3. "You'll get a better deal from the Internet department."
Most car shoppers use the Internet to do at least some of their research. When it's time to buy a car, though, the majority still head to dealerships to match wits with salespeople.
What people typically don't understand is that the car buying is more transparent, and salespeople have more authority, in the dealerships' Internet departments, Reed said. You don't have to cool your heels in a salesperson's office for 45 minutes while he or she "checks with the boss" on every aspect of your negotiation.
The Internet department salespeople know what the bottom-line prices are for the cars they sell and usually are authorized to cut deals without checking in with superiors.
You can take advantage of this setup in two ways. From the comfort of your home, you can solicit lowest-price quotes on a car from a bunch of dealerships at once. Or, if you insist on going to a car lot, you can simply ask for the Internet department when you walk through the doors and skip the usual hustle.
4. "Knock yourself out negotiating a good price; I've got plenty of other ways to skin you."
Price is just one of the many moving parts of the typical car deal. Three other important factors are:
- How much you get for your trade-in.
- How much you'll pay for financing.
- Whether you'll fall for any of the expensive add-ons that dealerships like to sell.
The add-ons -- paint sealant, car alarms, rustproofing, gap insurance and so on -- are huge profit centers for dealerships, Reed said. For example, a dealership might charge $300 for "fabric protection" that you could do yourself in a few minutes with a $5 can of Scotchgard.
"I can't think of anything that's an add-on that you couldn't do better (on price) by getting it later, on your own," he said. "The one exception may be the extended warranty."
Consumer Reports has long warned against buying extended warranties on most products, including cars, saying they're expensive protection against unlikely repairs. But some buyers like the security of an added layer of assurance, Reed noted. Still, you may be able to get an extended warranty for a significant discount by shopping around.
You also should know the trade-in value of your current vehicle so you don't get lowballed. Most car-comparison sites offer some kind of appraisal calculator; use a few different ones so you have a ballpark idea what your car is worth. If you want to get the maximum value for your car, you should sell it yourself, but you should compare the typical "private party" sale price to the trade-in value to decide if it's worth the hassle.
One simple way to boost the value of your trade-in is to make sure it looks good.
"Taking it to a car wash on the way to the dealership can do a lot for the value of the vehicle," Schaffels said.
If you aren't paying cash for your car, you should know that dealerships routinely mark up the interest rates on the loans they get from their warehouse lending sources.
To make sure you get the best deal, arrange a loan with your credit union or bank before you step onto the lot. If the dealership can give you a better deal, you can cancel the other loan. If not, you'll at least have financing at a reasonable cost.
5. "That great deal we advertised? You won't get it."
You typically have to have good to excellent credit to win those low-interest loans that dealers and manufacturers advertise. Exactly how good your credit needs to be varies by the deal and often isn't disclosed in advance.
Equally elusive may be the base model of any car design. Manufacturers may tout the low cost of a new car, but chances are, they're citing a stripped-down model that you're unlikely to find at any dealership.
"The dealerships aren't going to have the base model on the lot," Schaffels said. "That's just a teaser to get you in the door."
You can always order a stripped-down model, of course, and then wait six to eight weeks for the vehicle to be delivered. But Schaffels said dealerships are less willing to dicker on custom-ordered cars than they are on the vehicles already on their lots.
Likewise, most manufacturers have "build your dream car" features on their sites, but just because you design a certain configuration of features doesn't mean you'll find your ideal car on any lot. You'd be smart to figure out in advance which features are must-haves and which aren't essential, with the idea of avoiding vehicles that have a bunch of unwanted features inflating the price.
As always, the key to a smart car purchase is to do plenty of research before you ever talk to a car salesperson.
"The more prepared you are before you go shopping," Schaffels said, "the better off you're going to be."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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