This article was originally published in July 2019 and has been updated based on current market conditions.
Our customers often ask for advice about buying their next car— especially as the market struggles with inventory shortages and climbing prices.
What questions should you ask the dealer if you’re in the market for a vehicle? What steps should you take once you find the car your want? We know it can be a daunting process, so here’s our best advice for buying a car:
Decide how much money you have to spend, and what kind of car you really need.
Setting a budget is usually pretty easy– just a little number crunching. Figuring out what you need is not so simple.
As with any big purchase, it’s important to know how much you can spend. On the budget end, it’s important to factor in the extra costs of both buying and owning a car, from startup costs like your registration and title fees, inspection costs, to recurring costs like regular maintenance, monthly insurance, and gas. It’s also important to consider depreciation over time– your car starts to lose value the moment it leaves the dealer parking lot– and factor that into your long-term financial planning, especially if you’re leasing. Figure out what you can realistically afford and make sure to stick to your spending limit.
Once you have a budget, you can dive into the decision-making process. In general, people tend to buy more car than they actually need. A car personal and expensive item to invest in. Most people find themselves making an emotional purchase, driven by the “heart” (or “gut”) and rather than logic. That’s why it’s important to think realistically about the car and the features you need for your lifestyle instead of following the latest trends. Test something a little smaller or a little older than the car you were thinking of and give it active consideration.
Do your research.
In this day and age, most car purchases start online which means that buyers entering the showrooms are more informed than they used to be. If you want negotiating power at a dealership, it’s important to know your stuff.
Consumer Reports reliability ratings are one of the best guides for how cars hold their own over time, which is an important thing to consider when buying a used car; JD Power’s Initial Quality Studies measure how a car performs when it’s brand new out of the factory. It’s also helpful to look at sites that help you fit a car into your long-term budget like Kelley Blue Books Five-Year Cost to Own information. This does not mean you should run out and buy a car that has good ratings but it’s helpful to know what you’re getting and what it’s really going to cost you in the long run.
If you really want to be in a good position to negotiate with a dealership, you should also look up the target car’s invoice price, a.k.a. what the dealer paid for it. This is different from the MSRP which is the “manufacturer’s suggested retail price.” Ideally, you want to arrive at a price that’s closer to invoice than to MSRP. You can also look up the average transaction price (ATP), which will give you a sense of where most purchases of that model are currently ending up. Be sure to check for incentives and ask about rebates, and keep an eye out for hidden fees.
Ask for help.
If you ever have questions about a vehicle, just ask us! V&F Auto Sales has been serving the Western Mass community since 1988, providing our customers with a quality, affordable vehicle inventory and convenient financing options. You can view a complete list of our inventory on our website, or visit us at 7 Harding St, Agawam, MA 01001.