Just about every other TV commercial is from an auto manufacturer around this time of year, but you can score big with the right holiday car buying tips. Take look at some of the best insider tips that will save you money on a new vehicle.
Look for Rebates in Your Area
Vehicle manufacturer rebates are based on the region where you live in the U.S. If you see an offer on a rebate for a vehicle, be sure to check with your local dealers to see if you qualify for a rebate. While some rebates are nationwide, many are not. Look online for manufacturer rebates before your holiday car shopping begins.
Buy on the Last Day of the Month
Dealerships encourage their sales team to sell vehicles that have been on their lot for a while. Dealers have to pay what are called flooring and interest expenses on every vehicle, the longer a car sits on the lot, the more they pay. Ask your sales representative if you can test drive one of these types of vehicles. You may also be able to qualify for deals on financing since the sales and the finance teams have to make their monthly quota to achieve their bonus structure.
Ask for the Interest Buy Rate
Ask the finance department what “buy rate” their lender is giving you—especially if you are buying on the last day of the month. There are buy rates and sell rates. The buy rate you qualify for might be four percent, however, the sell rate (what the dealer charges you), might be six percent. The dealer keeps the difference from the finance company if they can get buyers to go for the sell rate. Simple ask what the buy rate is, if he/she refuses to tell you, go to another dealership.
Holdback
Holdback money is what the dealership receives when a new vehicle is placed into their inventory. This money comes from the manufacturer and is received almost immediately. That means the dealership already spent the holdback money on long-on-the-lot vehicles therefore, tell your sales person you want a sales price less than the holdback dollars.
Consider a Demo
Another holiday shopping tip is to consider a dealership’s line-up of demo vehicles. These cars consist of loaners from the service department or vehicles management drives for a period of time (around 2,000 miles). These come with great benefits and a much lower sales price.
Wait for the New Year for Used Vehicles
Dealerships make most of their money by selling services and parts, new cars sales and selling cars from the used vehicle lot. These consist of mostly trade-ins that have been serviced to meet manufacturer specifications. These cars are highly marked-up. Research what a used car should cost you online. Most dealerships will not edge off the price of a great used vehicle since they are not paying for flooring and interest, meaning they are willing to wait it out until they find the right buyer. If you do see a used vehicle you like on a lot, get the VIN (vehicle identification number) and look up the vehicle. Find out what that car it really worth, before you accept a price. Make sure you get the mileage and any aftermarket add-ons the vehicle might possess to get an accurate estimate.
Extended Warranties
Skip the extended warranties at the dealership and do a search for “vehicle extended warranties.” The warranties the dealership offers you are marked up as much as 150 percent. It is a good idea to get an extended warranty on a used vehicle that has no manufacturer warranty remaining, but be sure to do some comparisons on pricing. One of the most surprising holiday car buying tips is to skip the extended warranty if you are buying a brand new vehicle, a demo or a used vehicle that has a lot of its manufacturer warranty left on the vehicle. Vehicles today are manufactured so well (for the most part), if any parts do fail, they will be covered under the manufacturer warranty. There is no need to buy an extended warranty for a new vehicle.
GAP Insurance
This is a great thing to purchase from the dealership and it’s inexpensive. As soon as you purchase a vehicle and drive it off the lot, the value begins to depreciate. If you have a loan on the vehicle and you are in an accident, your insurance may only give you the book value on the vehicle. This many not be enough to pay-off your vehicle loan but GAP insurance will pay the difference so you have no out of pocket expenses. Most dealerships sell this for around $150 to $300 and it can be financed into the price of your vehicle.
