A new car falls right behind a new home as the most expensive purchase many consumers make. That is why it's so important to know how to make a smart deal. The site MyCreditUnion.gov offers the following car-buying advice, along with some terms you’ll want to know before you begin shopping.
Think about what car model and important options you want and how much you're willing and able to spend. Do the appropriate research. You will be less likely to feel pressured into making a hasty or expensive decision at the showroom and more likely to get a better deal.
Purchase negotiations for vehicles often have a vocabulary of their own. Here are some terms you may come across when you are talking price.
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Invoice Price is the manufacturer's initial charge to the dealer. This usually is higher than the dealer's final cost because dealers receive rebates, allowances, discounts, and incentive awards. Generally, the invoice price should include freight (also known as destination and delivery). If you're buying a car based on the invoice price (for example, "at invoice," "$100 below invoice," "two percent above invoice") and if freight is already included, double check to make sure freight isn't added again to the sales contract.
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Base Price is the cost of the car without options but includes standard equipment and factory warranty. Play close attention to the Moroney sticker, as the base price will be printed there.
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Moroney Sticker Price shows the base price, the manufacturer's installed options with the manufacturer's suggested retail price, the manufacturer's transportation charge and the fuel economy (mileage). Affixed to the car window, this label is required by federal law, and may be removed only by the purchaser.
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Dealer Sticker Price, usually on a supplemental sticker, is the Moroney sticker price plus the suggested retail price of dealer-installed options, such as additional dealer markup (ADM) or additional dealer profit (ADP), dealer preparation and undercoating.
