Buying a New Car

New Car retail marketing is often more about the deal than it is about the car itself. Perhaps this is because these ad lines hook into the collective mentality that drives us all to want to get a better deal. The truth of the matter is that there are good deals out there in the new car market, and some of these advertisements, even after reading the fine print, actually represent good deals. However, the best deal of all is when a person buys a vehicle that best suits their needs, wants, and budget, gives them a safe, pleasurable, trouble free term of ownership, and holds its value well.

Before ever leaving home to shop for a new car, do your research. If you read the article on this site about Buying a Used Car, some of this information will seem repetitive, but a lot of the research is the same. Fuel economy EPA ratings are available from many sources, but if you want to read the official release, then go to the EPA's fuel economy website, www.fueleconomy.gov. On this site they post a Fuel Economy Guide for each model year. These guides are organized by type of vehicle within a model year, and show the EPA fuel economy ratings for each model.

Safety is important for everyone. If you want to know how the vehicle fared in the crash tests that the National Highway Traffic Safety Administration performs, go to their website, nhtsa.gov. On this site you will find crash test data for most vehicles, along with an explanation of how they were tested. Please note that for the current model year, you might not find crash test data for every vehicle. For models in which there was not a redesign for the current model year, the previous year's test results might be valid.

Every car manufacturer has a website where you can learn about the specs, models, trim levels, colors, and any other information about the vehicle that the manufacturer wants to show you in order to entice you to buy their product. I would recommend that if you are interested in a particular vehicle, that you start with the manufacturer website. On this site, I have put together a collection of links for many of the manufacturer websites in this list.

There are numerous sources for reviews and road tests of new vehicles. Motor Trend is often a good source of information. On the Auto Industry News page of this website, two of the RSS feeds that I show on the page are from Motor Trend, one of which is specifically devoted to road tests. Edmunds.com and Consumer Reports are also good sources of information about new vehicles, although you must be a subscriber to Consumer Reports in order to get very deep into their site. These and many other sites contain reviews and road tests of various new vehicles that are currently on the market, and I would advise any consumer to read as much as possible about any vehicle that you are considering buying.

As you research these websites, please keep in mind that most of the MSRP (Manufacturer's Suggested Retail Price) and invoice pricing information that you see on internet sites does not include the destination charge which is a component of the MSRP and it is a component of the dealer invoice price. Also, it is a common practice when quoting new vehicle prices via internet shopping services to quote the price net of destination charge as well as any other additional fees and tax. The destination charge varies from one automaker to another, but it is generally in the $500 to $700 range. This is a component of the cost of the vehicle; the dealer pays the destination charge to the manufacturer, and the consumer pays the destination charge to the dealer.

In today's automotive retail environment, many new vehicles are being sold at, or within a few hundred dollars of dealer invoice. If a particular model for which there is a high demand is in short supply, then the consumer can expect to pay substantially more. Some models fetch MSRP, and in some markets even more. Case in point, in the 1999 model year, Honda came out with a newly redesigned Odyssey mini-van that sold at MSRP for four and a half years. In the major metro area markets, they were selling for as much as $3000 over MSRP. Please keep this in mind when trying to determine what you can reasonably expect to pay for a particular vehicle.

In the past few years, rebates have become ever more common. Rebates are offered by an automobile manufacturer in two forms, customer cash and dealer cash. Customer cash rebates, which are offered by the manufacturer to the public, are the most common, and dealer cash rebates are paid to the dealer, who may or may not extend this discount to the consumer. Dealer cash rebates are not advertised by the manufacturer, but they are often common knowledge among the public given the amount of pricing information commonly available on the internet. Rebates are often offered in lieu of special finance offerings, and I will discuss this further in the Financing Your Car section of this site.

If you are planning to purchase a new vehicle, I would encourage you to read my article on Automobile Leasing. Even if you are someone who is adamantly opposed to leasing your vehicle, please keep an open mind and read the article.