Money Power: Shop savvy to strike a good deal on a new car
BY JESSICA ANDERSON Money Power
Saturday, February 09, 2013
2/09/13 at 5:06 AM
At the end of 2012, the average transaction price for most consumer vehicles hit a record high of $31,228 - up $542 from a year earlier.
Some of that increase can be traced to pricey options, such as infotainment systems, and some is due to carmakers' retreat from cash rebates in a robust sales environment. (Notable exceptions are large trucks and SUVs, which still often come with $3,000 or more cash back.)
Credit is cheap, however, so you'll find plenty of financing deals. Bankrate.com recently pegged the average rate for 60-month loans at 4.24 percent at banks and 4.06 percent at credit unions. Automakers are offering 0 percent on many models, and rates of 2 percent to 3 percent on others.
Leases aren't just for luxury cars anymore. Leasing is expected to account for nearly 30 percent of new-car transactions in 2013, and mainstream automakers, such as Honda and Toyota, are offering stellar deals on models at all prices. Even costly EVs, such as the Nissan Leaf and the Chevrolet Volt, are quietly being leased for less. Check for deals on Edmunds.com at tulsaworld.com/edmundscardeals
Before you set foot on a dealer's lot, do your research on how much others are paying, and don't forget to factor in your trade. At TrueCar.com, you can compare new-car pricing and incentives, and a price report will show the vehicle's current average transaction price, as well as a target price and how it compares with the sticker price.
To find average transaction prices for your trade-in, go to tulsaworld.com/edmundscardeals and use the Appraise Your Car tool.
Used cars are still in short supply, so values are high and dealers are eager to get their hands on recent models.
"You have more bargaining power than ever before," says Rebecca Lindland, of IHS Automotive, a forecasting and analytics consultancy.
If you find negotiating with a dealer as appealing as getting a colonoscopy, try a buying service. TrueCar offers no-haggle prices through dealer partners on its website. But you'll likely end up with a better deal using CarBargains.org, the service of nonprofit Consumers' Checkbook. For $200, CarBargains will haggle for you, and you'll receive bids from five local dealers.
Original Print Headline: Shop savvy to strike a good deal on a new car
Jessica Anderson is an associate editor at Kiplinger's Personal Finance magazine. To send her a question or comment, go to tulsaworld.com/kiplingerfeedback.