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10 Tips

How to buy a new car in a down economy

By Times staff
© St. Petersburg Times
published March 16, 2003

Especially if you're on a tight budget, this may seem like a foolish time to consider buying a new car. But bargains can be found in a slow economy, when car sales are down and auto dealers' inventories aren't moving. It's still necessary to do plenty of homework and legwork to find a good deal. Consider these tips.

1. Be open to new ideas. Take the time to consider different makes and models of vehicles. Recognize that this may be an excellent time to downsize to a smaller and more economical vehicle.

2. Do your homework. Extensive pricing information and reviews are available for new and used cars through Kelley Blue Book (www.kbb.com), Edmunds.com (www.edmunds.com) and Consumer Reports (www.consumerreports.org). (Consumer Reports charges a small fee.)

3. Look around for a good loan. Low-interest financing likely is available through the auto dealership, but it's a good idea to compare the annual percentage rates, or APR, and the length of several loans at your bank, credit union or motor club. Find out whether you will be hit with any fees if you pay the loan off early.

4. Arrive at the dealership armed and ready. Do enough advance research to know: which car model you want; which options you might want; approximately what the dealer paid for the car; a decent trade-in price if you're trading in your vehicle; and whether you plan to opt for prearranged financing or financing through the dealership.

5. Look beyond rebates and low-interest financing. Such perks can be good deals, but it's also important to be sure the car is a good fit for you and your family and has performed well in safety-related driving tests.

6. Don't put too much emphasis on the monthly payment. Determine what the true price of the vehicle will be. The total amount you will pay hinges on the car price you negotiate, the length of the loan and the loan's APR.

7. Shop around. Many car shoppers make the mistake of visiting only one dealership. Instead, get price quotes from three or four. Tell all of them that you're shopping around and you plan to do business with the dealership that provides the lowest quote.

8. Be specific about what you want. At each dealership, ask for the lowest markup over the car's invoice price. Write down all the figures you're quoted, then leave. Say you'll be back if this is the best price you can find.

9. Don't crack under pressure. Many salespeople will try to get you to buy a vehicle right away. They may offer a deal that's "only good for that day." Don't allow high-pressure tactics to prevent you from shopping around.

10. Keep it simple. In your negotiations, stay focused on the car's purchase price. Discuss trade-ins, leasing, financing or rebates separately. It's easy to get confused, and possibly misled, if all those figures get muddled together.

-- Compiled by Laura T. Coffey. Sources: Consumer Reports (www.consumerreports.org); Florida Attorney General's Office (http://myfloridalegal.com/consumer); Better Business Bureau (www.bbb.org)

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