If you’ve ever done it, you know. Shopping for a new car can be an overwhelming process: sticker prices, manufacturer’s prices, dealer discounts, new makes, new models, and enough choices to make any shopper hesitant. Car buying has long been considered a long and arduous ordeal with car manufacturers and car salesman being portrayed as the villains. It doesn’t have to be that way, however. If you go into the situation armed with a clear head, an informed opinion, and a good notion of what you want, chances are you’ll leave the lot happy — and with the car that best suits you.

The first and most important factor in the car buying process on the part of the consumer is knowledge. If you do your homework and have a basic understanding of the intricacies of the effort, the ball is in your court.

Once you have decided upon a specific make and model, the information of most use to the consumer is the amount the dealer paid for the car. This amount, known as the factory invoice price or dealer’s cost, is the amount of money the dealer paid the manufacturer for the automobile and is a total that is often much less than the Manufacturer’s Suggested Retail Price (MSRP) — the sticker price that is found in the car’s window. An understanding of the dealer invoice cost is vital for many reasons, the most important being that your target price should fall somewhere between the MSRP — a rate at which almost all cars are sold below — and the invoice price, the price that the dealer theoretically has to recover to make a profit. And while some dealers may be hesitant to reveal their dealer’s costs, the information is available through a variety of sources, ranging from the Internet and magazines to guides such as Consumer’s Report and the traditional Kelley Blue Book. Upon obtaining the information, it is sensible to make a comparison of the prices and arrive at an estimated figure that you would be willing to pay.

While shopping for an automobile, one should also be aware of any rebates, incentives, or special offers that are being made by either the manufacturer or the dealer. Rather than walking onto the lot blindly, it makes sense to be informed on the varying rebates and deals that exist — and to use that knowledge to your benefit. For example, a factory rebate is an offer that comes directly from the manufacturer, often to help sway the consumer towards the purchase of certain sectors of the inventory; while a factory-to-dealer incentive is just that, an incentive from the factory to the dealer for each car sold, an amount that may or may not be passed onto the consumer at the point of the purchase. In addition to these two options, there may be other deals and offers that exist at the time of your purchase. Before entering negotiations, do some research on the existing options, know how they will be of benefit to you, and, due to the fact that they change continually, be aware of the duration during which they are in effect.

Another nagging necessity of the car buying effort is the perceived headache involved in the trade-in process. While it seems like a painful undertaking, it can actually go much more smoothly if you are aware of the trade-in’s cost, how much you are realistically willing to accept for it, and how the trade-in will affect the purchasing price of your new vehicle. It is worthwhile to think of the trade-in process as the sale of your used car — therefore, learn the wholesale value of the automobile and be armed with that knowledge upon entering discussion with the dealer. In fact, it might be of benefit to treat the entire trade-in process as a negotiation separate from the new car purchase — think of the concept as two separate cars garnering two separate sales. You can arrive at a wholesale estimate of your used vehicle via a number of methods, from taking the car to a used dealer to searching information similar to those used to find the dealer invoice cost, such as the Kelley Blue Book or the NADA used car manual.

While it is true that the car buying process can be stressful at times, it is important for the consumer to understand that the answers to their questions are literally an arms-length away. It may seem scary and complex, but the knowledge of a few key facts will get you through. If you know what car you want, what the dealer’s cost was, what the sticker price is, if there are any rebates or discounts in existence, what your trade-in is worth, and what you’re willing to pay there is no need for either impulse buying or intimidation on the part of the consumer.

Car shopping does not have to be a horrible experience and car salesmen are not horribly intimidating people. In fact, the entire process is just like a simple study in supply and demand, with both sides engaging in a battle of tug-of-war — ultimately, the dealership wants your business just as much as you want their car. If you make use of the resources available, decide upon a reasonable target price, and arrive at the dealership armed with your information and ready to negotiate, there is no reason your next car buying spree should not be nearly downright enjoyable.

Happy motoring!

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