the dealership, ask to see the actual factory invoice for the car you're buying. This figure is usually higher than the prices you'll see quoted on the Internet for the "standard" model. Don't decide your final offer merely on the "dealer invoice" price you see estimated on the Internet.

WARNING!
Don't settle for an invoice that the salesman or sales manager tears off the printer. That's not the real invoice price; it's a price guaranteed to make the sales staff a handsome profit. The actual invoice is a separate piece of paper that looks like an invoice and has the dealer as the customer and the factory as the distributor.

TIP!
Don't assume that asking for a price near the invoice price robs the dealer of a fair profit. Dealerships are paid extra for the space on their lot by the factory — this is called dealer holdback and if the dealer sells the car quickly (generally within the first three months), he's guaranteed to make a decent profit on it, even if he sells it at $1 over invoice). Of course, if a car is in great demand, they'll reject your offer and wait for the next customer to come along (one who they hope has less information).

If You have Trouble Getting Financing

If all else fails and you get turned down by the various loan sources I've described in this book, try a finance company. Their rates are generally higher than other sources, but they consider people whose credit ratings are too weak to get quick online approval. Don't be too embarrassed if you have less than excellent (or a too-brief) credit record. You're in the majority. Research shows that about 60 percent of the adult population falls into this not-so-excellent category. It's not that hard to lose a good credit rating either: It can happen if you get into an unresolved dispute, or let a bill go unpaid for more than two months.

If You Have Touble Getting Financing, Part II

If you think you have a good credit rating and don't understand why you're getting turned down everywhere you apply for a loan — take a look at your rating. You can access this information: It's the law. They don't have to let you see your credit rating for free, but they do have to let you see it.

You can get a free credit report when you sign up for a trial membership in the CreditCheck Monitoring Service, or pay $7.95 for a report derived from Experian (www.freecreditreport.com). Alternatively, get a $29.95 merged, triple-source report from Equifax, Trans Union, and Experian (www.icreditreport.com). Also remember that if you have cash value in a life insurance policy, you can sometimes borrow from it.

Should You Lease?

At the end of the normal three-year lease, you'll be forced to look for a new car (what's more, you'll have no trade-in either). Also, leases are generally complex documents and figuring out what they mean isn't always an easy task. You can bet, though, that if your friendly lessor can find a way to wedge in some additional profits here and there, he or she will.

WARNING!
Many people are so pleased when they find out the low initial cost and low monthly payments of the typical lease, they simply agree to it without giving the whole purchase much further thought. Don't fall into this category.

Don't Give Away Your Trade-in

All too many people (most people, in fact) quickly cave in when offered a really, really low price for their trade-in. You're told "our mechanic, unfortunately, found all these flaws with your trade-in." And you end up being either too timid or too uninformed about auto negotiating to argue. If you're trading in your existing car, your first step when negotiating at the dealership should be to agree on the trade-in price. You should also try to nail down the price before you tell the salesperson which car you're interested in.

After the salesperson knows which car you're interested in, you can't be sure of how much they're actually giving you for your car. They can make you feel really good by saying that they're giving you way more than the car is worth, but they're probably just taking a bit of the top-end profit off the car you want to buy.

Dealers usually want to talk to you in terms of trade difference between the car you want to buy and the car you have. The trade difference is the amount of money that you will have to refinance after the dealer pays off your existing loan to buy the new car. Your goal is to get them to quote you the amount they'll give you for your current car before they know which new car you want. Then you can bring down the price of the new car to as close to invoice as you can. Then the price should be: ( New car price + Options + Extras & incidentsls ) - Trade-in value

Suppose that your car lists for used retail at $12,000. It's then likely to list for around, say, $9000 wholesale, with an auction price of about $8,300. A sales-person is likely to offer you around $5,700 and, if you scream and moan, the salesperson may be willing to go up to $6,500, weeping all the way about what the sales manager is going to do when this shockingly high price becomes known. There won't be any Christmas goose for his son Tiny Tim this year. Thanks to you.

REMEMBER
You have to be realistic about the value of your trade-in, particularly if you financed it for 60 months with little or no down payment and want to trade it in after 36 months. In reality, the payoff on your loan is probably more than the value of your trade-in (a condition that car salespeople call being upside-down). If you buy a new car under these circumstances, then rest assured that you will be financing the difference between the value of your trade-in and the payoff on the loan in the price of your new car. If you're paying on a loan, then you should go into the negotiation with your eyes open. To do so, do these things:
· Visit www.kelley.com and find out the value of your trade-in.
· Call the financial institution that holds your loan for the payoff on your car.
· Expect to have to add any value shortfall to the price of your new car.

TIP!
If you like to have a new car every three or four years, then you should put as much money down as possible and finance the car for as short a term as your budget allows.

Be Prepared
If you do your homework, as described in this book, you'll enter the negotiation process with a valuable attitude. Don't wander into the car dealership with vague notions about the value of your trade-in, worries about the problems in securing a loan, no idea of the real cost of the new car, and confusion about other factors involved in buying a vehicle. Have the facts already in hand when you first visit the dealership. The Internet is the world's greatest research engine ever — and it can completely and thoroughly prepare you for buying a vehicle. You'll come out a winner if you take a little time to prepare yourself.

Be Aware of Your Wants

Before you enter the showroom, it's important to sit yourself down and make two lists: what you must have, and what you'd merely like to have, in your new vehicle. These are two different lists. All too often people come away from the dealer's lot with a CD changer and moon roof (things they wanted), but too little room for their four kids and the dog to fit comfortably for a vacation trip (things they needed). Don't be confused and get a sports car if you need a station wagon.

List the things you must have, then list the things you would like. The second list, your wish list, should be pared down until it fits your budget. It's important to make these lists, and arrive at decisions, before you get into the sales situation where you're likely to either bust your budget, or trade off things you really need for things you merely want.

Be Willing to Walk

In any negotiation, it's highly important that you have a willingness to walk out the door and go somewhere else. Your diction, body language, and other behaviors will all convey whether or not you feel you can drop the haggling process and simply walk out.

If you have the feeling that you must get that red beauty sitting out there in the lot, you've been maneuvered psychologically. You've allowed yourself to be manipulated into thinking that there's an emergency, and you feel that you've got to conclude the deal if at all possible. There are many ways to get you to feel this way. They'll tell you they can't get that color again for months, that the model you want is rare and popular, that it's now or never. Don't be pushed into this corner. Be prepared mentally to go to a different dealer (this attitude will show, and it will make all the difference). But you must be mentally strong enough to believe that you can walk, and you must also be prepared to walk if necessary.

Get It in Writing

It's important to take notes during the negotiation process. If you and the dealer agree that you won't be charged for rustproofing, write that down in your notebook (you did bring a notebook, didn't you?). Also nail down all the other "extra" charges, including such items as dealer prep, undercoating, interior protection, paint coating, sealant, "shining," or any other extra.

You don't want surprises that can balloon the cost. As you eliminate these unnecessary extras, write each agreement down in your notebook. Then, when the final contract is given to you, make sure that these items are all in writing. Take nothing for granted. Check the contract to ensure that all the verbal agreements (the ones you wrote in your notebook) are also spelled out in the contract. Double-check everything for omissions or errors.