|
An elderly man was driving his Buick down the freeway when his cell phone rang.
Answering, he heard his wife's voice urgently warning him, "Herman, I just heard on the news that there's a car going the wrong way on 280. Please be careful!"
"It's not just one car," said Herman. "It's hundreds of them!"
I actually learned to drive on an Edsel that looked remarkably like the above. Yeah, they were considered ugly, even in the early 60s.
Much of our live revolves around the automobile. Let's look at a process for a professional to find the best deal.
Find your car and options
Look at auto websites for the various models and options available for the cars you may wish to test drive.
Join Consumer Reports online for either $5.95 for a month or $26 for a year. This is your most valuable $5.95 ever spent. You'll see why as we go along......
Go online to Consumer Reports to look up reliability ratings. Most dentists don't do this step and end up with a German auto that runs great for a couple years, then spends many lonely nights in the shop. BMW, Mercedes, and Volkswagen have had average to poor reliability ratings for the last decade. Likewise, not all Toyotas have great reliability.
Take test drives at the dealers of the models you are interested in. This part is really fun these days because you will not even think of purchasing at this point. You will deal online almost exclusively.
Make a short list of the autos and options you are interested in.
New Cars
Order a New Car Price Report from Consumer Reports. You will receive bottom-line prices for all factory-installed options and all packages. Most importantly, you will also receive dealer incentive and holdback information not found elsewhere. Yes, you may be able to purchase below dealer invoice! This step is a must for everyone.
Also order a trade-in report from Consumer Reports, whether you plan to trade in or sell your old auto privately.
CR also now offers a free new car pricing service for subscribers. Certified dealers will send you quotes for the exact auto(s) you are interested in. You can compare to your invoices.
New car reports are $14 for the first and $12 for each additional. Used car reports are $12. Click here or call 1-866-528-8742.
USAA offers a similar service for new and used cars. Free membership is available for the service. Financing may also be available from USAA.
Costco also provides a service for new and certified pre-owned cars.
I've heard good reports from all of these avenues.
For either the USAA or Costco programs, having the Consumer Reports New Car Price Report is still a must, as the report details dealer discounts and incentives not found on other pricing reports.
Remember to always deal from the CR dealer bottom line price. Pay no attention to the sticker price. Laugh at "Reduced $2,000" stickers.
Once you've chosen the dealer with the best price, no matter which of the programs above you use, or whether you deal on your own, you can still haggle the price. You are under no obligation to accept the dealer's price offer. Of course, you do need to provide some profit, normally in the $500+ range.
After coming to a price, you go to the dealer, sign the forms, and take your vehicle home!
Trade-in? Discuss only after you have finished all else. You have your pricing report on your vehicle, so know the range to expect. Normally the dealer will severely low-ball you. In that case, walk out. Auto Trader works well today for personal selling of vehicles.
One final note: always secure financing through your bank or credit union. You will never get the best deal from the dealer.
Used cars
Test-driving isn't as simple, yet many "like" vehicles are found at dealers' used car departments. I prefer to test-drive at the dealers, rather than with private parties, as often you may find more than one car to test at a dealer.
For pricing, I use NADA found at http://www.nadaguides.com/Cars. An easy menu guides you to proper pricing with various options and mileages.
To find your auto, you may use one of the above services from Costco or USAA, or use AutoTrader.com. AutoTrader is easy to negotiate to find a vehicle anywhere in the US. Private, dealer, and "dealer certified pre-owned" are all listed. For autos with under the basic warranty mileage, normally 36,000, being "certified" isn't important.
I'm a big fan of buying the two-year old used vehicle. Many one-year old vehicles are from the rental agencies and may be fairly beaten-up. You can find if an auto has been a rental on the Car Fax certificate, normally found with other vehicle information on AutoTrader. Anything but a rental is fine to purchase. I've bought corporate fleet vehicles in the past with great success.
If you look at private vehicles, always have a mechanic check. This may cost $50, yet is well worth it. For dealers, I don't think necessary if still on warranty.
I normally will buy at a dealer, as they tend to detail the vehicles better and are under at least some local scrutiny.
Certified pre-owned? There are two types of certified pre-owned vehicles: ones that are backed by the manufacturer and ones that are certified by a private party. Watch out for dealerships and independent used-car lots that simply slap a "certified" sticker on a windshield, then try to pass that vehicle off as having gone through the same checks dictated by a manufacturer's program.
Buying "certified" is OK, but I think overkill for newer models. I've never bought "certified" and never had a problem. It adds $500-$1,500 for non-luxury cars and up to $4,000 for luxury autos. If an extended warranty is included in the extra price, it may be worth considering.
Let's now look at how one may save a bundle on an exotic masterpiece.
The new 2011 Mercedes SL 550 Roadster may be yours for a mere $100K. Would I ever recommend to spend that much? Sure, if you pay cash and still fully fund your retirement plan.
At the NADA website, I found a 2008 Mercedes SL 550 in clean condition with 30,000 miles would be dealer priced for an average of $56,000. It has depreciated $14K per year those first three years! Ouch! In researching further, I found that if you kept the car ten years, it would be worth about $14K in 2021. In other words, it will only depreciate $4K per year over its remaining lifetime.
Why buy a great looking car for $100,000 that will be worth $90,000 off the floor and $80,000 in a year when you can get a beautiful one still on warranty for 45% discount?
This is only a short primer on car purchasing. Several other areas of research were not included. Please go to Consumer Reports for a full guide on purchasing an auto.
| 
