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Car Shopper's Guide:

Is Buying a New Vehicle Online a Viable Alternative to Good Old Tire Kicking?

by Lee A. Caglioti

On the list of fun things to do, shopping for a new vehicle is right up there with a tax audit or a root canal. For most of us, the exciting prospect of owning a new car or truck is overshadowed by the anxiety caused by the dreaded purchasing process. Just the same, if you do your homework and take advantage of all the information available, you should be able to feel less like a fledgling and more like an expert consumer. The best deal will come from a combination of Internet research and negotiation tactics. Keep in mind that information is the key word, but we can easily go into overdrive if we don't map our course before we get started. The following recommendations are geared toward purchasing a new car, but many of the same principles can be applied to shopping for a pre-owned vehicle.

Before You Start

First and foremost is to know your budget and resolve to stick to it. It's best not to fall so deeply in love with a vehicle that you lose sight of your finances. Remember that you still have to be able to feed yourself and keep your lights turned on, so don't overextend! Once you know what you can sanely spend, start shopping. Keep your options open, as many cars have the same engines and features as similar models of their "competitors." For example, the Dodge Caravan and the Plymouth Voyager minivans are basically interchangeable, as are the Dodge Viper and the Mitsubishi GT 3000. Fortunately with the availability of the Internet, you don't have to drive all over town to check out the models. From Acura to Volvo, you simply cannot beat the Web for researching each manufacturer. If you're having trouble deciding what kind of new vehicle you want, let one of the car-finder interactive sites help you narrow your choices to suit your needs. When you fine-tune it down to a handful of models, you should compare and view all the specs side by side . With that done, it's time to get down to serious business.

Without a doubt, one of the basic rules is to approach the dealer at the end of the month. In addition to a standard commission, most dealers offer their salespeople a bonus based on a monthly quota. The closer the quota deadline is, the more eager a salesperson is to sell another vehicle and the more likely they are to negotiate on your terms.

Knowing what your trade-in (if you have one) is worth is also crucial. Before you take your car to the local used lots for pricing, clean it completely. That means not only removing the fast-food wrappers and chiseling the gum out of the ashtrays, but also vacuuming the trunk, tightening or removing anything that may rattle and degreasing the engine. Granted, by the time you're done sprucing up your old car, you may think you can get another year or two out of it, but don't be dissuaded.

If the tires are bad, seriously consider replacing them with a decent set of used ones. A dealer will take hundreds of dollars off the value of your trade-in if the tires are bald. He will also scratch out another two to four hundred if your air conditioning does not blow cold. If you need Freon, get it; it is most assuredly worth it. With the car clean-up completed, get your base value at Kelley Blue Book. Then take your car to three or four used car lots and tell them you're interested in selling it and see what they offer. This way, when you let the dealer appraise it, you know what kind of range you're looking for. One thing to leave in your car when you do drive it onto a new car lot is a selection of business cards from other dealerships. Also leave any repair logs or receipts in your glovebox. Rest assured that the appraiser will go through every piece of paperwork you have, so don't leave anything in there that you wouldn't want him to see. It is vital that you get the dealer to commit to your trade-in value before you make an offer on any vehicle. It is equally important that you get your keys back after the appraisal. The salesperson will try to keep them as a way to manipulate you into feeling like you have already "given" them your car and to keep you in the showroom. Remember that you're on equal footing with the salesperson; you're trying to sell him your car and he or she is trying to sell you "theirs." Do not hesitate to actually sell your car outright, either to a used car lot or a private party. Odds are, you'll get more money for it that way than as a trade. When you have the value or the cash for your trade-in, you're ready for the next step.

Getting the Best Price

There are several online services that make this process far easier; the primary thing to look for is the dealer invoice pricing. Some manufacturers include what is called a dealer holdback in the invoice but some do not subscribe to this practice at all. One or two of the Web sites I reviewed charge a fee, like Consumer Reports, but many of them are free and provide the same information. Edmunds is one of the most comprehensive sites around, followed closely by CarClicks , Autosite and CarTrackers.

However, don't assume that having the invoice information will let you walk out of the showroom with the dealer losing money. That simply won't happen. The dealer is in the business to make money, just like you are at your job. You don't necessarily need to let the salesperson know that you have this information, either, but if you do decide to make him aware, don't do it in an adversarial manner. You want the salesperson to be your "buddy" as much as he wants you to be his. It works to your advantage to be polite and open, no matter how many aces you have up your sleeve. When you find the dealer invoice price, don't forget to add any of the options you may want. Check the pricing on options like undercarriage protection, paint sealant, fabric protection and window etching. You can often get better after-market values on those and other features.

You should expect to pay anywhere from $100 to $500 above the dealer invoice. Obviously, the closer you get to the invoice price, the better deal you're getting. Some advisors will tell you never to pay more than $100 over, but this may not be realistic. Don't forget to check out the rebates or incentives that may be available. Often, it is best to mention these after the dealer has given you his best price. Don't let the salesperson tell you that he was already calculating the rebate into the price he gave you. Unless you see it on paper, it doesn't count.

So you know which car you want, which goodies you want with it and how much you want to pay, but what now? This is where the online services really come into play. Be advised that the dealers listed with the car buying services have paid to be there. Requesting a price via these services does not commit you to purchasing from their listed dealers. In fact, you can arm yourself with the information you obtain and just as easily put it to use at a dealership that isn't registered with one of the services.

Whichever service you choose, you will essentially follow the same five steps. First, you'll submit a purchase or pricing inquiry form that will go to the closest dealer listed with that agency. Second, a sales representative from the dealership will contact you with a quote. Third, you will be assured that the quoted price is the actual price. In other words, they won't hit you with additional charges (other than tax, tag and title) when you arrive at the showroom. Fourth, if you agree to the price, you can arrange to purchase the vehicle that day (or at your convenience). Fifth, the salesperson will complete as much of the required paperwork as possible prior to your arrival. But before you say "sold!" take a test drive. Then take another. Even reading the most detailed reviews cannot replace actually putting your dream machine through its paces.

Online Services

Each of the online services has something to offer. Auto-by-tel has a pretty nifty program if you're in the habit of buying a new car every two years or so (hey, I've heard some people actually do this), or if you have a fleet of cars to purchase for your business. It's called Mobalist (under "Rewards" on the Auto-by-tel site) and it provides reward points based on purchases. AutoVantage offers several basic free services including new car pricing, reviews, insurance quotes and more. They also offer additional services to paid members. Microsoft's CarPoint stresses their hassle-free service and outlines the process of online buying more clearly than most.

Is purchasing a car online an alternative to doing the legwork? Well, it's best to think of cyber shopping as an enhancement rather than a replacement. By using both means of research, you are guaranteed to be more informed and better prepared than if you had only exercised one venue. The fundamental thing to remember is that you really are at the advantage. You have the resources, you have the desire and you have the means to purchase a new car or truck. The salespeople have a grab bag full of tactics with which to manipulate you, but now you know what they are and how to respond. The dealerships know what they paid for a vehicle, but with the above resources, so do you! Use the wealth of information available online and you're guaranteed to see the net savings!


A former executive chef, Lee Caglioti lives in southwest Florida with her husband and two stepchildren. She keeps busy by helping with the family woodworking business, collecting tarot cards and freelance writing. Lee is also an avid reader and plays a mean game of Scrabble.


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