It's a buyer's market out there, and cars are no exception. If this fall's Cash for Clunkers program weren't enough, dealers are eagerly throwing in their own incentives and extras, negotiating like mad (especially at the end of the month) and even dropping the prices of hybrids. Fleet managers are making deals, and auto insurance agents have joined the discount bandwagon.
Ready for a new set of wheels? Here's how to shop smart.
1. Look for Incentives and Sales
Incentives are usually promoted at the end of the year, but in today's economic climate, dealers are eager to sell at any time, especially toward month's end, when quotas need to be met. Check out newspaper ads on Friday and Saturday, when dealers promote heavily. The "dealer holdback," which often adds 2 percent to 3 percent to the manufactuer's suggested retail price as a profit margin, is another discount that buyers can try for but, according to edmunds.com, dealers are loath to trade this perk.
Some fleet manufacturers, such as Ford, throw in extras like built-in storage shelves or steel cabinets for cargo vans. It recently offered $6,000 cash back with its Employee Pricing Plus program, and Cadillac took $12,000 off the 2008 Escalade with cash-back and red tag offers. Red tag sales generally end Dec. 31, but this year, who knows?
2. Lower insurance costs
Some insurers offer discounts to longtime customers and to those who add other policies to cover offices and business equipment. Additional discounts and special rates can be found at websites like aaa.com. Check on group rates, too (and see if your professional organization offers group insurance). Insurers' rates are based on the value of the vehicle, safety and anti-theft features, the driver's safe-driving record, type of vehicle, use of vehicle and mileage figures. Check out the most frequently stolen cars at State Farm Insurance. And pay attention to provider reputations. J.D. Power and Associates awards Amica, the oldest mutual auto insurer in the U.S., highest honors for best pricing, followed by Automobile Club of Southern California and Erie.
3. Shop the Websites
Auto-buying websites are not only timesavers but also cost-savers. Simply type in the brand name, such as dodge.com or acura.com, and you're whisked to a virtual showroom. Most post interest rates and cash-back offers. But savvy small-business owners know they need to continue their research on sites that offer reviews, ratings, advice, tips and guides. Here are some of the most popular:
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