What Should I Pay For My Car?
What are other people paying for the car I want?
Price is important whether you lease or buy
You probably already know that new-car dealers sell vehicles at different prices to different customers. That is, two or more different customers can pay significantly different prices for the same car on the same day — whether they are leasing or buying.
Why is that, you might ask?
Car dealers try to make as much profit as they can on each car they sell or lease — like any business. But some customers are more knowledgeable about how car prices work (see Car Price Secrets) and are better negotiators than others. Those customers get better prices than less knowledgeable and less skilled customers.
Dealer Invoice Price
Knowing dealer invoice price is one of the important elements of getting a good car deal. Dealer invoice price is the wholesale price dealers pay to the car manufacturer.
Every dealer in the U.S. pays the same invoice price for the same car. If you know invoice price, you know just how low a dealer can go and still make a profit, which any business must do to survive.
Actually, dealers can receive sales bonuses, holdbacks, and factory-to-dealer cash that give him additional profit margin. Combined with customer rebates and bonuses, customers can often buy or lease cars for a price that is below dealer invoice price.
So how do I know how much I should pay for my car, given all these different factors?
Know What Others Are Paying
It would be nice to know what other people in your area are paying for the same car that you want.
That way, you'll have a target price to use in negotiations with your dealer. You should expect to get the same or better price that others are getting.
So how can we find out what others are paying?
A new company has come to the rescue and promises to change the way we buy new cars now and in the future. It's different than any other company in the business.
The New and Better Way
The company, TrueCar, not only gives you pricing information such as MSRP (sticker prices) and dealer invoice prices, but also tells you what you should pay for your car, based on what other people are paying for the same car in your area, based on your zip code.
They show you a simple chart (see example chart at right) that shows you exactly how the average local sale price compares to factory invoice price and dealer's cost — then show you the lowest price you should expect to pay from dealers in your area.
This is incredible because it's a new kind of information that automotive consumers have never had before. It's a powerful car shopping tool that enables average car buyers to get better deals than has been possible in the past..
Guaranteed Low Price
TrueCar then goes one step further and tells you which car dealers in your area are offering the lowest price for the car you want. Typically, those prices are below dealer invoice price — and lower than the average price other people are paying in your area.
To make it even better, they take those lowest prices and provide you with up to three written price guarantees from your local dealers.
They call it a "Price Protection Certificate." You simply print the certificate on your printer and take it to one of the participating dealers in your area to purchase or lease your car. It's great because it takes the usual hassle and stress out of the car buying or leasing experience.
The prices should include any current rebates, bonuses, and other incentives that apply.
This incredible new service is free and you're not obligated in any way to accept the deals that you are offered.
Summary
There are a number of excellent sources of car pricing information on the Internet but none goes as far as TrueCar in showing you what other people are paying. They then beat that price with a guaranteed written price that dealers in your area have agreed to honor. It doesn't get much better that that.
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