Monday, August 21, 2006

How to Buy a Car

I am a long time admirer of the Motley Fool, the investment guys. While I've never had money to invest, their writing style is breezy and informative without being pedantic. Thomas Gardener wrote a 10 step plan for buying a car which I will summarize here.

1. Shop Late. After the 25th, to take advantage of their quota system.

2. Do your research and call around. Get a copy of the "National Automotive Dealer Association Handbook" (NADA), or visit their web site, together the features and their listed costs to get a fairly accurate estimate of their cost. Then call a few dealers and see what kind of deal you can get. But, DON"T COMMIT TO ANYTHING!

3. Add 3% to the NADA estimate, and set that as your highest price.

4. Don't fall for so-called Good Deals. Gardener writes, "It's an unfortunate fact of human existence that in order to get a fair price for a new car, you'll have to drive it off the lot with the entire sales force shouting insults at you. . . . But remember, if a devil smiles and winks at you, you're doing something wrong. The goal is to have these devils hating your guts. "

5. Avoid Trade-Ins.

6. Call out-of-town dealers to see what they will do. If you get a better deal 100 miles away, tell your local dealer and see what happens.

7. Keep trade-ins and new car deals seperate.

8. Don't be afraid to walk away.

9. Use a $200 car as your trade in and see if you can get $1000 for it. Gardener calls it The Lemon Test.

10. Don't let the sales manager intimidate you.

Click on the link above to read the entire article. Not only is it good advice, it's funny, too.


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