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New Car Buying Tips

NEW! Be sure to read How I Bought A Popular New SUV for $3,611 Below Dealer Invoice.

The most important new car buying tip: do your homework before buying a new car. Learn all you can about dealer tricks because they can quickly erase any discounts or other savings that you think you're getting. Car dealers spend millions of dollars training their salespeople to get more money out of customers, and if you don't know the tricks they use, you could be overcharged by thousands of dollars. Find out the dealer's real cost on the car (it's typically less than invoice) and the prices that smart shoppers are paying for that car, then research any other items you might want (loans, extended warranties, car alarms, etc.). Shop around for competitive auto loan (or lease) rates at banks, credit unions and lenders on the Web. When you find a great interest rate, get pre-approved at that lender before you start negotiating with dealers. If a dealer can beat the rate you found, let him finance the car -- on a "simple interest" contract only. Otherwise, stick with your pre-approved loan. And don't forget to shop around for insurance before you buy that new or used car, or you may be in for a shock. To save you time and money, we've listed the best places for you to get free quotes on new or used cars, auto loans, car insurance, extended warranties and more. (Keep reading...)

When your homework is done and you're ready to buy, you start the negotiating process -- where dealers quote prices and you make counter-offers. If you've done your homework properly, this process should result in less haggling -- and lower prices. To make dealers compete (and drive the price down), use the Internet to get at least five or six price quotes before you start negotiating with any dealers. When you get to the contract stage, make sure the dealer doesn't slip any hidden charges into your loan or lease. This is known as "payment packing." To avoid this common rip-off, calculate your own monthly payments using this online auto loan calculator. Finally, always negotiate the price of the car, not the monthly payment.

Money Saving Resources, Free Quotes has searched the Web to find the best new car buying (and leasing) resources. These resources are listed below, along with direct links to their sites.

New Cars & Trucks - Free Quotes. Are you looking for a new car or truck? Get free (no obligation) quotes from the following car buying services, then use those quotes to convince other dealers to lower their prices. If the other dealers can't beat the lowest Internet quote, you may have found the best possible deal on that car. For free quotes on new cars & trucks, use Edmunds,, and CarsDirect. To make sure you're not missing out on a better deal, get quotes from all three services!

New Car Rebates, Dealer Invoice Prices. Car shoppers can find rebates and incentive information, plus dealer invoice prices, at this Rebates and Incentives page. After selecting your vehicle for the rebate information, just click on the "Pricing" tab to get the dealer invoice price. To skip the rebates and go right to the Dealer Invoice Price, use this Edmunds Pricing link. This will also give you the Edmunds True Market Value™ price, which is the average price that is paid in your area for that vehicle. You do not have to enter any personal info here. Just remember, the real dealer cost is usually a lot lower than dealer invoice (at least $1,000 to $2,000 lower). Canadian motorists can get similar information on dealer invoice prices, dealer incentives, rebates and average dealer markup at

Used Cars & Trucks - Free Quotes. To get free (no obligation) quotes on late-model used cars & trucks, see UsedCarQuotes.

Auto Insurance - Free Quotes. Here's a great way to save money -- all the time! If you're in the market for a new or used car, be sure to shop around for insurance before you buy. Why? Because insurance on some cars can be a lot more expensive than others, so make sure you know ahead of time what it's going to cost. If insurance is too expensive for the model you wanted to buy, pick another model (unless you have money to burn). The easiest way to shop around for the best rates is to use Esurance. They offer free online quotes from multiple insurance companies using just one application. Depending on the state you're in, you could receive quotes from as many as four different companies. If you're not in the market for a new or used car right now, you can still use this to save money by moving your car insurance to a less expensive company.

Auto Loans - Free Quotes. If a dealer is not offering below-market rates, don't finance your car there. To help you shop around for loans with competitive rates, we've found several great online lenders. They have competitive rates on new & used cars, they post their rates online, and they provide quick service. They can also refinance your existing loan to lower your interest rate. Apply online during normal business hours and get a decision within 1-2 hours. After you're approved, you get a draft or check that you use to pay for the car. (If you are buying a car from a dealer and you don't know the purchase price yet, use the MSRP plus tax for the initial loan amount. Just be sure to negotiate a lower price.) Car shoppers with all types of credit (good or bad) can get quotes from CarsDirectAutoLoans and myAutoloan. Shoppers with good credit can also apply at up2drive (a division of BMW Bank of North America). All three sites have free, no-obligation quotes and online applications, so apply at two of them to make sure you're getting the best deal. While you're researching different cars, you can use this online car loan calculator to calculate monthly payments. (Use the invoice price plus sales tax for the purchase price, then subtract your down payment to get the amount financed.) Note: Be sure to read the Credit Report section below.

Auto Leasing & Buying Software. Expert Lease Pro can save you a pile of money on your next lease or purchase. This easy-to-use program will help you make the right lease vs. buy decision, avoid overcharges and negotiate a better deal. Calculates payments, reveals true APRs on leases, provides MSRP, invoice and residual data on all new cars & trucks. Warning: Dealers use computer programs to manipulate the numbers and increase their profits on new and used car transactions. If you don't have your own program to figure out what's going on, you're a prime candidate for the "payment packing" scam. (See the KCBS story on our front page.) To prevent dealers from slipping hidden charges into your lease or loan, calculate your own payments before signing any contracts. Click Here for Expert Lease Pro.

Used Car Vehicle History Reports. Don't buy a used car or truck without checking its history first. Has it ever been salvaged? In a flood or a major accident? Odometer rolled back? Was it a lemon buyback vehicle? Did it have a branded title? How many owners? Find out in seconds when you order a VinAudit Vehicle History Report online.

Credit Reports. If you don't know what your credit report looks like, get a copy of it before you apply for financing. This will give you a chance to correct any mistakes that may be in your credit file. Why is this important? Because "blemishes" on your credit will prevent you from getting the lowest possible interest rate on a loan. Never agree to a higher interest rate at the dealer without checking your credit report first to see if the higher rate is justified. And shop around for a better rate, of course. You can get your credit score for free at CreditKarma and you can get your complete credit report (for free) at AnnualCreditReport.

Extended Warranties If you're shopping for a new or used car, you will probably be pressured to buy an overpriced extended warranty. Should you consider buying one? And how much should you pay? Before you buy one though, you would be wise to do some research. Most financial experts say to avoid them because the odds are that the warranty will cost more than the repairs that you will need. Some people find that the warranty wasn't even needed because their new car didn't need any repairs at all. Here is a great article on this subject: Are Extended Warranties Worth It? If you decide to buy one, don't pay those high dealership prices just to get some peace of mind. You can usually find a good deal at CARCHEX, a 20-year-old company with an A+ rating at the Better Business Bureau.

Car Buying Tip: Be sure to visit our How To Buy A New Car page, where you will learn the best new car buying strategies for getting huge discounts on new cars and trucks. And see our Car Buying FAQ page for answers to the most common questions asked by new car buyers.

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