10 Steps to Buying a New Car

10 Steps to Buying a New Car
10 Steps to Buying a New Car By Philip Reed

1: Starting out
These steps will help you to locate the specific car you want, and at a price that is fair to both you and the dealer. By now, you should have done plenty of research to determine which is the best car to suit your needs. And, you should have a good idea of what to pay for the car you want. Now you need to narrow the research even more. You will soon be finding the exact car you want to buy — with the options you have chosen — and then you will be determining a target price to pay. If you have done your homework, this will be a fairly easy process with no unexpected surprises.Buying a car is a big investment, but it can be exciting and rewarding, especially if you feel like you got the right car at a fair price.

Step 2: Using incentives and rebates
Today's new car market is crowded and competitive. Many new cars are offered for sale with attractive incentives to make you choose a particular model. In some cases, the cars with the best incentives are those that aren't selling very well on their own.An incentive is anything that gives you an added reason to buy a particular car. Often, however, it comes in the form of a cash rebate or low-interest financing. A car might be selling for $22,000 but the manufacturer is offering $3,000 in customer cash for a final price of $19,000. In another example, a $22,000 car financed for five years at six percent would have a monthly payment of about $550. But with zero-percent financing, the payment is roughly $480. That's a huge savings to you.Check the Edmunds.com Web site for the latest incentives and rebates available for the car you want to buy. You can also watch for TV and newspaper promotions but, remember, the incentives don't apply to all models and are not offered in all regions of the country. Furthermore, your credit must be very good to get the low-interest financing. And finally, keep in mind that there are some hidden incentives paid directly to dealers to push certain cars. Edmunds.com tracks this so-called "dealer cash" as well, and posts the information in the incentives and rebates section of our Web site.Research what incentives, if any, are offered for the car you want to buy. Print out this information and keep it in your car-buying folder as you move to the next step.

Step 3: Pricing the car.
Car salesmen will usually point to a car's "sticker price" as the amount you have to pay. However, the price the dealership is willing to sell a car for is often well below the sticker price. How do you know what to pay? Edmunds.com has created a valuable tool for car buyers called True Market Value (TMVฎ) pricing. Based on actual sales figures, TMV is the average price buyers are paying (also known as the "transaction price") for a certain type of car in your area. The TMV figures, found on Edmunds.com, are adjusted for many factors including options, geographic region and color.To calculate TMV, begin by looking up the car you want to buy on Edmunds.com. Follow the prompts to arrive at a final TMV price with options for the exact car you are buying. Keep in mind that this price includes the destination charge, which is levied by all manufacturers. (However, the invoice price might vary in certain regions where advertising costs and other fees are included. Edmunds recommends paying the fees listed on the invoice, but questioning any advertising fees that appear on the purchase contract.)Now it's time to factor in the incentives and rebates you researched and printed in the previous step. Take the final TMV price and deduct the amount of the cash rebate. In other words, you create your best deal based on TMV, and then lower it by whatever the rebate is. If you are going to use low-interest financing, calculate your final buying price, then use our payment calculator to find your monthly payment.Print these figures — the TMV, the incentives and the monthly payment — and carry them with you for reference as you continue the car-buying process.