The last question you want to ask as you drive away in your new vehicle is, "Did I really get the best deal on my new car?" To save yourself that uncertainty, it's important to educate yourself about financing and the actual car buying process.
To help you dig a little deeper into your research, we're listing 5 Harrisonburg new car buying tips to help you get you the most value for your purchase.
Research Price Range
You might have noticed that there are two pricing terms at any dealership, invoice price and manufacturer's suggested retail price, also called MSRP.
As a reputable Harrisonburg auto dealer, Joe Bowman new cars follow those same pricing guidelines, too. Here's what that means.
Invoice pricing is how much the dealer paid the manufacturer for the vehicle. It can include destination and delivery fees. The dealership's profit is the difference between the sales price and invoice price.
However, because manufacturers offer discounts, rebates, and other selling incentives, the actual amount the dealer makes may be more than the difference between the invoice and sales price.
The sticker price, or MSRP, is what the manufacturer thinks the car should be sold for. Dealerships are required to display that price, but it can also choose to sell the vehicle for less or more.
Both Kelley Blue Book and Edmunds lists both the MSRP and invoice price. And they also list the fair market value of both new and used cars.
The fair market value is simply an estimate of what a consumer should expect to pay based on the vehicle's features, make, model, and so on, as compared to sales of similar vehicles.
Car Loan Pre-approval
If you're planning on financing your vehicle, it's wise to get pre-approved for your auto loan. Pre-approval is a conditional approval that lets you know how much you can afford to buy, the terms, and interest rate.
But first, you must know the estimated cost of the vehicle you want to buy.
Once you've determined the price range, your lender can include:
• The actual amount of money you can borrow
• Loan term
• Interest rate
While getting pre-approval doesn't guaranteed loan approval, it does let you know how likely you're to be approved and how much you can borrow.
Please note that an application for pre-approval can result in a hard inquiry on your credit report.
Negotiating Your New Car Price
Negotiating is sometimes uncomfortable for people, but it is a skill worth learning! What makes negotiating more comfortable is preparation.
Again, do your research on the price range, so you know how much negotiating to expect. If you're financing through the dealership, or you want to trade in your old car, do that separately.
Focus first on the price of the new car. If you're on a tight budget, you may need to look at monthly payments first and extending the loan terms. That means a longer repayment period and paying more money over the long haul.
Know in advance the terms and monthly payment you're comfortable with. Then go with it! Don't buy more car than your budget can handle.
Be aware that just like buying a new home, the final cost of the vehicle is not the sticker price. In real estate, there are closing costs.
In car buying, there's the "out-the-door" price. That means you'll need to factor in these additional costs:
• Destination fees
• Title and registration fees
• Sales tax
• Destination fees
Do You Really Need All Those Extras?
Only you can decide if you need an extended warranty, prepaid maintenance plan or other upgrades. Add-on's such as these are nice, but make sure you really need them before adding them to your monthly payment.
Timing is Everything
Like every retail business, there are up times and down times to buy. To get the best deal on your new vehicle, watch for holiday sales and end of a model year sale.
Dealerships will sometimes run specials when they need to meet an annual quota or move inventory. This can work in your favor!
Don't drive away from a dealership wondering if you got the best possible deal. Do your homework and follow these Harrisonburg new car buying tips. Every time you step into your vehicle, you want to smile instead of growl!
At Joe Bowman Chevy, new car sales are a part of our everyday life. Our experienced staff can answer all of your questions and help you get into the vehicle of your choice with ease.
And our service department is second to none.
