Written By: Elissa Wurf


In the research phase:

1) Examine ratings from Consumer Reports or other rating sites such as J. D. Powers.

2) Also, while researching, use kbb.com to look for how much the car’s value drops when you drive it off the lot. You can do this by getting the price for a new car then comparing to the price for a used car with the same options with only 5 miles on it. You will find that cars vary quite a bit–a Ford Focus, for example, drops by 40% when you drive it off the lot, while a Subaru Outback drops by only 15%, and a Cooper Mini drops less than 10%. It’s not just lower cost cars that drop more–a Jaguar SE drops by 30%. All things being equal, a car that holds its value better is a better deal. The average, according to one site I read, is 23%.

3) It’s also a good idea to ask your insurance agent about rates before you buy. Cars with better safety ratings charge lower premiums, and cars that tend to get stolen a lot have higher premiums, as do hybrids, smaller cars, sports cars, and luxury cars.

4) Finally, in the research phase, look for (or ask the dealer about) repair costs. Kbb.com has a 5-year “cost to own” tool that is useful.


At the dealer:

1) How much is the car after fees and licensing? (Focus on the cost of the CAR, not on the monthly payment, if you are taking out a loan. It’s easy for a salesperson to lull you into a significantly larger purchase by adding just a bit to the payment and/or term of the loan.)

2) If you are getting a loan, ask about the term (length) of the loan and the interest rate. Often bank deals are better. The closer you get to paying in full, the less you’ll pay. Let us know if you want any calculations done.

3) What’s the warranty coverage? Are there any perks like free maintenance? On average, most car warranties last to 3 years or 36,000 miles. Also, is it a “bumper to bumper” warranty, covering everything from the front of a car’s bumper to the back, or a “powertrain warranty” that includes everything the automaker manufactures, typically the powertrain and electrical system and possibly the A/C, but not necessarily the stereo, for example.

4) What “mandatory” fees will I pay? Dealerships can have fees that hit you as a surprise on the purchase day that you won’t know about unless you ask. Documentation fees, transit fees, registration fees, tire recycling fees, and sales tax are to be expected, but some dealers will add charges such a “preparation fees.” Also ask about the optional fees. Typically the dealer tries to upsell you on options such as “rust-proof” undercoating, extended warranties, etc, on the day you get the car. Sometimes the dealer will install “dealer-installed options” such as all-weather floor mats, paint protection, nitrogen-filled tires, or LoJacks (vehicle recovery system) to all cars in their inventory. Know that that’s an add-on with a mark-up and negotiate accordingly.

5) Has this car been used as a demo? IF so, that is a bargaining tip for a price break.

6) Has the car been damaged? Inspect the car for dings, scrapes, and evidence of re-spraying. Even new cars can get damaged in transit. Test drive the car to make sure it feels like the road-test model did.

7) Is that the best you can do? This signals to the salesperson you are ready to walk away. Be prepared to walk and negotiate to get the best price.

8) Can you deliver the car? Not only is this convenient, it tends to cut down on the sales pitches for extended warranties and other items and services, since those pitches are made by the finance manager and not by a salesperson, who is likely to deliver the car. If there is an extra you want, you can always speak with the manager by phone and have the extra added.


If you are leasing a car:

If you are thinking about leasing a car, this article has some excellent questions: https://leaseguy.crestcapital.com/vehicle-financing/14-questions-anyone-leasing-a-car-should-ask/


Please let your financial strategist know if you have any questions of if there’s any way we can help with your next vehicle lease or purchase.