Cars
Your 5-Step Game Plan For Buying A Car
Use this tip sheet to help make the process a bit easier.
By Jessica L. Anderson, Associate Editor
From Kiplinger's Personal Finance magazine, May 2009
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1. Your top price. Run the numbers with our monthly-car-payment calculator at kiplinger.com/tools to figure out how much you can spend. Never reveal to a dealer your top monthly payment.
2. Financing. Get preapproved by your bank or credit union and know what rate you qualify for so that you can compare it with the rate the dealer's finance office offers you.
3. Target price. Look up dealer retail prices on Edmunds.com for each model you'll test-drive. Be sure to factor in options, mileage and the condition of the vehicle.
4. Competing deals. Arm yourself with printouts on similar vehicles from AutoTrader.com, Cars.com or the local classifieds. A competing offer is probably the best motivator for a seller to lower the price.
5. When to walk away. If something feels fishy or the price is too high, go to the next seller on your list. If you've done your homework, you'll know when the deal is right.
Reader Comments (1)
Posted by: Bob at 05/05/2009 09:37:06 AM
I agree with this article except for step 2. If you have to borrow the money look for a cheaper or used vehicle. I personally have only seen one time when a new car was cheaper than a used one based on cost per mile. I always pre-save for my next car. Rather than monthly payments I have a monthly savings plan. A dealer will often knock off several thousand more if (after negotiating the best deal)you ask for a cash deal. This article also did not offer any advice on trading in the old car. You need to accurately know its trade-in value and not accept anything less. Selling your old car yourself can also save you even more.