Purchasing vehicles

Steps to buying a new car

Step 1:  Know your buying style

Even with the large amount of automotive information available on the Internet, many people still purchase a new car within only a few days of deciding to buy. This underscores the importance of doing your homework, so you can make an informed buying decision.

Remember, as a buyer, you are the one in the "driver's seat" throughout the entire car-buying process. You'll be making many choices along the way before you even step into a dealership. With plenty of reliable information available, "virtual car shopping" can be a lot of fun. So, even if you already have a strong sense about the vehicle you want, take some time to start your search with a "blank slate" and you may be pleasantly surprised by the outcome.

How do you start? It's easy. Take a look at the following types of shoppers and decide which one best describes you. After that, begin your vehicle search by using one of the convenient short cuts shown below or simply follow all 10 steps of Buying by the Book to cover all the bases.

Price Shopper
You want the best possible price available to get yourself from point "A" to point "B."
Short Cut: Use the Perfect Car Finder to search for a vehicle by price.

Value Shopper
You want a good price, but you are willing to pay a premium for quality.
Short Cut: Check out J.D. Power quality ratings on the vehicles you are interested in.

Image Shopper
You are concerned with what your vehicle says about you. Does it project a desirable image?
Short Cut: Review the top most researched vehicles in the category you're shopping.

Methodical Shopper
You enjoy the chase as much as the conquest, and cover every base, becoming somewhat of a new car "expert."
Short Cut: Go through the entire "Ten Steps to New Car Buying" process.

Whatever your shopping style, the information you gather and the effort you put into the process will serve you well and help you to avoid the "buyers remorse" that sometimes accompanies expensive purchases.

Step 2: Narrow Down Your Shopping List

Let Your New Car Find You

The time has arrived and you are officially in the market for a new car or truck. With all the choices available—over 250 new makes and models—how do you narrow-down your list? To some extent, your lifestyle can help. Imagine the activities you'll experience in your new vehicle. Car manufacturers actually build cars with "life stages" in mind. For instance, if you have small children, you may desire a larger, safer vehicle. Perhaps you care more about performance or high style. Or maybe you have a job in sales and need a car suitable for taking clients to lunch.

When considering the purchase of a car, everything counts: number of seats, number of doors, size, performance, color, style, comfort and sometimes even towing capacity. The key is to narrow your search by creating a viable "short list" of car choices before ever stepping into a dealership. Where to start? Well, with the convenience of the Internet can help you narrow down your consideration list in a very short time.

Side-By-Side Comparisons
Another tool that will help you narrow your search is the Side-By-Side Comparison where you can compare specifications and see which features are standard or optional on each new car. This is an especially helpful exercise when you are down to just a few vehicles and want to compare "apples-to-apples."

Step 3: Do Your Research Online

What makes a new car the best new car for you?

With the incredible amount of data available, what specifically should you research? Of course there's pricing and equipment options to consider, but what else should be of concern? Other important facts to discover include information about safety, quality, and 5-year cost of ownership. These ratings can help you achieve some needed peace-of-mind. Then, the frosting on the research cake is owner opinions and expert reviews.

Safety
There are two ways to look at safety. One is "passive safety" which assumes that even if the driver does nothing to avoid an accident, the vehicle itself should be built for protection. These features include airbags, crush zones, reinforced steering columns and the like. The other is "active safety" which provides the driver with tools to avoid accidents while driving, such as antilock brakes, traction control, rack-and-pinion steering and all-wheel drive.

The relative importance of these features will vary based on the aggressiveness of your driving style. Are you an extremely attentive driver or are you sometimes forgetful and distracted? Of course, all safety features are valuable, but some may be more preventative and helpful depending upon your personal driving style. Checking safety ratings online with NHTSA will give you a good idea of how your prospective vehicle's safety features stack up.

Quality
An online analysis of how your favorite vehicles rate in quality can be a true eye-opener. Years ago, quality referred only to the "absence of defects" in a car. Now, research organizations like J.D. Power have expanded their research analysis to also cover things that "go right" with new cars.

This valuable information is provided in the form of J.D. Power Circle Ratings. On the "absence of defects" side, you can find out how the car rates in mechanical, feature and accessory quality, and the quality of body and interior. For "things gone right," you'll find ratings for performance, creature comforts and style. There's also a score for the dealership experience based on the J. D. Power "Customer Service Index."

5-Year Cost of Ownership
The next best thing to owning a functioning crystal ball is to research the cost of ownership of your new vehicle. This tool provides a monetary figure based on the average cost of operating your car over a 5-year period. The experts at IntelliChoice have created a system that factors depreciation, financing, insurance, state fees, repairs, maintenance and other applicable fees to calculate the total cost to own the vehicle over a 5-year period.

Expert Opinions
Another way to gain confidence in your purchase is to spend some time reading what the experts have to say about your new vehicle. Reading the opinion of experts before the test drive serves many purposes; you can discover the strengths of the car's performance; see how the vehicle compares in its class; and discover things like how the vehicle does on longer trips and more.

Owner Opinions
The opinion of owners is also a valuable resource. With this tool you can discover how recent new car owners rate their new cars. A short visit to the owner review section of kbb.com will give you access to more than 17,000 reviews in a searchable database with personal ratings and comments. After you purchase your car, you can submit a review of your own car to help others make an informed decision.

Step 4: Leasing vs. Buying

With rising car prices, creative financing has come to the forefront, tempting us with promises of "zero down" and "low monthly payments." In all finance scenarios, however, some sort of fee is attached — the question is, which financial approach best meets your needs?

Leasing
Lower monthly payments and less money down can make leasing seem like a great deal. The truth is that leasing offers a great deal of convenience, but only if you are willing to put up with restrictions. Restrictions can include lower mileage limits — typically only 12,000 miles per year — diligent upkeep and care of the vehicle, and in some cases, penalties for early termination.

After a lease deal is offered to you, be sure to pay close attention to the negotiated purchase price of the vehicle, any additional fees outside the "lease rate," and never sign a lease contract unless the residual value or optional purchase price at the end of the lease is clearly shown.

You are a good candidate for leasing if you prefer to have a new car every few years, put limited miles on your car and/or can write off your car lease as a business expense. A quick way to find out if leasing is right for you is to take our short quiz to determine your "lease friendliness."

Buying
Before considering the purchase of a new car, it is wise to establish the amount you are willing to spend or calculate the monthly loan payment. Don't forget that after negotiating the final price of the car, you will need to allow some extra cash to cover tax, title and in some states, registration.


Quick Glance Lease vs. Buy

Step 5: Sell or Trade Your Current Vehicle

Like most do-it-yourself projects, selling your own vehicle to a private party can be cost-effective. In contrast, trading-in your current vehicle at the dealership certainly seems much easier!

Before buying your next vehicle, consider the pros and cons of what to do with your current vehicle and make an informed choice.

Trading—Pros & Cons
Trading your vehicle at the dealership may be quick and easy but it may not always be painless. The upside of trading is that the dealer does all the paperwork. After settling on an acceptable price, all you have to do is sign the vehicle over and be done with it. The price you pay for the convenience of being relieved of your vehicle may be less cash in your pocket than if you sold it yourself. Some people expect the dealer to give them the retail value of their vehicle and are often disappointed by the offer presented to them. To avoid any surprises, you may want to get an online value of your vehicle before you go to the dealership.
This number—based on the condition of your vehicle—is a more accurate representation of what you may expect to be offered.  The values can fluctuate wildly, depending on the make and model of the car, and the laws of supply and demand.  High gas prices have brought the value of SUV’s down, therefore hurting the value of those vehicles.   Keep in mind; the dealer must also assume the responsibility for preparing your trade for resale. This process usually includes mechanical and smog inspections, repairs to make the car ready for sale and warranting the vehicle for the new owner.

Trading can also help if you owe more than the car is worth on your old vehicle's loan. The dealer can roll the remaining balance of your current vehicle's loan into the new loan, thus allowing you to trade-in your vehicle without having to shell-out additional cash. While this is not advisable—because it inflates the loan beyond the new vehicle's actual value—it is an option for those who must get out of their current vehicle.

Selling—Pros & Cons
Selling your car on your own can sometimes get you more dollars, but requires patience and good judgment. First, you will need to determine a fair asking price. Blue Book® Private Party value will give you a price based on the vehicle's condition for you to calculate the value of your vehicle in a consumer-to-consumer transaction. Be aware, you may have to absorb the cost of making the car presentable and passing any required state inspections or emissions tests. And remember, first impressions are important, so keep the car free from "stuff" while it's available for sale. You must also figure what your time is worth, because you will need to be available to answer questions and make appointments for people to see the vehicle and take it for test drives.

Another downside to selling your car yourself is that you may be contacted by some unsavory individuals, or people with whom you just don't feel comfortable. You need to have good instincts about people and have strong negotiation skills. If you do decide to sell your car yourself, be sure to put everything in writing and request payment in the form of a cashier's check. Personal checks can bounce and cash in large quantities is not wise to carry on your person.

If you decide to sell your car yourself, there are several options available to advertise your vehicle to potential buyers.

• Ebay, Craigslist, or a third party listing service like cars.com or autotrader.com
• Advertise in local newspapers or printed selling guides for a more local audience.

Points to Consider When Selling Your Car

• Make your car presentable. At the very least, a good wash and wax of the exterior and complete vacuuming of the interior is in order. If you really want to impress potential buyers, take the car to a professional detailer and have them clean the interior, exterior and engine.
• Sell your car AS IS, you are not a dealer and there is no warranty or return policy in effect.
• Try to have all service records complete and neatly arranged for your prospective buyer. This will instill confidence that the car has been well cared for.
• Be honest. Disclose any serious problems or repairs needed to pay for to make the car tip top.
• Don't be offended if someone wants to have the car checked out by a professional—in fact, take the vehicle to a shop before you start price negotiations.

Quick Glance Trade vs. Sell

Roush Honda