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26 Sep 08 How to Get Best New Car Deal in 30 Days Without Headache (1)
Check car price on cars you might be interested in. It is pretty important as sometimes you would find ridiculously huge incentives, rebates or hidden dealer cash going on some vehicles with high MSRP that you usually don’t want to take a look at. With huge discount, you might be able to afford a dream car that you would normally dream about, rather actually own the car. Even if you have made up your mind on some cars or even some trims, check if there are different rebate, incentive or dealer cash available on different trims. For example, if the higher trim of the car you are looking for has a higher invoice price of $1500, and if car maker gives $1000 more incentive on the higher trim, you actually pay only $500 more, or even less due to higher model usually hard to be sold. However, for $500 more, you would get difference of $1700~$2000 in MSRP, which could be sun/moon roof, better audio system, better interior material, bigger wheel and wider tire for only $500 more. Why not going for the higher trim if it is just a little bit higher
It is time for test drive once you target models. Let’s say you are targeting 3 cars after the basic homework. Try to bring 1 or 2 friends with you. The reason you need friends is unless you are able to talk with salesperson while testing the car, you need people to help you handle salesperson so you could focus on what you are doing. Dealers usually only allow people whom they think would buy the car to actually drive the car. However, spending minimum of 15~20k is a huge purchase for most people so money should be used wisely so you would not regret. Therefore, you should make your salesperson feel you would purchase the car today in order to test the car, but do not tell him/her from your mouth. For example, mostly your salesperson would ask you that if you would make purchase today. When you are asked these kinds of questions, tell them you work hard to make money, so you need to test drive the car first before making any decision. Ask car salesperson to let you drive highway if you mostly use your car on highway, and city road otherwise. Keep one thing in mind that if you are given a new car with very low mileage, test what you need, do not abuse the car since dealer might sell the car to other people. However, if it is a car for test drive, just have fun there.
After testing all cars, it is time to think about what car is the one you love. Put price, gas consumption and all other expenses aside, and ask yourself that what the right cars are. Some people might consider the price and all other factors first, but it could have potential problems, which will be addressed later. Does the car#1 have good handling I like? Is car#2 quiet as I am looking for? Questions like these will help you to determine the “best” car for you. The reason not to consider price and all other financial factors is that you have already filtered out cars in the first step, so the candidates are those you are able to afford, even though some might be a little bit harder for you, but you still could afford it. Most people would drive the car for at least 3~5 years, how if you regret the purchase after 3 months, what could you do? There are two simple ways to deal with it. Trade the car back to dealers and purchase a new one or stay with it. If you decide to go with the first option, you would get ripped off badly as new car depreciates a lot. If you go with the latter option, you would hate the car more and more. Hey! You should enjoy your car because you work so hard to save money for your new car and you are not supposed to spend so much money and make yourselves feel bad, aren’t you?
Tags: Car Buying Tips, Car Price
14 Sep 08 Top Keywords You Need to Know Before Car Purchase (4)
Taxable Amount: The amount that is subjected to sales tax. This amount is equal to the “selling price” shown on the invoice with all options either requested by car shoppers or added by dealers. Keep in mind that if there is any rebate on the car, the “selling price” shown on the invoice would be the price before rebates since in some states, rebate is taxable.
Documentation fee, Credit inquiry fee: Let’s save our time. Documentation fee, credit inquiry fee, Prep fee and all other fees are nothing but pure profit for dealers. For some regions, these kinds of fees could be as much as $900 or $1000. Do you really think dealers need $900 or $1000 to do your paperwork? In some States, state law caps doc fee so dealer could not charge more than certain amount. For example, in New York, dealers could not charge more than $55 doc fee in car purchase. However, New Jersey, NY’s neighbor, it is not easy to find a dealer to charge doc fee less than $199, and some dealers even charge $399. Therefore, since documentation fee could be a major difference, in CarPriceDatabase.com database, doc fee is added into total amount when we calculate your CPD amount(will explain later), monthly payment, and car price. It gives a more accurate comparison between different quotes and prices.
Sales Tax: Sales tax is what needs to be paid to U.S government. Basically it is the taxable amount times the sales tax rate. Since it is the amount given to U.S. government, dealers do not play tricks on this. However, make sure dealers calculate the figure correctly. In some states, sales tax is capped to certain amount.
Gas Guzzler Tax: This tax was established in The Energy Tax Act in 1978 that if new cars sold do not meet EPA requirement are subjected to this tax, which is collected by IRS. Gas Guzzler Tax is determined by the combined EPA on your car, which is listed on your window sticker. The amount of the Gas Guzzler Tax is also listed on the window sticker. Keep it in mind that SUV/Trucks are exempted from Gas Guzzler tax according to the act.
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GAS GUZZLER TAX |
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Combined EPA |
Tax |
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Less than 22.5 |
No tax |
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More than 21.5, but less than 22.5 |
$1,000 |
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More than 20.5, but less than 21.5 |
$1,300 |
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More than 19.5, but less than 20.5 |
$1,700 |
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More than 18.5, but less than 19.5 |
$2,100 |
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More than 17.5, but less than 18.5 |
$2,600 |
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More than 16.5, but less than 17.5 |
$3,000 |
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More than 15.5, but less than 16.5 |
$3,700 |
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More than 14.5, but less than 15.5 |
$4,500 |
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More than 13.5, but less than 14.5 |
$5,400 |
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More than 12.5, but less than 13.5 |
$6,400 |
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less than 12.5 |
$7,700 |
Registration Fee: The fee is charged by state department of motor vehicles for your title (ownership) and license plate.
TTL: Title, Tax and Licensing. It is all the money given to U.S. government. Therefore, price before TTL is a good benchmark for the car price as it includes everything dealers try to make from you. Like mentioned earlier, dealer could charge you a huge amount of documentation fee but have a slightly cheaper car price. Price before TTL is very useful when comparing price with people in different area or with different registration and tax rate. Please be aware that TTL is not supposed to include dealer documentation fee. Some dealers might trick you by giving you a price before TTL but then tell you TTL includes dealer documentation fee.
OTD Price: Out-The-Door price. It is pretty straight forward that the amount represents the amount of money you need to pay to drive the car out your door. It includes both the money collected by dealers, selling price, all kinds of fees, options you either want or does not want, and TTL. OTD is very useful when you compare price with people in the same area as they need to pay for the same rate of sales tax, local tax and registration.
In general, there are only two kinds of money you need to pay for your car purchase. One part is paid to government, while the other is to be paid to dealers. Therefore, anything other than TTL is to be given to dealers.
VIN: Vehicle Identification Number. It is a unique serial number for each car. With this number, the history of the car, specification can be identified. Since it is unique, when you negotiate price with dealers, try to get the VIN from them as you could make sure they do not make any “mistake” to quote you the wrong trim or even model. Besides, you could use that VIN to request insurance quote for a very accurate quote.
Tags: Car Buying Tips
