Buying A Car | Car Buyer Central

Buying a car is one of life's major purchases, right after the purchase of a new home. Unlike purchasing a new home, however, the experience of purchasing a car often leaves us feeling pressured and uneasy and out of our element. However, if you arm yourself with some basic information, the process need not be intimidating.

Learning Your Car Buying Terms

Before you do anything else, you might want to become familiar with some of the terms you're going to encounter. Here are some of the more confusing terms because they're all related to the pricing of a vehicle:

Invoice Price:

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).

Base Price:

The cost of the car without options, but includes standard equipment and factory warranty. This price is printed on the Monroney sticker.

Monroney Sticker Price (MSRP):

More commonly known as the window sticker price, shows the manufacturer's suggested retail price, engine and transmission specifications, standard equipment and warranty details, optional equipment and pricing, and city and highway fuel economy ratings as determined by the Environmental Protection Agency (EPA). Affixed to the car window, this label is required by federal law, and may only be removed by the purchaser.

Dealer Sticker Price:

Usually a supplemental sticker, is the Monroney 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.

Before You Visit A Dealership

Lovely little yellow sports car

Before you ever get to the point of visiting a dealership, you want to do your homework. First, decide on the car model and options you need (please note the word "need" ... first comes need, then if everything works out financially you can explore your wants). Some considerations: the intended use of the vehicle, anticipated annual miles, cargo capacity, two or four-wheel drive, automatic or manual transmission, air conditioning, engine size, audio system, power seats, leather seats, power locks, sunroof, any special packages. You might also want to look into safety features, fuel economy, warranties, operating costs, reliability, and theft rates.

You can make this process quicker on, where you can pick a specific car and bring up a list of similar cars in the same class. If you already have a car you're considering, this will be your starting point. Find the specific car you want on the web site by searching by Make, Type, Price Range or Market Segment. Once you have chosen your specific car, you will be on a Vehicle Detail page. This page has links to all the Car Pricing, Features, Reviews and Shopping options.

Do some additional quick car quote research online at these sites: CarsDirect and

Of course, your choices will be influenced by the amount you're willing to spend, so you'll need to determine this number as well. Are you going to seek financing? You'll want to do your homework in this area, too. One of the biggest mistakes you can make is not knowing if your credit report will support a loan, and if it will, not checking online auto loan rates. Both are quick and easy to solve. You can learn more about car loans and financing here: Car Buyer Central - Car Loans

Contact your insurance agent. Let him know which car model you're considering purchasing, discuss the coverage you have in mind for the vehicle, and get an insurance quote from him.

Time To Get Serious

Its a police car

The next step in buying a car is to find a local dealer you're comfortable with, build a relationship and arrange a test drive. You can begin this relationship either by phone or over the Internet. What you're trying to determine is if this is a salesman/dealership that makes you feel comfortable, doesn't pressure you, and understands what you're looking for.

Inquire if they have the model, color, and options you're looking for already on the lot. If they don't, find out if they can order the car, or if they're willing to discount a lot car that may be a different color or missing an option that you inquired about.

Once you find a potential dealership, arrange a test drive with the understanding that you don't intend to buy the car that day. Let them know upfront that if you decide after the test drive that the model is what you're looking for and if the dealer can offer the car at what you know to be a reasonable price, then you'll do business with them.

The test drive is your opportunity to see how the car handles under conditions similar to what you'll be driving everyday. If you do a good deal of long distance driving, take it out on the freeway. If you mostly do stop and go driving in traffic, then take it down a busy boulevard. You want to see how it handles at various speeds, how well it brakes, and how well it does around corners.

If you like what you experience, thank the salesman, go home for the night, and give the purchase plenty of thought before returning.


While many dealerships are fairly straightforward these days when it comes to price (meaning there's not the same, intense negotiations that used to take place ten years ago, but an upfront price point that's easy for everyone to agree on), not all dealerships operate this way.

If you're going to go into negotiations, you can generally expect the salesperson to create a worksheet of the particulars of the car with their first price penciled in. Both parties expect a certain amount of negotiation at this point. After making your initial offer, the salesperson may counter or he may leave to discuss your offer with the sales manager.

These offers and counters can take some time. Relax, and don't feel pressured into accepting a deal you aren't uncomfortable with. Should the salesperson become heavy handed or the negotiations reach an impasse, you can always leave and go to another dealer. They know this is an option, so it's likely that somewhere along the line, the logjam will be broken.

Once you strike the deal, review the paperwork and the official contract. If you're financing through the dealership (this is where your pervious research pays off), be sure to understand all the conditions. Carefully read through all forms, paying particular attention to any blank spaces or figures that seem to be inflated. Question the salesperson or finance manager on each and every item you don't understand. Only when you're absolutely, positively certain you understand all aspects of the contract should you sign the papers.

At some point the time will come when you need to pull out your checkbook. Write the check for the agreed upon down payment and make notes on the check itself, including the VIN number of the purchased vehicle.

Prefer To Have Dealers Bid For Your Business?

Consumers' Checkbook/The Center For The Study of Services is an independent, nonprofit consumer organization founded in 1974 with the help of funding from the U.S. Office of Consumer Affairs. Their purpose is to provide consumers with information to help them get high quality services and products at the best possible prices. Under their CarBargains service, they provide consumers with the help to get great deals from new car dealers by making the dealers bid competitively for your business. The complete service costs $190.

How CarBargains Works:

  • You tell them the make, model, and style of the car you wish to buy.
  • They get at least 5 dealers in your area to bid against one another on the car you request. Each dealer commits to a dollar amount above (or below) "factory invoice cost."
  • They send you: dealer quote sheets, which show each dealership's bid and the name of the dealership contact, factory invoice cost information for your type of car, showing what all dealers pay for the base car and options, other useful information, on the value of your used car (based on a description you have given them), low-cost financing options, pros and cons of extended service contracts, how you may be able to get a service contract as good as your dealer offers at a substantially lower cost, etc.
  • You contact the dealership ... identify yourself as a CarBargains client; select the specific car you want, use the information CarBargains, sent you to determine the confirmed bid price of the car you've selected, purchase the vehicle at the confirmed bid price.

This is a great service for those who hate the buying a car experience or who are at all nervous about it.