Buying a new (or used) car is exciting! But a lot of people get nervous the minute they hit the lot. We chatted with Sherrice Gilsbach, the associate online editor of Autoweek, to get insider tips on dealing for wheels like a true alpha woman.
SheKnows: Is getting a great deal on a car really as hard as people make it seem?
Sherrice Gilsbach: The first article of car-shopping advice we provide is, of course, to be prepared. Knowing exactly what you can afford, what type of car you want and when the market is ripe with deals will help you get what you want for less.
SK: How do you know what kind of vehicle you can afford?
SG: I like to start with an honest budget to determine what kind of car you can comfortably afford. I say “honest” because often people get approved for a significant loan amount because of a decent salary and/or high credit score. Then they buy a car with high monthly payments only to find shelling out that dough each month really cramps their lifestyle.
Before you get locked into a high payment you can’t realistically afford, consider all of the monthly costs associated with owning a car, like monthly loan/lease payment, monthly insurance cost, monthly fuel cost, maintenance budget (whether new or used, all vehicles require regular maintenance, including oil and filter changes, tire rotation and other things that can just pop up, like a chipped windshield) and parking costs depending on where you live.
Develop an estimate of the costs and then do a trial-run where you set that amount of money aside each month for three or more months. If this exercise is easy for you, you’ve likely budgeted correctly and now you have some money stashed to use as a down payment.
SK: Where do you get the estimate numbers you need to use?
SG: When it comes to the monthly payment, don’t rely on car commercials or newspaper ads to determine what a monthly payment will be. Often the low, low prices featured in these ads are bait-and-switch deals intended to get you to call or visit the showroom.
Instead, do some simple math. For example, if you’re looking at cars in the $30,000 range, divide that $30,000 by the number of months you plan to use to pay off the car loan. For example a $30,000 car bought with zero money down will cost you approximately $500 each month — not including interest — to pay off over five years (60 months). This is a much more realistic estimating method than buying into the hype in the commercials.
SK: That takes care of the price of the car. What about fuel, insurance and maintenance costs?
SG: The National Auto Dealers Association website offers a cost-to-own feature that will tell you how much the car of your choice will cost on average throughout the life of ownership. For example, we looked up a scenario relating to a 2012 Mazda 3 and found that the estimates include fuel, insurance, repairs and depreciation.
This service is also great for determining whether a hybrid vehicle is a good bet for you. Remember, if you’re considering a hybrid, these cars won’t operate at peak efficiency in extreme heat or extreme cold, and they are most efficient when driven in the city rather than the highway. Hybrids in general are great for city drivers who live in mild climates.
With regard to car insurance costs, any insurance provider should be able to provide an estimate if you have some idea of what kind of car you want. There are also websites like CarInsurance.com that offer helpful advice and guidance as to which cars are least expensive to insure.
Fuel economy estimates are posted at FuelEconomy.gov to help determine how much fuel the models you are considering use. Compare the fuel economy to the number of miles you typically drive in a month and how much gas is going for at your local station and you’ll have a ballpark number of how much you will spend on fuel each month.
SK: Now that we know what we can afford, how to we actually select a new car?
SG: Once you have developed a new-car budget, hit websites like Autoweek.com to pour over reviews of the latest models, look at pictures of vehicles to determine which styles you like best, and see what the experts have loved and hated about the cars you have in mind.
- Ask yourself some basic questions to help narrow down the search.
- How many people do you usually travel with (to determine passenger capacity)?
- How much gear do you need with you at all times (to determine required cargo volume)?
- Is there a drive feel you prefer? Something fast and furious or soft and comfy?
- Will this car need to tow anything?
- How long do you plan to keep the car and will it fit your life over the long haul?
- Cross-reference your needs with the professional’s favorites, and you will likely find yourself in new-car-bliss.
SK: What about used cars?
SG: If you’re considering buying a used or pre-owned vehicle, try to stick with a certified pre-owned (CPO) model. Nearly every dealership will offer CPO cars that have been thoroughly inspected. If you’re buying a used car from an individual rather than a dealership, have the car inspected by a certified mechanic or inspection service, like Alliance Inspection Management. Either will charge you for their services, but it’s better to be safe than sorry. If a dealer or owner won’t let you have the car inspected, run in the opposite direction. This is a clue there is likely something wrong with the vehicle.
SK: Is there a time of year or month when can you get the best deals?
SG: The end of the month is the typical answer. The end of the last month of the year, between Christmas and New Year’s Day is the ultimate time to buy. Reason is, these times are when dealerships are most willing to negotiate in order to meet monthly and yearly sales goals and quotas.
Also pay attention to when brand new models are on their way. Outgoing models are ripe for deals. The 2012 Ford Escape was a great example from last year, and the 2012 Fusion would be a best buy right now as the all-new 2013 Fusion hits dealerships.
SK: Speaking of negotiation, what do we need to know about that? Is there a trick to it?
SG: Keep the timelines I mentioned in mind and go ahead and make an offer. Be realistic with your expectations, however. The automotive industry is back to booming and many manufacturers can sell cars without offering discounts. If you walk in asking for thousands of dollars shaved off a brand-new model, you will likely be let down. Remember, dealerships and salespeople have a right to earn a living too.
Sites like TrueCar.com provide data on how much other people in your area have paid for the same car you intend to purchase. Knowing this information will certainly keep you from paying too much.
SK: We’ve noticed that dealerships can often give better terms than our own banks. Should we be suspicious of that?
SG: Not at all. Basically, manufacturers can subsidize the sales so it’s to their advantage to keep the financing in house.
SK: How much will we get for our trade-in?
SG: Many dealers use Kelley Blue Book for trade-in values. The bottom line is a dealer will not give you as much as you could get selling the car on your own. They need to make some profit on that car and may need to make repairs to the car in order to sell it, and that will cost them.
About Sherrice Gilsbach
As a child, Sherrice Gilsbach begged her parents to take her to the North American International Auto Show in Detroit each year. In college, Sherrice studied journalism and worked for East Lansing’s cable-access channel, delivering community news and broadcasting city meetings. Upon graduating from Michigan State University, she moved into the public-relations field and worked primarily with automotive clientele. She’s covered automotive news and written car reviews for MotherProof.com and Cars.com and attended several auto shows and new-model launches. Today, as associate online editor for autoweek.com, Sherrice is happy to combine her two favorite pastimes, writing and learning about cars. Despite being a soccer mom, Sherrice prefers small cars with responsive handling, like the Mini Cooper S, Mazdaspeed3 and the Nissan 370Z.