Kip Tips
How to Drive Home a Bargain
Follow these tips to get the best deal on a 2010 car.
By Cameron Huddleston, Contributing Editor, Kiplinger.com
January 27, 2010
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At the end of 2009, it was easy to find a deal on a new car. Dealers were desperate to clear inventory and were piling on incentives to lure buyers onto their lots.
This year dealers aren't so desperate. However, that doesn't mean you can't get a bargain. Jessica Anderson explains how in the March issue of Kiplinger's Personal Finance:
As manufacturers bring production in line with demand, expect the number of insane deals to dwindle. Cash-back offers will likely stay below the 2009 industry average of $2,800 per vehicle. On the other hand, low-rate financing will stick around in 2010. For example, General Motors was recently offering 0% for 72 months on the majority of its models, and even Porsche had 1.9% financing deals on the table. Plus, lease deals are more plentiful because Detroit carmakers are back in the leasing market.
Usually you have to choose either the carmaker's low rate or the rebate. In general, if you plan to trade in the car within three years, take the rebate and bring your own financing. But make sure you negotiate the price of the car before subtracting the rebate. Credit unions are maintaining a presence in the auto-finance market with attractive rates; new-car loans recently averaged 6.4% for four years, compared with 6.8% at banks.
If you'd rather take the low-rate loan, note that to nab the lowest rates from the automakers' finance companies, you'll need a credit score of at least 720. If you don't have a score that high, you may be able to trim the interest rate by coming up with a bigger down payment.
To get the best deal, make dealers compete against one another. Start by e-mailing several dealers to see which has the vehicle you want at the best price. For an idea of what you should offer, log on to www.truecar.com for actual transaction price ranges. If you hate to haggle, consider using Kiplinger's partner, CarBargains, the buying service of the nonprofit Consumers' Checkbook organization. For $200, CarBargains will get five dealers in your area to bid against each other for the car you specify.
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Reader Comments (1)
Posted by: Mike at 05/26/2010 10:56:49 AM
I just used their service and it is NOT worth the money! All they provided me was a report that I could have obtained from truecar.com or edmunds.com or kbb.com--how is this useful? Their site leads someone to believe they will get bids from 5 dealers--B.S.! All I got from them was several that said 'dealer refused to bid' and the ones that did only gave 4100 off invoice...big deal. I can get that on my own. One of the dealers I called actually said they never worked with this 'car bargains' service and didn't know what it was about but bid anyway--great--now I have to explain how this is to work to a dealer??? is that a joke?? I was under the impression, based on all those shining reviews shown on their site, that CB was going to get them to bid aggressively and actually save me some worthwhile money. Not so. I would NOT recommend them to anyone as their service is minimally useful and most, if not all, of the information anyone can get on the free internet sources. It's the same numbers and pricing so where is the value for the $$$$. Worthless service if you ask me.