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Year-End Car Buying Season

How to negotiate a good deal

Did you know that more cars are purchased between September and December of every year than in the rest of the year combined? That makes now the official beginning of car buying season—the time when dealers are cutting prices on this year's models to move them off the lot in advance of 2011 arrivals. But do you know how to negotiate the best deal? You soon will…

Get competing quotes.

Before you set foot on the lot, visit sites like InvoiceDealers, Yahoo! Autos, Edmunds.com, MyRide.com and CarsDirect. Enter identical information on your desired vehicle and get the dealer invoice cost. Armed with at least half a dozen quotes, you'll know the true value of your vehicle—and the dealer would be hard pressed to argue with your data. While on these sites, also search for the factory-to-dealer incentives and customer rebates (especially popular this time of year). These will help when it comes time for you to make your offer.

Know what to offer.

You may think working off the manufacturer's suggested retail price (MSRP) is the way to go, but there's a better way. Make an offer based on the dealer's cost, and then add on a fair profit. While the dealer cost is not the factory invoice price, ask to see the invoice anyway. The dealer cost is actually the invoice price minus factory-to-dealer incentives (which you found online) and also minus factory holdback (which you can find on the invoice). After you calculate the dealer cost, add a fair profit, such as 3 to 5 percent. If there was also a customer rebate (which you would have found online), that's additional money you will be getting back.

Don't talk about payments and payment methods.

If you tell the dealer you only want to pay $300 a month for your vehicle, they can make that work using a number of tactics (lowering the MSRP, financing, etc.), but you will not likely be getting the best deal. Make sure you negotiate the price of the car based on its value, not the monthly payment. Also, don't talk about your form of payment (cash or financing) until you agree on a sales price. Dealers may say it will affect the price, but it shouldn't.

Don't be fooled by zero percent financing.

Most likely you won't get it anyway—only one in 10 do! This is also used to sway consumers toward the MSRP because they think they will save much more money with this financing offer. However, based off the information you have learned above, you would probably be better off making an offer based on the dealer's cost, then financing it through Local Government Federal Credit Union, where all North Carolina local government employees can join and currently enjoy rates on new and used vehicles starting at 4.75 percent! Visit www.lgfcu.org for more information.

Happy driving!