Buyer Navigator Step 3: Preparation & Research

The Most Important Thing to do: Knowing True Market Value. Luckily, you're in the right place. AutoNetDirect is a great resource for car buyers, whether you're shopping for your first car or your tenth. That's because every new car buyer needs one essential piece of information in order to negotiate effectively: True Market Value .

True Market Value is the price at which the cars are currently being sold in the marketplace. This is not the invoice price (what the dealer paid for the car) or the Manufacturer's Suggested Retail Price (what the dealer would like you to pay for the car). True Market Value is the price at which you should buy the car. To give you a little background, new cars will always have a price tag in the window that is clearly visible, hence the name "window sticker." The total price listed is the MSRP. As with any other high-priced piece of equipment, the MSRP is what the manufacturer suggests the retailer charge the customer. Salespeople will eagerly quote the MSRP to you, because if they can get you to pay MSRP for a new vehicle, they're making the most commission.

Fortunately, we live in a free market economy that is governed by supply and demand, and, of course, taxes. And with capitalism, there usually comes competition. Supply, demand and competition are the factors that allow new car buyers to pay less than MSRP for a vehicle (in most cases). Buyers have to be aware of how the dealer-manufacturer relationship works to avoid paying too much money for a new car. AutoNetDirect recommends you do all of your homework. So, the thing to know is the True Market Value price listed on our website. Once you are armed with this, you can and will negotiate a fair deal.

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1. Start with the True Market Value price on the AutoNetDirect.com website under Buy new cars or
2. Figure out what how much of a discount this is from the listed MSRP. Is it a 3% reduction? A 5% or 6% reduction?
3. Total the options on the car that you considering.
4. Reduce the options by the same percentage as the vehicle. In other words, if the vehicle is reduced by 5%, reduce the total options by the same figure.
5. Reduce the True Market Value price by any current incentives and/or rebates (Incentives are reduced now-but rebates come after tax is added.)
6. If you agree to pay an advertising fee (remember, this fee is negotiable), it should equal no more than 1% of the car's value, or $200, whichever is less. The advertising fee is what the dealer pays to various local and regional dealers associations for brand advertisements and sometimes passes on to the consumer. Some manufacturers directly charge dealers an advertising fee and some do not. Many dealers successfully pass this fee on to the uninformed consumer, but you should know that the dealers sometimes negotiate the cost of an advertising fee and can write this business expense off as a tax deduction, anyway.
7. You now have your target price for the vehicle you want to buy. This is the price you can offer to a dealer. Not only does this represent a fair profit for the dealer but it is a good deal for you.
8. Add sales tax and applicable fees. (Sales tax is figured on the taxable total, which does not include licensing and registration fees. )

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It is important to purchase a car that fits your immediate and future needs. A vehicle reflects an image an owner wants to project. But while a sports car may be the ideal of a person who happens to work in the sales field, it might not be the best vehicle to drive clients or lug samples around in. Similarly, a stay-at-home mother of three may see the practicality of buying a minivan. A compromise is usually possible. For the businessperson: a sedan with a manual transmission and a monster engine. And for the mother of three: a full-size sport-utility vehicle or sporty wagon. But be sure to plan ahead, as we encourage this thought for you at AutoNetDirect. You may end up keeping the same vehicle for the next six or seven years, so try to anticipate future needs and lifestyle changes.

There are several different classes of automobiles on the market. By class, we mean sport-utility vehicle, van, roadster, sedan, coupe, pickup, station wagon, etc. Deciding on a class of vehicle also revolves around money. So think about how much you want to spend, how much you want to put down, and how much you can afford per month ahead of time. Don't wait until you're in the dealership to come up with these estimates. Be prepared always. "You'll be glad you did".

Once you've decided on a class, look at individual models. Midsize sedan shoppers, for example, should read up on several different sedans before narrowing down the list (there is a smorgasbord of midsize sedans on the market). Sport-utility vehicle shoppers should gather as much information on the different trucks available from web sites, magazines and dealerships.

A note on gathering information from dealerships: As most people know, it is extremely difficult to sneak into a dealership and snag a brochure without being approached by at least one salesperson. To avoid getting sucked into a conversation you are not ready for, carry a clipboard, briefcase or notebook into the dealership with you, walk briskly to the counter or brochure stand and take what you need. Salespeople will notice if you're taking notes and label you as a "shopper" rather than a "buyer," so keep your notes in plain sight. Also keep the brochure out so that you can compare colors with the actual cars on display. If a salesperson asks to help you, be up front and tell him that you're merely doing some research on the vehicles that interest you. If he presses you, counter with a question, such as, "What time do you open tomorrow?" or "Could I have one of your cards?" Take it, thank him and walk away. They now feel sure that another salesman won't get your business.

Something else to remember about the "meet and greet" process is that you can and should choose your salesperson. Don't let them choose you. Customers tend to gravitate toward someone who is like them (women to women, young to young, old to old, etc. If you do find someone that you have a rapport with on this fact-finding mission, but are not ready to buy, take his or her card and make an appointment for a later date. Don't come into the dealership two weeks later and expect that person to be available; always make an appointment so that you don't get shoved off onto someone else.

After you've compiled the information on the vehicles you're interested in, compare them to one another in detail. If it helps, you can even make a chart comparing standard equipment, invoice price and MSRP, cost per option, and colors. Another thing to look at is the performance of a vehicle. Specifications, or "specs" include engine size, horsepower, number of cylinders, curb weight, gas mileage, etc. After you've done your homework, cut your list down to three possibilities. This will help later when it comes to negotiating with a dealer.

Need Advise? Check here at AutoNetDirect. Our associates and partners offer all of this to you on this website.
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