Knowledge Is Power When Buying a Car

Some car and truck buyers love the give-and-take of negotiating. They actually enjoy the art of the auto deal. Most consumers, however, dread the haggling and the hassles--the “let me talk to my manager” song and dance that many auto salespeople perform all too well.

So as the 1999 models start arriving at dealerships and you prepare to go out there and do battle, here are 10 shopping tips to help make your purchase as informed, cost-efficient and pain-free as possible.

*

Develop an ‘I Can Afford It’ Formula: Before going to a dealership, determine the maximum monthly payment you can afford by getting pre-qualified at a bank or credit union. This will also help you decide where to get financing (which bank, thrift, credit union or dealer offers the best terms?) and whether to consider leasing as an alternative. An old but good rule of thumb is that your annual income should be at least two times the price of the vehicle you want to buy.

*

Know the Basics Before You Set Out: Before beginning negotiations, study the dealer costs, suggested retail prices, cash rebates and discount financing plans available for the models you are looking at. And know what options you want and what they cost. Several companies offer this information in print form or on the Internet.

*

Do Your ‘Value’ Homework: A vehicle’s value has less to do with its initial price than with the continuing costs of owning and operating it. A model that seems a good value because of its purchase price might ultimately be more expensive to own than another with a higher sticker price because of excessive depreciation, maintenance and repairs, even high insurance. So be sure to do extensive pre-purchase research to decide which vehicle is right for you.

*

Contact Dealers in Advance: Call a variety of dealers or check their Internet sites to find out whether they have the vehicle you want in stock. The best deals can usually be made when the dealer doesn’t have to order the vehicle from the factory or trade with another dealer to get it for you.

*

Don’t Succumb to Pressure: Always remain confident of your research and be willing to leave the dealership without making a purchase. There are other dealers out there. So don’t be pressured by sales people who demand to know “are you ready to buy today?” Conversely, do be ready to leave a deposit to seal the deal once you have arrived at a fair price.

*

Discuss Each Sales Transaction Separately: Salespeople often want to combine buying, financing and trade-ins into one transaction and one price. Don’t fall for this ploy. The golden rule: Discuss each part of the deal as an independent transaction. Don’t start talking about financing until you have arrived at a satisfactory price for the vehicle you want to buy. Then negotiate the financing terms. Then the trade-in.

Even when you’ve researched all the information and have all your facts at hand, it is easy to get confused when negotiating all the numbers from three transactions at one time. Experienced auto sales professionals can tilt the complex transaction to the dealer’s advantage--after all, massaging the intricacies of car and truck deals is what they do for a living.

*

Buy at Month’s End: The end of the month can be the best time to buy a new vehicle. Salespeople are often trying to meet or exceed their monthly sales goals and are willing to sacrifice a portion of their commissions to do so.

*

Buy Last Year’s Model (Maybe): By October, manufacturers are intent on clearing out current inventories to make room for the new models. So the best new-vehicle bargains invariably occur in the late fall and early winter--as long as the deal involves the old model year.

This month is not the time to get a great deal on a brand-new 1999 model, but dealers and manufacturers want to get rid of all their 1998s and will often grant price concessions to do so. However, if you plan to keep your new vehicle for no more than three years, a discounted price might quickly be offset by depreciation--the bulk of which occurs in the first two years of ownership.

*

Let the Dealer Make a Buck: Some consumers try to browbeat the dealer out of every nickel of profit. But salespeople have to make a living too and are more likely to work with you if you acknowledge that.

*

Use the Internet if You Have Access: There is no better way to research car and truck information than on the Internet. And some of the buying service sites can get a vehicle for you with minimum hassle and at a price close to what you could negotiate for yourself.

All that said, the highly competitive nature of the automotive marketplace in recent years has prompted many dealers and manufacturers to develop selling systems that no longer put the consumer through the typical haggling horrors. In the future, the shopping experience may be as painless as buying a refrigerator.

In general, though, it is still a negotiating marketplace today, so buying a new car or truck is not a simple by-the-MSRP-numbers process.

So do your homework, refine your choices, and go out there armed with what you need to do some well-informed negotiating.

Peter Levy is founder and chief executive of Campbell, Calif.-based IntelliChoice Inc., which has been measuring the costs of owing and operating cars and trucks, and issuing best overall value of the year awards, since 1987.

* REPORT CARDS: For IntelliChoice reports on the car of your choice, go to The Times’ Web site at https://www .latimes.com/autosource.