Buying a New Car
Buying a new automobile is an expensive purchase. To make a good decision when you shop for a new car, follow these tips
- Do some research first. Research makes and models before you head to the dealership. Check www-odi.nhtsa.dot.gov or call 1-888-DASH-2-DOT to see if a vehicle has safety problems reported to the National Highway Safety Administration. Find out the invoice price (lowest price) of the model and the options you want at Internet sites like www.nadaguides.com and www.edmunds.com.
- Set a budget and stick with it. Figure how much you can spend on a new automobile and stick with it. If you plan to finance your new car, compare rates from several lenders and make sure you can afford the monthly payment. Don’t agree to bigger payments than you can make.
- Read advertisements carefully, especially the fine print. If a certain model is offered at a very low price, make sure it includes freight and any additional costs like dealer markup or options. Advertised prices usually do not include taxes, license and title fees.
- Test drive the vehicle. Drive the car on different types of roads and for long enough to check the acceleration, braking, steering and stability. If there are certain features that are important to you, such as the navigation system, make sure they operate the way you desire before you buy the car.
- Learn the terms. Understanding the difference between terms such as “base invoice price,” “manufacturers suggested retail price” and “dealer sticker price” are critical when it comes time to negotiate what you’ll pay.
- Pick your options carefully. Adding options will increase your total cost, so make sure you really want or need the options you select.
- Beware of ad-ons. The dealer may try to add-on certain charges, like service contracts, documentary fees, extended warranties and credit insurance. Look at these carefully to make sure you don’t buy anything you don’t want or need.
- Negotiate the price. Negotiate up from the invoice price, not down from the sticker price. Markups from the invoice price vary from model to model and dealer to dealer. Visit several dealerships and compare their final sales quotes to get the best price.
- If you have a car to trade in, find out its value before you go shopping. Consult the “National Automobile Dealers Association (NADA) Official Used Car Guide,” which is available at www.nadaguides.com and at your local library, bank or insurance agency. Negotiate the best price on the new car you plan to purchase before you negotiate the trade-in amount
- Don’t be pressured to buy a car. Don’t sign a contract or pay a deposit unless you are ready to make the purchase. If you aren’t ready, tell the salesperson you need time to consider the offer. If the salesperson continues to pressure you, leave.
- Read and understand the contract before you sign it. Loan terms are often complex and may include extra fees that make the real cost to the borrower difficult to decipher. If the deal is being financed by the auto dealership or a lender solicited by the dealer, make sure the contract states the interest rate, also known as the annual percentage rate (APR). It should also contain everything you and the dealer have agreed upon. Don't rely on verbal promises, and never sign a contract that contains blank spaces.
Remember that the dealer must maintain the dealer’s tags and insurance on the vehicle until the purchase transaction is finalized.
- A contract is binding. Unless the contract specifically says otherwise, you can’t cancel it once you and the dealer have signed it. Make sure the contract states that you can void the agreement and get back your down payment if the dealer does not meet any part of the agreement.
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If you have a complaint about auto sales contact us
for help or call toll-free within North Carolina 1-877-5-NO-SCAM.