The Fast Lane to Car Buying

Buying the Right Car

New-car buyers must have a clear understanding of both their means and needs before they even step into a dealership. Common sense can help determine both.

When it comes to “means,” never devote more than 20% of your income to monthly car payments and the shorter the total payment period, the better. Also, put as much down as possible and if you have an old car, don’t trade it in. You’ll get more money by selling it yourself.

“Needs” are a little more complicated. There is no formula for the perfect car search, but there are successful strategies. Start your search with a list of features that you need. First, think about the functional features, such as automatic versus manual transmission, four-wheel drive if you go off-road a lot, fuel-efficiency if you drive a lot, extra space if you’re hauling cargo or kids, and extra air bags and stability control if you’re concerned about safety. Then, you can list your “fun” needs, such as interior and exterior color, satellite radio, sunroof, extra cup holders and more. Once you get this list together, you can begin your research into the right car for you.

The importance of sound research when buying a car cannot be overstated. “You’ll never get a good deal if you don’t know what you’re doing,” says Remar Sutton, a renowned consumer advocate, president and co-founder with Ralph Nader of the Consumer Task Force for Automotive Issues and author of Don’t Get Taken Every Time: The Ultimate Guide to Buying or Leasing a Car in the Showroom or on the Internet. “If you have to ask many questions at a dealership, you’re in trouble already,” he says. Sutton suggests buyers never take a dealer’s word as certain. Why? “[Because] the job of every dealer is to maximize profit,” he says. Drivers should determine the market value of the vehicles they’re interested in before approaching a dealer. (“Market value” is the actual value, determined by both supply and demand, that a car is worth in the current market.)

Jessie Carrancio, a seventh-grade math teacher from Brooklyn, NY, used the internet to get information when she wanted to buy a new car, including the market value, MSRP (manufacturer suggested retail price) and resale and reliability information. “I solicited multiple quotes over the web and went up [to the best lot] the next week,” says Jessie. When getting her quotes, Jessie made sure the dealers knew they weren’t her only option. “They need your business and are often willing to negotiate a bit if they think you’re going somewhere else.”

If you don’t have to go directly to the dealer, some web sites will compile quotes from local dealerships. These quotes are often far closer to market value than sticker prices, because the internet sales representatives offering them know they have competition. Jessie found that anonymity afforded by the internet also stifled any bias a dealer may have against her otherwise. She purchased a new Honda Fit.