Here are some quick guidelines that will help you find the right car and get a good deal:

How Much Car Can You Afford?

   This should be where you start. Decide how much you have to spend on your vehicle by determining how much you want to borrow to purchase the car and how much you can afford to pay every month. Besides the monthly loan payment, also estimate all other costs such as insurance, tax, operating expenses, etc. Once you have an idea of how much you want to borrow, you can apply for a loan. If your request is approved, you will know how much buying power you have when you go shopping.

How Are You Going To Pay?

   Now is the time to decide. Should you pay cash, finance or lease your vehicle. There is no right or wrong answer, because each method offers different advantages for different budgets and lifestyles. Most agree that securing the financing before entering the dealership will get you the best possible deal on the loan and on the vehicle. So apply now for an auto loan and make sure you get the best deal possible on the purchase of your new (or used) car.

What Car Or Truck Should You Buy?

   Based on your budget and your pre-approved financing, find out what your needs are. What features do you need? Research cars that meet your needs and fit your budget. Check out industry magazines and car publications to see what the experts think. Talk to friends, relatives or co-workers to see if they like their cars or trucks. Use the Internet for your research. Many Websites offer great tools and have a ton of useful information available at no cost. Not only will they let you read the latest car reviews, they will also give you dealer cost (invoice pricing) and allow you to price your trade-in. Find out the history of the vehicle you are looking to buy at www.carfax.com.

Items to Consider Before Visiting the Dealership

Setting Your Price

   The most critical part of the car buying process is establishing the sales price. It is here where the greatest savings can be realized. It is important to understand the difference between the MSRP (Manufacturer's Suggested Retail Price, also known as the "Sticker Price") and the Factory Invoice Price, which is the price the dealer paid for the vehicle.

   The invoice price is where you should start your negotiations, not the price on the window of the car. Negotiate from the Invoice Price up, not from MSRP down. Depending on the demand of the car you have selected and its availability, you should be able to pay no more than $100-$500 over the invoice price. If the vehicle is a hot selling model, you may wind up paying more, in some cases even more than MSRP.

   Manufacturers may offer special incentives or rebates to increase the sales of certain models. Sometimes this is passed on from the manufacturer to the consumer in the form of customer cash, cash-back or financing at extremely low interest rates. Other times it is only passed on to the dealer as dealer cash. The dealer can keep a rebate or pass the savings on to you.

What To Do With Your Trade-In?

   It's not often a dealer will pay you what your trade-in's retail worth. Retail is your car's "market" value. A dealer may offer less than retail because he'll have to invest money to recondition or fix the car and add some profit for himself. Usually, you'll get a better deal selling your old car yourself through a newspaper or online ad. There are, however, some shoppers who like the ease of a single transaction. The car dealer's used car manager will look over your car and take it for a ride in order to decide how much he will offer for your car. Dealers generally look to offer no more than $1,000 below the low wholesale value. Unless your trade-in needs to go right to the junk yard, the dealer will repair, recondition and sell the car for a profit.

   If you do not owe any money on your trade, you will realize the full offer price from the dealer as down payment on your new purchase. If what you owe is less than what the dealer offers, they may pay off your existing loan and apply the difference to you as down payment. Owing more on a trade-in vehicle than it is worth (also known as "being underwater" or "upside-down") weakens your negotiating ability, so it is even more important to establish your purchase price before discussing your trade-in.

Financing

   Dealers may be very anxious to provide you with financing from their sources, instead of having you use, for instance, your RoadLoansCheck. The reason is simple: They make money on the financing they sell. They often receive compensation when they sell your contract rather than continuing to collect the payments from you themselves.

Items to Consider At the Dealership

How to Test Drive a Car

   Make an appointment to test-drive the cars you are considering. This is a chance to evaluate the dealership and the salesperson, too. Take your time, bring a friend. See how the vehicle handles. Turn the radio down, you want to hear the engine, the tires, the suspension. Feel how it handles on a freeway or how it corners on city streets. Practice parking in smaller spaces.

Low Interest Rates

   Do not be swayed by low-interest-rate deals. These generally require shorter terms and that means higher payments. In addition, you'll most probably have the option to take either the lower rate or a cash rebate. By taking the cash rebate and using it as down payment, you will be able to lower the amount you'll need to borrow and this will result in your having a lower payment. While the lower interest rate can lower your monthly payments, the shorter term will generally mean higher payments. Unless the rate is low, such as 1.9% or 0.9% and you can afford payments on a shorter term, you'll likely be better off taking the rebate as the cash down payment.

Negotiations

   Remember, competition always gives you the best price, online and offline. Never buy under time pressure. Don't bo or act like an impulse buyer. Make sure you get everything in writing. Once your offer is made, stick to it. Be prepared to leave if necessary. Be sure to negotiate from dealer's cost upward and not from MSRP downward.

   Once you have the dealer's best sales price in writing, consider whether you should get a quote from another dealer. If you are positive that you have gotten the deal you want, then talk rebates, down payment and discuss your trade-in. If there is a factory rebate on your new car, the incentive is from the manufacturer, not the dealer. This rebate is an additional savings on your car, and should not be a part of your negotiations. The same holds true for whatever cash down payment you may have.

The F&I Office

   You will move to the Finance and Insurance (F&I) office to sign contracts. Review everything carefully. Research before you buy an extended warranty or other extras at the dealership. Independent companies can sometimes offer very competitive deals. Make sure you check the contract and disclosures before signing. Do not sign anything that you do not fully understand. Check all the numbers. Check your new vehicle for scratches and dents before taking delivery of it. Document any damage or missing accessories.