A new car is second only to a home as the most expensive purchase you will probably make. The average price of a new car is in excess of $25,000

Buying Your New Car

Think about what car model and options you want and how much you’re willing to spend. Do research.
Consider these suggestions:
• Check publications at a library or bookstore, or on the Internet, that discuss new car features and prices.
• Shop around to get the best possible price by comparing models and prices in ads and at dealer showrooms.

• Plan to negotiate on price. Dealers may be willing to bargain on their profit margin, often between 10 and 20 percent
Because the price is a factor in the dealer’s calculations regardless of whether you pay cash or finance your car — and also affects your monthly payments — negotiating the price can save you money.
• Consider ordering your new car if you don’t see what you want on the dealer’s lot. While this may be a delay, the cars on the dalers lot may have options you don’t want., but cars on the lot may have options you don’t want — and that can raise the price.

Learning the Terms

Negotiations often have a vocabulary of their own. Here are some terms you may hear when you’re talking price.

• Invoice Price is the manufacturer’s initial charge to the dealer. This usually is higher than the dealer’s final cost
• Base Price is the cost of the car without options, but includes standard equipment and factory warranty..
• Monroney Sticker Price (MSRP) shows the base price, the manufacturer’s installed options with the manufacturer’s suggested retail price, the manufacturer’s transportation charge, and the fuel economy (mileage)..
• Dealer Sticker Price, usually on a supplemental sticker, is the Monroney sticker price plus the suggested retail price of dealer-installed options,

Financing Your New Car
If you decide to finance your car, be aware that the financing obtained by the dealer, even if the dealer contacts lenders on your behalf, may not be the best deal you can get. When negotiating to finance a car, be wary of focusing only on the monthly payment. The total amount you will pay depends on the price of the car you negotiate, the APR, and the length of the loan. Once a dealer was going to try and put me in a $28,000 vehicle that would meet my monthly payment. Problem was when I did a quick mental calculation and figured the total cost of the vehicle was close to $40,000. The deal fell through when I told the dealer I wasn’t paying that much for a $28,000 vehicle.

Sometimes, dealers offer very low financing rates for specific cars or models, but may not be willing to negotiate on the price of these cars. With these conditions, you may find that it’s sometimes more affordable to pay higher financing charges on a car that is lower in price or to buy a car that requires a smaller down payment.

Before you sign a contract to purchase or finance the car, consider the terms of the financing.
Some dealers and lenders may ask you to buy credit insurance to pay off your loan if you should die or become disabled. Before you buy credit insurance, consider the cost, and whether it’s worthwhile.

Trading in Your Old Car

Discuss the possibility of a trade-in only after you’ve negotiated the best possible price for your new car and after you’ve researched the value of your old car. Once when purchasing a new car I had decided that my trade in was not truly worth anything. It was a 1995 Chevy Lumina sedan with 188,000 miles on it. After completing the deal for the new car I asked the salesman what my old car was worth he told me actually it was only worth about $500, which I already new.

Considering a Service Contract

Service contracts that you may buy with a new car provide for the repair of certain parts or problems. These contracts are offered by manufacturers, dealers, or independent companies and may or may not provide coverage beyond the manufacturer’s warranty. Remember that a warranty is included in the price of the car while a service contract costs extra.
Before deciding to purchase a service contract, read it carefully and consider these questions:

• What’s the difference between the coverage under the warranty and the coverage under the service contract?
• What repairs are covered?
• Is routine maintenance covered?
• Who pays for the labor? The parts?
• Who performs the repairs? Can repairs be made elsewhere?
• How long does the service contract last?
• What are the cancellation and refund policies?

To read more information on buying a new car go to http://www.thebottlehut.com/Articles/Money/BuyingNewCar.html