TrueCar let you configure a
vehicle exactly as you want it and price
it that way. The best new-car deals now
are for compact and midsize sedans,
and carmakers are trying to move them
with generous incentives, particularly
low-rate financing. Generally, from
Labor Day until New Year’s weekend, as
the new-model-year vehicles roll in and
dealers try to clear out last year’s mod-
els, the deals get sweeter and sweeter.Line up financing. Dealers have access to
low-rate loans from manufacturers and
may be able to offer rates that a bank or
credit union can’t beat. But you’ll be in
the driver’s seat during negotiations if
you have financing to fall back on. Keep the loan term
as short as you can, says Ronald Montoya, of Edmunds.
Going long (say, more than 60 months) to keep the pay-
ments down can significantly raise the total interest you
pay and increase the time you’ll be “underwater” on the
loan (owing more money than the car is worth).Consider leasing. If you must have new-car f lash but don’t
want to be shackled to a big loan, consider leasing. Leasing
can make sense if you trade in often enough that you al-
ways have a car payment. Leases on luxury cars, large
SUVs and pickups have been especially popular because
their residual values—what the vehicles are projected to
be worth at the end of the lease—have been optimistically
high. So the monthly payments are more affordable thanYou’ll be offered
myriad extended
warranties and
add-ons. But don’t
automatically agree
to pay the asking
price. Negotiate.
YOU CAN FOLLOW DAVID MUHLBAUM’S AUTOMOTIVE MUSINGS ON TWITTER AT WWW.TWITTER
.COM/DAVEYDOG.