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Buy or Lease a Car?
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Shopping & Negotiating

Take your time. Don't be rushed or get caught up in "new car fever." You'll have to work to get a good deal, so be prepared to spend the necessary time and energy.

If you're buying a new car, find out the invoice price before going to the dealership. The invoice price is the manufacturer's charge to the dealer. It should be the starting point from which you begin your negotiations. You can find out what the invoice price is on a particular model by checking automobile publications or websites such as or

Don't give in to pressure tactics.

Signing a buyer's order or placing a deposit should NOT be done during negotiations, but only AFTER you have comparison-shopped and made your purchase decision. A dealer who really wants to sell you the vehicle should be willing to hold the offer open for a day or two while you compare and decide.

Try it out and check it out.

You should not only take the vehicle for a test drive, but also do a thorough walk-around inspection and ask plenty of questions about anything unusual (such as more than 50 miles on a new vehicle, or claims that the car was a demonstrator or executive car). Since dealers are not required to disclose prior damage, even on new vehicles, unless the damage exceeds a certain dollar threshold, be sure to inquire specifically about any prior damage.

Separate the deal into key parts.

Keep the main components distinct so that you can consider and maintain your options. Negotiate (1) the purchase price, (2) the trade-in value of your old vehicle, and (3) the financing or monthly payments, separately and in that order. In this way you can choose whether to trade your old vehicle or sell it yourself, and whether or not to finance through the dealer. When these items are not discussed separately, confusion can result, as changing one item may also change others. For instance, the monthly payment amount may go down, but the contract is changed from a purchase to a lease; the trade-in amount may be increased, but the purchase price also goes up; or the monthly payment goes down, but the interest rate and length of loan are extended.

Web Sites with Pricing and Negotiating Tips


Next Step: Closing the Deal