President’s Day sales are usually a big event for car sellers as people have time off, and they may roam car lots and ogle the offerings.
This year, however, car sales are down 25 to 35 percent. U.S. auto makers, unions, and businesses tied to the auto makers are in intense negotiations in Washington trying to figure out what to do about the crisis in the auto industry.
News reports indicate consumers wouldn’t be interested in buying a car from a company that has filed bankruptcy, even if it’s a Chapter 11 which is a reorganization plan.
It’s all part of these Great Recessionary times.
However, if you do have the money, and you’re looking for a car, be sure to take steps so that you’re an informed consumer and can protect yourself. Because of the tough economic times, you may be able to get a good deal. However, dealers and used car lot owners aren’t making nearly the money that they normally do. You can bet they’ll be using their usual techniques to squeeze every cent they can out of you. And, they may even have developed some new antics.
Here are some tips from the Consumer Protection Bureau of the New Hampshire Attorney General's Office on purchasing a new car:
- Shop around to get the best possible price, and be aware that negotiating for the best price is always an option.
- Know the terminology: Invoice price is the manufacturer's initial charge to the dealer, and the base price is the car's cost without options included in the price.
- Determine the trade-in value of your car. Call your bank or credit union to receive an estimate.
- Don't leave a deposit with the dealer if you are still shopping around. Unless the paperwork you’re asked to sign states that the deposit is totally refundable, you are likely to forfeit that money if you choose to purchase from another dealership.
- Make sure any “warranties” that are part of the agreement are fully explained, are necessary, and what they cover is clear.
- Test drive each car you’re considering.
- Compare financing resources in order to get the best rate. Check with credit unions and/or local banks.
- Be aware that verbal representations made by a seller may not be enforceable. Make sure that all the terms of the deal are in writing.
- Consider carefully your two basic payment options, paying cash, in full, and financing. Be aware that you’ll pay more when financing your purchase, depending on the amount of interest. Before signing your name to the purchase agreement, be certain of: what the increased cost of the car will be; the number and amount of monthly payments; the length of the payment; the annual percentage rate; and whether the payments are affordable for your budget.
- Fine out whether there is a “cooling-off period” in your state for car purchases.
If you have a plan, it’s likely that you’ll do much better than shoppers who rely on instinct, impulse, and verbal promises.
For more information, see my article "Watch Out for These Top 10 Auto Scams."
Other resources on President’s Day car sales are:
“How Not to Buy a Car” – Consumer Affairs.com
“February: Best New Car Deals” – Consumer Reports.com
“Uncle Sam Wants You to Buy a Car” – CNN.com
