Things to remember when buying an Automobile
Buying an automobile can be an exciting experience, but it is important to remember
that while spending a considerable amount of money on any expenditure you should
be very careful. Below,
in no
particular order, is a summary of 10 key steps that you should consider
before
making buying your car.
1. How much do I really want to
spend?
Deciding exactly what you can afford is critical in making the buying process
easier and comfortable. For most buyers, paying for a new or used
vehicle is a monthly expense; so, first determine how much you can spend each
month on vehicle expenses.
Your process should take the following things into consideration: monthly car
payment, insurance payment, fuel costs and maintenance costs.
2. Can You Negotiate Your Pricing Terms?
Below are some things you should know well so you can understand the components
of your purchase price from your dealer.
Advertising Assessment Fee
A fee charged to a dealer by an advertising group to cover
the cost of local advertising and selected incentive programs. This
charge isn't reflected in the factory invoice of a given vehicle but, rather,
is assessed in addition to the factory invoice.
Destination Charge
A fee assessed by the manufacturer for the delivery of your new vehicle to
the dealership.
Invoice Price
This is the charge the factory assesses on the dealer for the purchase of a
new vehicle. It covers the wholesale cost of the vehicle only and doesn't
reflect all of the costs the dealer must cover to retail the vehicle to a
customer.
Manufacturer's Suggested Retail Price (MSRP)
The retail price of a vehicle as recommended by the manufacturer. Often called
the sticker or list price. If not otherwise noted or itemized, this price
also includes the destination charge.
Base MSRP
This is the MSRP for a given model, including all standard equipment. It doesn't
include any factory options installed.
Transaction/Cash Sale Price
The price or value of a vehicle as agreed upon between the dealer and customer.
This is the vehicle price before any trade-in allowance, down payment,
sales tax, registration fees, documentation or license fees are assessed.
3. How are You going to Pay for this Motor Vehicle?
Paying Cash
This is the method where you pay for the vehicle without financing
or a lease. While it's the most straightforward and simple method, this option
is usually not a possibility for most buyers and therefore is the least common
method of acquiring a new vehicle.
Purchasing with Retail Financing
There are generally two types of retail financing - obtaining credit through
your dealer or receiving a loan from a bank (or credit union).
Leasing
Leasing involves paying for the use of a vehicle for a specified length of
time - similar to a rental. As a result, the customer (lessee) doesn't actually
own the vehicle. The title remains in the name of the leasing institution
(lessor) unless the customer exercises a purchase option. Over the course
of the lease term, the lessee only pays for the use of the vehicle (primarily
depreciation) plus a rent charge; therefore, leasing often allows a customer
to drive a more expensive vehicle than they could buy. Leasing has many elements
that must be carefully considered before the decision to lease is made. Leasing
may also require a higher credit standing than buying, so it's not as widely
available as the retail financing option.
4. Exactly How much is my Trade In worth?
If you have a vehicle to trade in, your vehicle trade is a key factor to consider
because, whether you lease or buy, it will have an impact on your overall
purchasing power for your new vehicle.
5. Exactly which Motor Vehicle and Options do I
really Need?
Since you'll probably own or lease your vehicle for a number of years, it's
important to get the right vehicle and the right equipment for your needs.
Aside from your budget, there are a number of additional factors to consider,
including (but not limited to):
- How will you use the vehicle? Personal use, business use, recreation or
other?
- How will it fit your lifestyle?
- How many passengers will you need to carry? Will this number change in the
near future?
- What type of terrain and roads will you encounter: highway, city, off-road
or all of the above?
- Will you need to pull a trailer?
- What are your cargo space needs?
- What type of performance level is required?
- What type of fuel economy is required?
Take your time with vehicle options. The comfort and convenience options
you select will not only enhance your ownership experience, but your vehicle's
resale value, as well. Consider how these features will benefit your passengers,
too. If you're contemplating adding dealer-installed accessories, we recommend
having them installed at the time of purchase. If you do, they can be financed
along with the rest of the vehicle and be installed by a trained person,
which will keep the factory-authorized accessories covered under the original
equipment warranty.
6. How can I Choose a Dealer?
There are a number of factors
to consider when selecting a dealer - vehicle availability is a major one,
of course. We recommend that you use our dealer search tools learn more about
the dealer that is selling your automobile if it is a dealer.. The relationship
you establish with your dealer can greatly enhance your overall
ownership
experience
and
offer
easy,
convenient
access
to the products and services your vehicle needs.
7. How can I Negotiate a Reasonable Price?
Market demand reflects
the price you pay at the time of purchase - a price that may be less
than the MSRP. And in some cases, it may be more depending on any additional
dealer-installed
options you purchase. Arriving at an agreed-upon purchase price will usually
require at least some negotiation. While negotiations may seem to slow down
the purchase process a little and even create some buyer anxiety, the end
result should yield a structured deal that meets your needs and, at the same
time, provides a fair and reasonable profit for the dealer.
8. How can I understanding Your Purchase/Lease Contracts
and Other Documentation
This section gives you a brief description of documents most commonly encountered
at a dealership when you purchase or lease your vehicle. They're provided only
as a reference so that you'll have a clear understanding of the documentation
necessary to complete a transaction.
Sales Work Sheet
If you choose to negotiate your deal at the dealership, this form will be used
to document the agreed-upon deal. The information from this form will be
transferred to the purchase or lease order once you've reached an agreement
with the dealer.
Purchase Order
This form documents your purchase transaction with the dealership and acts
as receipt of purchase. It doesn't include the terms of your finance contract
if you finance your purchase. These terms are covered separately in the Retail
Installment Contract.
Lease Order
Similar to the purchase order, the Lease Order acts as a receipt for the lease
agreement structured with the dealer. The actual terms of the lease contract
are between the customer (lessee) and the leasing institution (lessor) and
are outlined in the lease contract.
Retail Installment Contract
This document covers the details of the contract between the customer and the
lending institution if you choose to finance your purchase through your dealer.
Closed-End Lease Contract
This document covers the details of the lease contract between the lessee (customer)
and the lessor (leasing institution).
Demo Permit
This government document is required to register your vehicle and
allows for temporary operation until license plates are ready.
Co-Signer
This form will be used to document the co-signer of a loan if required by the
lender.
9. Closing the Deal
After all of the terms of the transaction are agreed to, it's time to close
the deal. Make sure to review the documentation for accuracy and to get a
clear understanding of the terms, including your legal rights legislated
by your government.
10. How best to enjoy your vehicle?
Before you leave the dealership, make sure you have a clear understanding and
demonstration of all the vehicle features and operations, including the Owner's
Manual, service schedule and vehicle warranty. And, while you're at the dealership,
get an introduction to the service and parts departments so that you know
where and how to obtain quality service for your vehicle. Your new or used
Vehicle is designed to provide you with years of enjoyment; to keep it in
its optimal
operating condition, establish a regular maintenance
schedule and follow the instructions and recommendations outlined in your
Owner's Manual. If you ever have any questions about the operation, service
or available accessories for your automobile, your dealer
is the best place to check first.
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