Its important to learn how to buy a new car because the cost of a new car is second only to a house as the most expensive purchase you will ever make…and it won’t appreciate like a house will during economic upswings.

The average price of a new car sold in the United States is about $32,000.00. That’s why its crucial to know how to negotiate and deal with car salespeople when buying a new car. Anything less and you can expect to get very expensively screwed!

How To Buy A New Car…

• If you figure out what car model and options you want BEFORE buying a new car, then you will be less apt to make spur-of-the-moment decisions based on emotion. Emotional decisions when buying a car can and probably will cost you thousands of dollars more.

• You can learn how to buy a new car by looking at magazines online, at the library or at a bookstore, that discuss new cars. Try to find out what the dealer costs for the new car you want.

• Compare models and prices in newspaper ads. Consider contacting car buying services to compare prices. If (and thats a big IF) you can go to a car dealer to ONLY look at this point without caving into pressure to buy a new car, then do that too.

• I know this may seem obvious, but you are going to want to negotiate the price when you buy a new car. Dealer profit margins are usually between ten and twenty percent, which is usually the difference between the manufacturers suggested retail price (MSRP) and the invoice price.

• If the car you want isn’t on the lot then you might want to just order a new car.It may take some time, but at least it will be exactly what you want and you won’t be paying for options that you don’t want. However, because of incentives offered to the sales person, you might be able to negotiate a much lower price on buying a new car that is already on the lot. So if want you want isn’t on one lot then just start calling other dealers. Get them to promise that the car you are describing is really there because some salespeople will promise you anything over the phone just to get you on their lot.

New Car Buying Terms…

Part of knowing effectively how to buy a new car involves some terms you will need to know:

• Invoice Price: This is what the manufacturer has charged the dealer for the car. This is often a higher price than the dealers final cost because of allowances, discounts, incentives and rebates. The invoice price should include destination and delivery (freight). Make sure you don’t get charged twice for freight.

• Base Price: This is the cost of the car without options. Base price will include the factory warranty and standard equipment and is shown on the Munroney sticker.

• Munroney Sticker Price (MSRP): This will be the sticker shown on the side window and is required by federal law. It includes the base price, manufacturer options, the cars EPA gas mileage and manufacturers transportation charge.

• Dealer Sticker Price: This is the MSRP plus the suggested retail price of dealer installed options like, additional dealer profit (ADP), dealer preparation, undercoating, and additional dealer markup (ADM).

Okay, those are just a few of the basics for how to buy a new car.