Don’t Forget to Ask These Questions When Buying a New Car
There are many questions you’ll be asking yourself, the dealership sales associate, and probably car review websites before you decide to buy a new vehicle—but here are six questions you should ask before signing any purchase papers. These questions should be your “deal testers,” a way for you to verify the purchase terms, understand all the fees, and ultimately decide if further negotiation is needed.
"What's my out-the-door price?" or “What other fees will I be charged?”
Usually, up to the point of signing the vehicle purchase contract, you’ve only been discussing and negotiating the price of the car. However, there are always additional fees to pay—some legitimate and unavoidable, others questionable or negotiable. Fees to expect include sales tax, registry and new license costs, tire recycling fees, and a documentation fee.
“How much is your documentation fee?”
All car dealers charge a documentation ("doc") fee for filling out the contract to buy a new car. As ridiculous as it may sound, it’s a universal fee charged by all dealerships. Doc fee rates vary state by state. Some states cap the doc fee, usually at a price under $200. Other states don't regulate the fee at all, so it can be $500 or more. If you live in a state without a capped fee and feel the fee is too high, your best bet is to negotiate the price of the car down to compensate for the high doc fee, rather than try to get the dealer to waive the fee altogether.
“Are there any dealer-installed options on the vehicle?”
Dealers often add options to new vehicles after they receive them from the factory. Options added by dealers are called “add-ons” and the markup can be steep to boost dealership revenue. Add-ons can include nitrogen-filled tires, LoJack car recovery system, window tinting, wheel locks, all-weather floor mats, paint protection, and others. Dealers will sometimes install an add-on to all new cars in their inventory to make it appear as if it’s a standard feature. But, if you know it’s not a standard feature, you won’t be tricked into paying for an add-on you don’t want. Because the mark-up for the feature is set by the dealer, its price can be negotiated by a savvy buyer.
“What tax credits are available for this vehicle?”
If you’re considering buying a new fuel-efficient hybrid or electric vehicle, you may be eligible for a federal tax credit. But did you know there are other tax credits that may be available for other types of vehicles? Researching this question before you get to the dealership, as well as asking the sales associate, will give you more information when trying to calculate the final take-home price of a vehicle.
“How many miles are on the vehicle?”
This question is important for both internet and in-town shoppers. Even a brand new never-been-owned car can have more miles on the odometer than expected, which may change how much you’re willing to pay for it. Perhaps the vehicle has been taken on a lot of test drives, or it's a "dealer trade” and was driven from one dealership to another. As a general rule, if there are more than 300 miles on a car, you should negotiate a lower price if it isn’t already marked down. For any new car that has higher mileage or has been on the lot for a while, ask to see the “in-service date.” This is the date when the factory warranty begins, and it’s important to know if some of that time has already elapsed before you purchase it.
“Can you deliver the car?”
This question applies primarily to internet shoppers. Delivery of your new car is a great last perk to negotiate that saves you time and gas. Vehicle delivery also has the added benefit of allowing you to skip the sales pitches from the finance and insurance manager at the dealership for extended warranties and additional services. If you do want one of these extras, you always have the option of speaking with the appropriate manager over the phone.