Question of the week:I'm ready to upgrade my old clunker to something much classier, but am dreading the whole process. I'm not even sure if I should buy or lease. How can I make sure I'm getting the best deal? --BMW Fan
Dear BMW,
Buying from a dealer, buying from a private owner, paying cash, financing or leasing-as you know, there are many options. Here is what has worked--and hasn't worked--in the Armchair Millionaire community:
Buy quality used. "We buy cars that are two to four years old because they offer the best value. We use the Blue Book--available at libraries--to determine the exact value of the car so that we don't over pay." --Mike
Buy direct from the owner. "I search the classified ads because buying from private owners usually means that you get a better history of the car. Private owners also seem more willing to negotiate price." --Norris
If you have to have a new car every couple of years for personal or business reasons, don't drive more than 15,000 miles a year, and can't stand the thought of having to deal with selling your used car, you might consider leasing.
Lease it. "I lease because I want a reliable car for family trips and a new car every three years. I figured I'd have a payment anyway, so why not lower it through leasing?" --Andy
Be warned. "I just got out of a lease--what a mistake it was! I'm going to end up owing $1,500 for what they called 'excessive wear and tear.'" --Mitch
If you do choose to go ahead and buy, use my checklist of common sense tactics for ensuring that you get the best possible offer.
The Armchair Millionaire's Checklist for Dealing With Dealers
Know the price. Start your negotiations from the price on the factory invoice, not from the manufacturer's suggested retail price (also called the "sticker price"). There are Web sites that will help you find out the factory invoice on the car, such as Edmunds.com and consumerreports.org. While the factory invoice is often not the dealers' real cost--they usually pay less after incentives from the factory--it can serve as a good reference point for comparing different dealers' offers.
Beware of hidden charges. "Floor charges," "dealer preparation charges" and "document preparation charges" are all ways for dealers to sneak in a bit of additional profit on each car. Do not pay them.
Think twice about buying an extended warranty. Many new cars are very reliable these days and come with their own manufacturer's warranty, so this is one high-cost item you could easily skip.
Don't assume that the dealer will offer the best financing deal. Check with local banks, your credit union, and on the Internet for loans that offer the best terms and interest rate. And get pre-approved for a loan before you start to shop. That way, if the dealer wants your financing business, he'll have to beat the deal you already have.
THE BOTTOM LINE: Everyone loves getting a new set of wheels, but many become so enamored of that shiny chrome that they may abandon good common sense in the process. Use smart strategies for sticking to your price. Over the last five years, the World Wide Web has turned the tables on car dealers. A little information gives you a lot of leverage.
Today's in market lot of best deals are there in http://themotoring.com
Posted by: Account Deleted | September 27, 2011 at 10:13 AM