Book Opener

Buying a New VehicleIf you prepare before starting to shop for a vehicle, you can makethe process easier and save money. Use the library or online resourcesto research and learn about the cars that you may be interested in buying.Some magazines devote entire issues to rating cars based on their maintenancerecords, safety, performance, and affordability.Your research will make you better able to negotiate the price. Dealersare often willing to bargain on their profit margin between 10 and 20percent, which is generally the difference between the manufacturer’ssuggested retail price (MSRP) and the invoice price. See Figure 16.1 formore information about buying a new vehicle.Trade-InIf you are trading in a vehicle, do not discuss it with the dealer untilyou’ve negotiated the best price for your new car. You should know thevalue of your trade-in, which can be found on the Internet or at thelibrary. Some Internet sites will calculate a reasonable price for yourtrade-in car based on its mileage, condition, options, and the location inwhich you live. You might get a better price selling a vehicle yourself,rather than trading it in. However, many people opt to trade-in carsbecause of the convenience it affords them.Figure 16.1Invoice PriceBase PriceMonroney StickerPrice (MSRP)Dealer Sticker PriceCar Buying TermsThe manufacturer’s initial charge (including delivery) tothe dealer. This is usually higher than the dealer’s final costbecause dealers receive rebates, allowances, discounts, andincentive awards.The cost of the vehicle with standard equipment andwarranty but without optional equipment. This price isprinted on the Monroney sticker.The information printed on the Monroney sticker. It showsthe base price, the manufacturer’s transportation charge,and the fuel economy of the vehicle. The sticker is requiredby federal law to be affixed to a new vehicle’s window.Only the purchaser may remove it.The Monroney sticker price plus the suggested retail priceof the dealer-installed options, such as additional dealermarkup (ADM) or additional dealer profit (ADP), dealerpreparation, and undercoating. This price is usually on asupplemental sticker.PRICING A VEHICLEThe same vehicle can havedifferent prices. What is theMonroney sticker?Chapter 16: Owning a Vehicle 341