New or used?
You’ve probably heard that a new car loses thousands in value the moment you drive it off the lot. Since that saying is actually true, let some other guy drive the car off the lot. Then you buy it at a reduced price. “A good two- or three-year-old used car is the best automotive buy out there," Quincy says.
This is especially the case right now. During the financial crisis, new-car sales and leases plummeted, therefore, used-car inventories dropped off two years later. With less supply, prices went up. As the economy recovered, though, new-car buying and leasing picked up, and now those late-model used cars are coming to market. The National Automobile Dealers Association says 2014 will mark the first year prices have fallen since the recession, and Calland has seen evidence of the trend at auction.
To avoid getting stuck with a lemon, the first line of defense is to stick to cars still under factory warranty. Calland suggests looking for a highly rated dealer who’s been in business for a long time. “Some guys are fly-by-night, they just want to make their money and close after two years,” he says. Ask outright: What happens if the water pump fails after a month? It’s no guarantee, but get a handshake agreement that the dealer will stand behind the car.
Do your research.
For a new car, find out exactly what the dealer’s price (or “invoice”) is on the vehicle you want, right down to the optional alloy wheels. Quincy says he configures the options and then asks a few dealers for the best price they can give him. With a site such as Consumer Reports you can tell exactly what the dealer paid, including “dealer holdbacks,” the secret money the factory will pay to the dealer if they sell a certain amount of cars. “Just say, will you take 3% over invoice?” he recommends, a slim, but fair, profit for the dealer.
Research is especially important, of course, when it comes to used cars and reliability. Here’s an insider’s tip from Calland: A few manufacturers have been using a mileage-boosting technology called a “continuously variable transmission [CVT].” In theory such a feature sounds great, but in reality some older systems can be faulty and may lead to trouble down the road. So stay away from used cars with CVT.