Interested in Knowing How to Get The Lowest New Car Prices the 1st time, every time? Then make sure you see the simple trick the Largest Companies in the U.S. use to get the lowest new car price quotes
Can You Afford Peanuts.......or Caviar?
Common sense dictates that when you are going to buy a new car, van, truck or SUV, you know what it's going to cost each month.
Based on what I've seen in the past, I can safely say only 5 out of 10 folks looking to buy a new car know what a monthly payment "might be" on the vehicle they are looking at - that is absolutely nuts.
I remember Gary and Lisa, a young couple that was very excited about the possibility of buying a new Honda Accord EX. I introduced myself to them while I was at a Honda Dealer looking to lease a new Accord. They test-drove drove the car twice and then wanted to know the cost and what a monthly payment would be.
The salesperson discounted the Accord, gave them a price (it was a pretty good price) and presented a payment based on a 6.49% interest rate at 60 months (5 years).
I actually saw the color drain from Lisa’s face. She looked shell-shocked. Gary remained stoic but kept glancing at his wife. After a few minutes of polite questioning, they thanked the salesperson, said they would think about it…..and left.
A week later, I called Gary and Lisa at home. Lisa answered, and after a bit of polite chit-chat, I asked if they were still looking to buy a new car......and were they still considering the Accord. They were not. The reason was very simple......They were both shocked at the monthly payment.
I made some suggestions to assist them in calculating a monthly payment and suggested that the Civic might be a better alternative if they were going to buy a new car.
They purchased a Civic the following week.
Here are some thoughts, tips and advice for you to use before you need to buy a new car
Your Needs Versus Your Wants
Sounds simple - buy what you need rather than what you want.
Yet, more than 50% of those that buy a new car purchase what they want....rather than what they need. Then, they have to rearrange their budgets and make the make the Bank happy for the next 5 - 7 years.
Think about that for a moment. Do you want to be in that situation? So, how should you approach it? Try this.
- What's your current payment? if you don't have one, what does it need to be? Can you afford to pay more? How much more? Looking at your Budget will be be an eye-opening experience.....and it's the only way to avoid making a costly mistake.
- Only use 15% of your gross income (before taxes) or 20% of your take-home pay for your new car payment - if it's a lot more than that, you're payment is going to cramp your lifestyle for the next 5 to 7 years.
Never, ever let a salesperson persuade you to go any higher than $10 more than that 15% or 20% budget figure.
Your Monthly Payment Doesn't Buy A New Car....Your Monthly Payment Only Buys You Cash
What the heck does that mean, you say? I know, it's a confusing statement....yet it's deadly accurate.
I want you to think of it this way. Your monthly budget for a car payment is not going to buy a new car, truck or suv. It's only going to get you the cash needed to buy that new car, truck, or suv.
Here's an example that will make it a little clearer. Let's say your budget can handle a $420 a month payment for 60 months (5 years). That monthly payment will buy you a $20,000 loan - the cash you need buy a new car.
Once you have that figure, you can then begin to shop for the car you want....and you'll know exactly what type of price range you should be looking
at!
No guessing. No getting-in over your head on a monthly payment. And little chance of screwing up your credit.
All you need to do is head on over to Edmunds.com and play around with their Payment Calculator. The only information you need to have is your Sales Tax. Let Edmunds Default everything else if you do not have a trade-in or cash down. After a couple of tries with make-believe sale prices, you'll get to the monthly payment you're targeting to fit your budget....and you'll know exactly what price range you should be shopping for. Click here to use the Edmunds Payment Calculator.
How To Get A Budget Bulls-Eye....Without Going Online
Don’t feel like typing or using a mouse? Then do this…….
Use “The Rule of 20”. This rule will give you an idea of how much cash you can borrow based on your own budget requirements - and what price range you should be shopping in.
It's pretty simple – let me show you
Let’s say your budget will allow for a $440 payment for 60 months (5 years).
Divide that $440 Monthly payment by "20" -- that equals 22.
The "rule of 20" says that you then multiply that figure (22)
by $1000.
That equals $22,000.
Then subtract the sales tax for your area. I'll use 7.5%. That equals $1,650.
So the math looks like this -
$22,000 - $1,650 in Sales Tax =
$20,350.....The Exact Price Range you should be looking at when you're going to buy a new car.
Do's and Don'ts:
DO – Have an idea of what the cost is for the new car you’re considering.
DO – Have an idea of what a monthly payment might look like for a new car, van, truck or SUV.
DON’T – Go near a Dealership till you know if you can afford Peanuts or Caviar.
DON'T - Ask friends, relatives and neighbors what they paid for a car, van, truck or SUV you might be considering.
To find out what a particular new car or truck might cost, you could always ask someone else who’s bought the same type of car. Maybe it’ll be a friend, relative or someone in your neighborhood.
Let me tell you what will happen if you ask them. They’ll throw their shoulders back, stick out their chests, and say....
I got a great Deal!
They’ll even tell you the price they paid!
The problem is, the price is usually never what they actually paid.
They’ll forget to include the Taxes. Or, the many fee’s that get added.
Or, they'll just plain guess because they looked at so many numbers when they bought their car, they can’t remember what they paid.
Why do they act like that? I don’t know. Perhaps we can chalk it up to plain old Human Nature. What I do know is this – if you don’t get to see the Contract they signed, you’re not getting the real price.
P.S. After you've calulcated what you can afford and the models you're going to look at - get an exact sales price using Edmunds New Car Price Quote System. You'll be able to get a price quote from every dealer in your area that belongs to their network. Just take a look at the list below, find your make and model and then get the best price you can when you're going to buy a new car, truck, minivan or suv.
Tom O'Leary is an Automotive Portfolio Analyst, Author and has been called a modern-day "Robin Hood" for his efforts in helping the Automotive Consumer.
Get The Best Sale Price When You're Going to Buy A New Car, Minivan, Truck or SUV
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Lowest Sale Prices on the Top Picks for 2006 - 2007 |
