New car purchase strategies

Money Digest, June, 1996 by Talbot Stevens

Sell your current vehicle privately for the best price. If you don't sell privately, don't announce you have a trade-in until you finalize the price on the new one.

Negotiate. Expect a 5% to 15% reduction, using a "no haggle" dealer price as a reference.

Avoid overpriced options. Most people are aware that dealers make the most profit selling options. Therefore, it makes sense to avoid them if at all possible.

Don't buy the extended warranty. You're paying in advance for a risk that may not happen. You may not even own the car much longer than the period already covered by the manufacturer's warranty.

Don't buy the rustproofing warranty. It's very difficult to benefit since most policies cover only "see through" holes in the body.

Don't buy life and disability loan insurance. It's cheapter to have all life insurance needs covered with one policy.

Don't buy fabric protection, or paint sealant. Instead, scotch guard and wax it yourself.

Shop around, for both the vehicle and the financing. Compare smaller centres outside the city. Buy when dealers are trying to clear their lot, in December/January at year-end or September when new models come out. Buy at month-end when salespeople may be more eager to sell in order to reach a bonus.