Auto Trends

Now Is The Time To Buy A New Car

In case you hadn’t realized it yet, we’re currently in the midst of one of the worst downturns the auto industry has seen in decades. Year to date, sales are down by 15%, but that figure is much higher for some automakers, including Chrysler where sales have dropped by more than 25% this year.

Bad news for the auto industry coupled with the calendar year coming to a close means one thing: passenger vehicle discounts have never been better, giving you an excellent chance to buy a new car for a lot less money.

Keep reading and we’ll take a look at five steps to help you save money on your new car:

1. Do Your Own Research - You may be fond of a particular make/model, but does that car live up to its hype? For an objective look at what experts say about the vehicle you like, make sure you acquaint yourself with reviews from The Truth About Cars, Consumer Reports, and other no holds barred publications.

2. Shop Around - Through the end of the year, the deals being offered will include some of the best seen in years, but shop around for the biggest savings. Take a look at what is being offered - low-cost financing, cash back, or a special lease deal - weigh each plan by learning which one is best for you. Also ask about military discounts, new grad rebates, and other offers available on top of already great savings.

3. Arrange Your Own Financing - If you can pay cash for a new car, you’re in the best position when it comes time to negotiate. You’ll determine the final price you pay for your car while reaping the benefits of all of the discounts being offered to you. But, if you’re like the majority of drivers, you cannot afford to pay cash. Instead, you can arrange your own financing before you set foot in a dealer’s showroom. Your rate may not be as low as what Ford Credit or Mitsubishi Motors Credit has to offer, but you can take manufacturer cash discounts instead and still come out ahead.

4. Compare Warranties - These days, all cars offer some sort of warranty on various parts, maintenance, powertrain, etc. The better the coverage offered, the less you’ll have to pay out of pocket down the road should something happen to your car. Consider buying a car that comes with a comprehensive warranty, forgoing the dealer warranty plan that can set you back an additional $500 to $1500 or more.

5. Contact Your Insurer - Before you settle on a particular car, why not call your auto insurer to get a quote on insurance coverage for the coming year? The results may shock you - that little Fit from Honda may cost you more money to insure than the Ford Focus thanks to crash worthiness tests conducted by the Insurance Institute for Highway Safety (IIHS), an industry advocacy group that sees how well cars hold up in a crash.

By doing your own research and taking your time comparing the deals being offered, you stand to save thousands of dollars off of the purchase price of a new car. Great deals won’t be around for a long time and when the market begins to recover, they’ll soon become as rare as hen’s teeth.

Here’s a terrible thought: you’re planning to trade in your gas guzzler for a Toyota Prius, that famed hybrid car offering industry leading fuel economy, when you learn that the price you can expect to pay for the car has increased by $650. Sure, car prices go up all the time, but when you realize that the cost of the car has now topped $22,000, you begin to wonder if your investment in worth it.

Like all automotive manufacturers, Toyota is feeling the heat from skyrocketing raw material costs, including steel, and needs to recoup these increases by selling their cars for more money. However, this news may cause consumers to weigh their options including foregoing the hybrid for an economical gas model, such as the Toyota Yaris, a commuter car that gets 35 mpg and sells for $10,000 less than the Prius.

Some would argue that a hybrid car is always of more value than a gas model, particularly a car that returns at least 45 mpg on the highway, an advantage of 9 mpg over the Yaris (14 mpg combined city/highway). But, as consumers can quickly see, making up the cost differential between these two Toyota models can take years even if gas goes back up to $4 per gallon.

Let’s take a look at a chart comparing the Prius and the Yaris to see what kind of savings is realized after about seven years of driving or 100,000 miles:

Toyota Prius

• Gas: $4.00
• Miles Driven: 100,000
• Fuel Economy: 47 mpg combined
• Gallons Used: 2127
• Cost: $8511

Toyota Yaris

• Gas: $4.00
• Miles Driven: 100,000
• Fuel Economy: 33 mpg combined
• Gallons Used: 3030
• Cost: $12120

In the seven year time frame you would save $3609 in fuel, but still fall short by about $6400 for what you paid for the Prius. Of course, if you’re comparing your Prius purchase with getting rid of your 20 mpg combined city/highway 4WD Toyota Tacoma pickup truck, you would come out exactly even at the end of those seven years. Two very different vehicles I might add, a radical lifestyle change you’ll need to be prepared to make.

I’m not saying to avoid buying the Prius or any other hybrid and federal as well as state tax credits could make your purchase more affordable. What I am saying is that if you’re panicking over high gas prices and think that a hybrid model is always the answer, you could be wrong. Unless, of course, you plan on keeping your car for many, many years as a long term investment in your fuel conserving effort.

Copyright 2008-2012 — Matthew C. Keegan is the owner of a successful writing and marketing business based in North Carolina, USA. He manages several websites and is a contributing writer for Andy’s Auto Sport, a retailer of quality Lamdo doors and ground effects.

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