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Getting ready to visit a dealership
I've written previously about the importance of choosing the right dealership. Before you actually visit a dealership, there are things you should know and do that will save you time, money and hassle when buying a new vehicle.
First and foremost, new car buyers should establish a budget. It?s easy to fall in love with a car during a test drive, but it?s tough having to admit, after the test drive, that a particular car isn?t in your price range. A budget doesn?t have to be carved in stone, but it should accurately reflect what you are able to afford. Buyers, at times, feel that a sales rep is guiding them towards a car that is beyond their budget. In many of these situations, a sales rep is only sensing the buyer?s excitement.
Are you a cash buyer? Or, are you a lease or finance payment buyer? Study the various financing options available on the vehicle that you want, and figure out which option best suits your lifestyle and budget. Cash, finance and lease are the most common payment methods. Take the time to understand the pros and cons of each. Everyone you talk to will have an opinion of the ?only? way ? which may or may not be the best for you, and you should know why.
If you are concerned about your credit worthiness, you may want to make some initial inquiries with your local bank or lending institution. This will help to determine your lending limits, interest rates, and monthly payments.
Be flexible with your purchase price ? to a point. Try starting with a figure that?s 10% below your actual budget. By allowing yourself some latitude in terms of price, you will put yourself in a position to take advantage of certain features or accessories, if you want to include them. You will be ?living? in this vehicle for several years, so don?t deny yourself a few bells and whistles if you can afford them; they will add to your driving pleasure.
Determine your precise vehicle needs and wants, and don?t confuse the two. You may want a sports car, but a mid-size sedan might be more practical for your lifestyle. With the 1000-plus vehicle models available today, in all price ranges, finding the right vehicle at the right price will take time, but it shouldn?t be difficult.
Research vehicles carefully. Manufacturer websites contain a wealth of information on the latest models, including vehicle photos, features, benefits, options, accessories, colour availability, and pricing. Consumer websites offer car reviews and opinions from automotive experts about all types of vehicles, as well as first-hand testimonials from car owners.
The price of a new car includes additional costs that you need to be aware of, such as taxes (15 %, or $4,500 on a $30,000 vehicle), freight, pre-delivery inspection, administration fees, etc. Extended warranties and special service plans are options that can boost the cost of a new car even higher.
Do you want a new car without paying full retail price for it? Then, perhaps you might consider a demonstrator model (demo), or a one year-old vehicle. Demos are typically driven by dealership staff for approximately 5,000 to 10,000 kilometers, and then are offered for sale. The price of a demo is less than the cost of a new vehicle ? sometimes by thousands of dollars.
If you?re planning to trade-in your present vehicle, it will have an impact on the new vehicle sales transaction. I will address the issue of trading-in versus selling privately in next week?s column.
The cost of insurance should be a consideration when buying a new vehicle. If you are presently driving an older model car, don?t expect your insurance rates to remain the same on a new vehicle. Also, you may be shopping for vehicles that you believe to be very similar, only to discover that the insurance is far from similar for the vehicles on your list. Repair costs and high incidence of theft are just two of the many factors that are used to determine insurance rates. Contact your insurance company for quotes on the specific vehicles that you?re looking to purchase.
When you?re ready to visit a dealership, it is wise to call ahead, speak to someone in sales, and make an appointment with that person. If a friend has recommended a particular salesperson at the dealership, ask for him/her. That salesperson was recommended because he /she is good. (Many dealers will pay a referral fee to the person that recommended you ? please let us know so that we can financially thank that person.) Sales reps work on commission and their time is important, so please be sure to respect their time, as they should respect yours.
It is important to visit your chosen dealership no less than four to six weeks prior to the date that you need to take delivery of your new vehicle. This will maximize the likelihood of receiving your first choice of colour and options.
Remember, the goal when visiting a dealership is to buy the right vehicle for you, not just to make a ?deal?. I have yet to hear anyone say, ?Boy, that?s a nice deal you?re driving!?
Ken Shaw Jr. is President of the Toronto Automobile Dealers Association and is a new-car dealer in Toronto. E-mail comments to president@tada.ca
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