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New Rules of Car Buying

OLD RULE: Spend a Saturday kicking tires on dealership row to decide what you want.

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NEW RULE: Stay home, do your research online, and only visit dealerships for test drives.

ADVICE: There are many ways to research new vehicles online, from magazine websites to the automakers’ own sites. Consume the info, take notes, make a spreadsheet if that’s your thing—but do it before you head out to shop. When you reach the dealership, make the test drives count.

OLD RULE: Stretch your budget to get a nicer car by leasing.

NEW RULE: Consider a lightly used car, especially a certified pre-owned (CPO) one.

ADVICE: Leasing gets you into a nicer car than you probably thought you could afford, but it comes at a cost. You’re not actually buying anything when you lease; you’re paying the difference between the sale price and the car’s forecasted end-of-lease residual value plus interest and fees. A wise alternative is to buy a relatively new used car, letting the original buyer pay the initial chunk of depreciation, which is the biggest hit on a percentage basis.

OLD RULE: Play it safe and only buy on a carmaker’s quality reputation.

NEW RULE: Consider the flattening trend in new-car-quality surveys. It may not be worth paying extra for a brand because it has the highest quality score.

ADVICE: J.D. Power’s quality awards and the surveys that create them are frequently used by automakers as advertising cudgels. But what those proud carmakers often don’t mention is that quality is up across the industry.

OLD RULE: Look for last year’s model to get a killer deal.

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NEW RULE: Wait for a redesigned model. The rapid pace of technology means it’s likely to offer more features and better fuel economy.

ADVICE: This is where doing your research pays off, as any deal on a leftover from last year needs to be weighed against other factors. The first is whether the discount is greater than the loss of value the car has already suffered while it was waiting for you to drive it home. When it comes time to trade it in or sell it, the car is still going to be that one-year-older model, which will make it worth less.

OLD RULE: Buy a new car when your old one wears out.

NEW RULE: Start shopping before you need a new car to make a more informed decision and save money.

ADVICE: For most people, cars are the second-largest purchase they’ll ever make after their home, and similar care should be taken in the buying process. Not feeling pressured to close a deal means you can take advantage of opportunities that arise at the end of the month or the end of the quarter. That’s when dealers can get desperate to move the metal, either to secure bonuses from the automaker for meeting sales goals or to avoid paying inventory costs.

OLD RULE: Cash is king. Offer to pay cash to get a better deal.

NEW RULE: Arrange your financing through the dealership.

ADVICE: The dealer can often get you financing as good or better than your local credit union or bank can, with the dealer still making something off the markup, or “reserve,” on the interest rate. If the dealer can earn a profit on that end of the deal, you may be able to negotiate a lower price on the car.