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BUSINESS BASICS CHANNELS 
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Time To Buy or Lease a Car? It's vehicle clearance time again, and that spells opportunity if you are in the hunt for a new car, whether it's for business or personal use. The Internet has changed a lot about buying cars. The average new car buyer who uses an Internet buying services saves $500 over the guy who walks into the showroom ready to negotiate for the best deal available. A big part of that is the amount of information and tools available online. There is a lot of help to buy a car online. Yahoo alone lists 37 buyers' guides. One of my favorite web sites for car buying information is www.edmunds.com. This site, from the long-time publisher of print manuals providing consumers with information about new and used car buying, provides great, free information that may save you hundreds or thousands of dollars. Here's the key information. You already know about MSRP, or manufacturer's suggested retail price. That's the "list price." Unless the vehicle you have chosen is in great demand, you should never pay MSRP or more. Consider it the dealer's opening negotiation. At many of the car buying sites, including Edmunds, you can also find out what the dealer has to pay for the car. But wait, as they say on infomercials, there's MORE! At the Edmunds' site, zero in on the lower left to where it says, "Incentives, Rebates & Leases." Although Edmunds explains it well, I'm going to summarize what these items mean. Incentives and rebates are special offers to move cars off of the lots. Rebates can be either cash back to the purchaser or low-cost financing offers. Rebates and low-cost financing go directly to the buyer of the car. Typical cash back offered right now by Buick is $1,500 if you buy a Buick Century without having the manufacturer's financing. They also offer reduced financing for terms of 24, 36 and 48 months. When they reduce your interest payments for buying the car, typically you will find that shorter terms, such as 24 months, have lower interest than longer terms like 48 months. Dealer incentives are given only to the dealer. Why should you be interested in what they are? If you know the dealer's real cost for the car, you know where they will make a profit and where they will lose money. So you'll want to look at the total picture before you start negotiating. If the dealer has sufficient incentive to sell a car, they might cut you in on part or all of the dealer incentives. The final piece of information that you will want is the holdback on the car you're looking to buy. The dealer will get the holdback if they sell the car in the first ninety days after it is ordered. The holdback is designed to help the dealership pay for the cost of keeping that car in inventory on the lot. With a few exceptions, such as Porsche which offers no dealer holdbacks, a car that is sold within 90 days makes a profit for the dealer, even if it's sold "at dealer cost." The other way that manufacturers can "move cars" is by subsidizing the lease rates. Usually, the way that leases are reduced is by calculating a selling price that is discounted from the MSRP or by assigning the car a higher value at the end of the lease than it will probably have. Edmunds also has special lease arrangements listed on its website. Cars are expensive to ship. If something is in high demand in New York but low demand in Arizona, the manufacturers and dealers may change how the product flow is but they will not reship cars from one region of the country to another. (It's different with rental car companies. They'll cut you a great deal on a one-way rental if you want to drive from Orlando to Denver just before ski season.) As a result, there may be some regional incentives to sell specific vehicles in one area. Don't forget to check these special deals out. If they are good enough, you may want to look into a one-way airline ticket to pick up your new car. ABCs for Small Business rates the Edmunds' website $$$$ -- C. N-J. Looking
for information on whether to buy or lease your new vehicle? Edmunds
has a great guide to leasing at http://www.edmunds.com/edweb/leasing.html.
Which is better for your specific case? Check out Smart Money at
http://www.smartmoney.com/ac/autos/leasing Other auto sites you may want to examine on the Web include: The Kelley Blue Book online, http://www.kbb.com/, information on prices and values for both new and used vehicles. Microsoft Car Point at http://carpoint.msn.com/home/New.asp Ready to buy but don't want the pain of negotiating? There are two ways to buy cars over the Internet. Dealer referral services will send the buyer's request to local dealers, who will then call the customer with a quote. Direct services will let you make the purchase without even talking with a dealer. URLs to try: Autobytel
http://www.autobytel.com/ -Cynthia Nemeth-Johannes |
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