1. Buying a Car Points to Remember

2. What to do with your Used Car? 1. Sell it yourself (private party) – the way to make the most money and also the most trouble 2. Trade it into a dealer – you get less money, but it’s no hassle. 3. Donate it to charity – good for a tax write-off. Get it in writing.

3. Where to look for INFO: www.kbb.com - Kelley’s Blue Book www.kbb.com www.edmunds.com - Edmunds www.edmunds.com

4. Buy or Lease? - Buying Pros - you build equity - it’s cheaper if you keep it 3-4 years - it’s simpler to purchase - there’s no penalty for turning it in early Cons - if you sell in 1-2 years, you’ll be “upside-down” (that’s when you owe more on the car than it’s worth) - higher monthly payments than leasing - bigger down payment is needed

5. Buy or Lease? - Leasing Pros - no or low down payment - lower monthly payments - you can get a nicer vehicle for the price - you don’t have to dispose of the car Cons - you’re penalized for extra mileage - you can’t change the car at all - it’s more confusing and complex than buying a car - you don’t build equity in the car. (you don’t own anything)

6. Financing  Dealer financing – easiest to get, but often more expensive  Banks/Credit unions – often the cheapest interest rate, but harder to get. Banks can pre-approve you loan up to a certain amount, so you already know how much you can afford to buy before you go looking for a car.  Pay cash – this involves a lot of saving first  Do not ever co-sign someone else’s loan. If they stop paying on it, you are legally bound to pay for something you do not even have.

7. Cost Research  Look on several websites for information.  MSRP = manufacturer’s Suggested Retail Price  Invoice – Dealer’s “cost”  Dealer’s cost is really this: Invoice + advertising fees – Holdback – Factory to Dealers incentives. It is hard to find out the last one. Most holdbacks are about 3%, sometimes of MSRP and sometimes dealer invoice. Look on the internet to find your make’s percentage  Aim for a dealer profit of about 5% more than “D” shown above.

8. Extra Fees Options – you can often get these better and cheaper elsewhere (such as sound systems) “Processing fee” and “Preparation fee” – These are pure profit for a dealer. They may come in other names, and are there to inflate the dealer’s profit.

9. Buying the Car – Low Hassle  Buying Service – you get a final price right away from a group whose members buy cars. However, you have to be ready to buy right now, not in the future. These are only for people who are serious about buying a car.  No-hassle dealerships – all of the cars on the lot have the final price. You don’t have to bargain with anyone. But, it may be a higher price than you could negotiate elsewhere.

10. Buying the Car – Low Hassle  Brokers – You pay a professional to do the shopping and negotiating for you. But if you don’t like the deal, you still have to pay the broker.  The internet – you email back and forth until you are satisfied with the deal. You can deal with several dealers at one time, making them more competitive. Internet salespeople often are lower pressure than dealing face to face.

11. Traditional Buying ~ You have to negotiate your best deal on you own ~  When to go –  During the last few days of the month  During a sale  At the end of the day  During the winter months, except for 4WD or AWD vehicles.

12. Traditional Buying  Choose a vehicle  Find a vehicle you think will fit your needs. Look at the dealerships on a Sunday, if you don’t want any sales people around.  IF you can find a specific vehicle on a dealer’s lot, the salesperson will work more to negotiate with you than one that is special-ordered or one that they have to get from a dealer out of the area.

13. Traditional Buying  Go for a test drive. Call first. Anything over 200 miles on the odometer may have been used as a “demo car” and you should be able to get a better price for it.  Dress as professionally as you can. You’ll be treated with more respect and have an easier time negotiating with a salesperson.  Take your time and be prepared with a calculator, paper and pencil. Bring something to eat, if needed.

14. Traditional Buying  Don’t fall in love with a particular car. It will weaken your deal.  Keep your temper. If you lose your temper, you’ve given control to the salesperson.  Negotiate your best price. If you don’t like to do this, bring along a friend or relative who is experienced in this and will do a good job for you.

15. Traditional Buying  Keep the final price fair for both you and them. They will whine and moan and cry about what you offer them, but 5% profit over what it really costs is fair. J. If you feel pressured or intimidated, or cannot get the price you what, than them for their time and LEAVE immediately. Often they will offer you a better price on the way out or after you get home.

16. Closing the Deal  If there is damage or something to be done to the car, get it on the sales agreement in writing and do not pay for or sign for the car until these are completely done.  Ask for a disclosure of any and all damage to the car. They must be truthful if you ask them directly.  Add-ons –  You don’t need rust-proofing or undercoating  Extended warranties through the manufacturer are often expensive and not needed.  Extended warranties through a third party are usually worthless by the time you need them.

17. Closing the Deal  There is not three day cooling off period on vehicles. Don’t sign or pay for anything until you find that everything is as it should be.  Boring as it is, read ALL of the paperwork before you sign anything. Bring someone along to translate it into simple English, if needed. Don’t count on the salesperson being totally honest with you.