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7 tips to drive a hard new-car bargain

Great deals can be found on new cars. Here's where to look, along with buying tips that could save you thousands.

By Stacy Johnson Sep 14, 2010 11:06AM

This post comes from Michael Koretsky at partner site Money Talks News.

 

If you're in the market for a new vehicle, bad news for car dealers can mean good news for you.

Last month was the "worst August for U.S. auto sales since 1983," according to an Associated Press report, prompting dealers to offer bigger incentives for new-car sales. 

 

Granted, the Cash-for-Clunkers program fueled sales last August, making this August a tough month for comparison purposes. And sales were not uniformly bad. Chrysler reported that sales rose 7% last month, compared with the year before. But GM sales fell 11%. Post continues after video.

Your best bet: If you don't have fierce brand loyalty, seek out highly rated models that are having slow sales. For example, GM's Chevrolet division saw sales drop 22%, and now offers deep discounts on the Chevy Malibu, which has good reviews. Ditto with many Toyota models: Sales are down a whopping 34% from last August. Obviously, that's due to the numerous recalls as well as the economy, but even well-reviewed Toyota models that haven't faced recalls have been tainted by the headlines.

 

In short, dealers aren't doing well, so deals abound.

 

Where the deals are

 

Here are some of the promotions currently being offered, according to U.S. News & World Report:

  • Buick, GMC, Cadillac, Chevrolet: 0% financing available on many models, rebates of up to $3,000 on some -- expires Nov. 1. 
  • Ford, Lincoln, Mercury: 0% financing on most models, rebates of up to $2,500 on some -- expires Oct. 4. 
  • Honda: 0.9% to 2.9% financing on some models -- expires Nov. 1. 
  • Nissan, Infiniti: 0% financing on many models -- expires Sept. 30. 
  • Toyota: Deals vary in different areas, but 0% financing is common on some models -- expires Oct. 4.

Consumer Reports also lists the best deals on 2010 models. To get complete information, however -- like the bottom line price -- you'll have to subscribe. 

 

Here are some quick tips to get you started driving that hard bargain:

 

Financing first. Whether you're shopping for houses, cars or anything that's going to require borrowing money, always get approved for financing before you start.  That enables you to pounce on a great deal if you see one. Money Talks News has a car-loan search tool to help you find the best rates where you live. Also check with local banks and credit unions to see what they're offering. And watch this news story, which explains how to find the best car loan.

Join the club. Membership has its privileges. If you signed up for AAA because you wanted roadside protection, you also get access to vehicle research and member pricing. Same thing if you have an American Express card or belong to certain unions and trade organizations. Many community banks and credit unions can also hook you up with new- and used-car buying services, research and special pricing.

 

Go online and bypass the salesman. Edmunds, Kelley Blue Book, MSN Autos, Yahoo Finance, and Consumer Reports are all great sites to get information, reviews, financing tips and pricing on new cars. But you can use the Web for more than just finding a car. You can use it to buy one as well by pitting local dealers against one another.

 

Once you decide exactly what car and options you want, here's what to do: Go to a site called Zag.com and pick one of the sites affiliated with this buying service, such as Consumer Reports, Overstock, USAA , American Express, among others.

 

After joining one of the above sites, you'll be able to see real prices on real cars from real dealers in your area -- before you provide your contact information. That means you'll be able to pick which dealers you'd like to work with before the bidding process begins.

 

Once you've decided which dealers you'd like to compete for your business, you simply tell them what you're looking for, then see who comes back with the best price -- no salesmen, no high-pressure tactics, no worries. Once you've gotten the best possible price, go to the dealership and pick up your new car.

 

Beware the hidden fee. Like many businesses these days (think airlines), car dealers will often try to pad their profits with all manner of fees: destination fees, documentation fees, title fees, licensing fees, registration fees -- the list is long. Demand a written list of every fee and tax before you buy and attempt to eliminate as many as possible. Here's an Edmunds list of the most common fees and what they mean.

 

Investigate incentives. In the good old days (for dealers, that is), incentives were rare and modest. Not anymore. Big this month are the end-of-model-year incentives to clear the lots for new inventory. But some dealers might also offer discounts to new college grads, military members, and repeat buyers. Be sure to ask.

 

Consider the costs once you drive off the lot. You want a small car because it's more fuel-efficient? That's great. But realize you might pay more for insurance. And high-tech cars sound more reliable, but they actually lead to more costly repairs. Before you buy, check not only the price of the vehicle, but also the cost to insure it and repair it, as well as its reliability.

 

Consider "pre-owned": Finally, if you're still not sure about a new car, consider used. Money Talks News founder Stacy Johnson has never owned a new car. He now drives an $80,000 Mercedes he bought for $20,000. He explains why he always buys used here. And if you're looking for a bargain-priced used car, he tells you how to find one in this story: "8 tips for buying a $5,000 car."

 

More from Money Talks News and MSN Money:

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