Shopping for a new car : Tips and Tricks
New car is second biggest purchase beside home for many people. On average, People change a car every 5 years and there are lot of hassles buying a new car. Here are some tips on saving some money while buying a new car.
1. Choose the season: December and January are very slow months for car dealers. Very few people walking into the showroom other than employees while business expenses are piling up everyday. Every one is busy with Christmas in November , December and paying bills in January. Car dealers often give great discounts in these three months and particularly towards the end of the month. Timing is on your side when you walk in to the showroom.
2. Know the dealer price: There are web sites offering dealer price of the vehicle for a minimal price. This is handy for bargaining for a new car. Dealers will still get more discounts on those wholesale prices.
3. Previous Buyer Records: It would be great if you have access to all previous buyers of same vehicle, so You can ask for the one who paid the least, But I bet you that there are no dealers providing all those records to you. Another way to get that information, Go thru lease takeover web sites and look for same model car purchased in last 12-24 months. Going through these records gives you pretty good idea how much bargain was offered compared to MSRP.
4. Cash Payment at the dealer This may not be an options for most but consider doing this either by adding more savings to down payment or arranging thru short term financing options like Line of Credit. Better choice would be wait for few months and save enough to do a down payment. Why? Most dealers make money on financing and car service. When you go the showroom and discuss with salesman, It is plain simple. You have money and want to buy it with a certified cheque. No more numbers games about monthly payments. You would be amazed to see how great the bargain will be.
5. Lifetime Value Considering lifetime value while choosing your new car. List all possible expenses for the car over four years using todays costs, Add them to the price. Now find out residual value of the car after 4 years. Deduct this residual value from Total cost giving you life time cost for this car. Get the number for all the cars in similar class and then decide.
Luxury car comparision (Excel file to see comparisions: Luxury Car Compare.xls)
2008 Audi A4 2.0T FrontTrak Sedan
MSRP : $35,350.00
Insurance costs ( 4 years): $12,000.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $0.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $6,048.00
Manufacturers buyback price. $(17,500.00)
Total net cost over four years is $35,898.00 for 4 year use of the vehicle.
Total cost per month $747.88
Cost per KM $0.45
Highway Fuel economy (L/KM) 6.3L/100KM
Now lets see the same for Mercedes
2008 Mercedes-Benz C300 W
MSRP : $41,000.00
Insurance costs ( 4 years): $11,520.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $0.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $7,392.00
Manufacturers buyback price. $(23,000.00)
Total cost over four years : $36,912.00 for 4 year use of the vehicle.
Total cost per month $769.00
Cost per KM $0.46
Highway Fuel economy (L/KM) 7.7L/100KM
Now Time for numbers on Lexus
2008 Lexus ES 350
MSRP : $39,900.00
Insurance costs ( 4 years): $13,440.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $4800.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $6,912.00
Manufacturers buyback price. $(15,162.00)
Total cost over four years : $49,800.00 for 4 year use of the vehicle.
Total cost per month $1039.00
Cost per KM $0.62
Highway Fuel economy (L/KM) 7.2L/100KM
As you can see from numbers, Lexus costs almost twice as much as compare to similar luxury vehicles.
++ Based on today's fuel cost and all highway driving.
* Approximate. Most Luxury cars come with no charge meaintainence for 4 years
* All these prices are canadian prices as of 10/Apr/08
6. Look for Recall notices on the model. You don't want to get into those if there are lot of recall notices in last few months.
1. Choose the season: December and January are very slow months for car dealers. Very few people walking into the showroom other than employees while business expenses are piling up everyday. Every one is busy with Christmas in November , December and paying bills in January. Car dealers often give great discounts in these three months and particularly towards the end of the month. Timing is on your side when you walk in to the showroom.
2. Know the dealer price: There are web sites offering dealer price of the vehicle for a minimal price. This is handy for bargaining for a new car. Dealers will still get more discounts on those wholesale prices.
3. Previous Buyer Records: It would be great if you have access to all previous buyers of same vehicle, so You can ask for the one who paid the least, But I bet you that there are no dealers providing all those records to you. Another way to get that information, Go thru lease takeover web sites and look for same model car purchased in last 12-24 months. Going through these records gives you pretty good idea how much bargain was offered compared to MSRP.
4. Cash Payment at the dealer This may not be an options for most but consider doing this either by adding more savings to down payment or arranging thru short term financing options like Line of Credit. Better choice would be wait for few months and save enough to do a down payment. Why? Most dealers make money on financing and car service. When you go the showroom and discuss with salesman, It is plain simple. You have money and want to buy it with a certified cheque. No more numbers games about monthly payments. You would be amazed to see how great the bargain will be.
5. Lifetime Value Considering lifetime value while choosing your new car. List all possible expenses for the car over four years using todays costs, Add them to the price. Now find out residual value of the car after 4 years. Deduct this residual value from Total cost giving you life time cost for this car. Get the number for all the cars in similar class and then decide.
Luxury car comparision (Excel file to see comparisions: Luxury Car Compare.xls)
2008 Audi A4 2.0T FrontTrak Sedan
MSRP : $35,350.00
Insurance costs ( 4 years): $12,000.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $0.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $6,048.00
Manufacturers buyback price. $(17,500.00)
Total net cost over four years is $35,898.00 for 4 year use of the vehicle.
Total cost per month $747.88
Cost per KM $0.45
Highway Fuel economy (L/KM) 6.3L/100KM
Now lets see the same for Mercedes
2008 Mercedes-Benz C300 W
MSRP : $41,000.00
Insurance costs ( 4 years): $11,520.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $0.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $7,392.00
Manufacturers buyback price. $(23,000.00)
Total cost over four years : $36,912.00 for 4 year use of the vehicle.
Total cost per month $769.00
Cost per KM $0.46
Highway Fuel economy (L/KM) 7.7L/100KM
Now Time for numbers on Lexus
2008 Lexus ES 350
MSRP : $39,900.00
Insurance costs ( 4 years): $13,440.00
Govt/ Manufacturer rebates : $0.00
Four year Maintainence costs*: $4800.00
Auto club cost for 4 years (Like AAA): $0.00
Gas expense for 80,000 KM ++ $6,912.00
Manufacturers buyback price. $(15,162.00)
Total cost over four years : $49,800.00 for 4 year use of the vehicle.
Total cost per month $1039.00
Cost per KM $0.62
Highway Fuel economy (L/KM) 7.2L/100KM
As you can see from numbers, Lexus costs almost twice as much as compare to similar luxury vehicles.
++ Based on today's fuel cost and all highway driving.
* Approximate. Most Luxury cars come with no charge meaintainence for 4 years
* All these prices are canadian prices as of 10/Apr/08
6. Look for Recall notices on the model. You don't want to get into those if there are lot of recall notices in last few months.
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