Info for Consumers
		Privacy
		Advice@American Express
		Tips, Tools &
		Information
		Consumer FAQs

This Week's Article

Advice Archive by date

Advice Archive by topic

Second only to the investment you make in your dream house is the decision to purchase a brand-new car. Both involve a lot of money. And, the two situations have something else in common – the potential for both satisfaction and disappointment.

This is the time of year when car companies introduce their offerings for 2001. Before you heed the siren call of those shiny new models in the showroom at your local car dealer, re-acquaint yourself with the basic principles of savvy car-shopping.

The following tips are based on several government resources.

Before you start shopping
Your local library should be your first destination. Take a seat and spend an hour or so reviewing what the experts have to say about different cars, in publications like Consumer Reports, Motor Trend, and Popular Mechanics. These and other resources are also available on the Internet. On several sites, such as www.autoadvantage.com, www.carpoint.com and www.autobytel.com, you can complete the entire car-buying transaction online.

As you learn more about the new cars, be sure to write down the information you find on the dealer’s costs for specific models and options. Go to the computer and plug them into the worksheet included in the Federal Trade Commission’s new car buying guide. If you crunch the numbers ahead of time, you’ll do better when the time comes to negotiate the purchase price.

The Federal Consumer Information Center’s 2001 Consumer Action Handbook also advises you to research two additional facts and keep them in your back pocket until after you decide on the car you like best:

• Find out what your present car is worth and whether it’s better to sell it yourself or trade it in.
  
• Compare the annual percentage rate (APR) of a loan at the dealer or at other lending institutions, including banks, credit unions, and online lenders.

At the dealership
On your first visit to the dealer, make it clear you are comparison shopping, and begin by test driving several models. Carefully read the sticker on each car you are considering, writing down the key components of the price and details of the warranty.

Once you’ve settled on the vehicle you like, obtain price quotes from several dealers. Find out if the manufacturer is offering rebates that will lower the cost, then compare prices after rebates are deducted. Once you and the dealer have reached a mutually agreeable price, get a written price quote before you start to discuss your trade-in or financing.

Avoiding “speed bumps”
Do not sign anything until you have read every word carefully and made your final decision, and don’t be misled into thinking that you have an automatic three-day cancellation period. Most contracts do not allow for it. Check with your state and local consumer offices to find out if the “cooling-off” law applies where you live.

Keep copies of all receipts and correspondence pertaining to your new car. If it develops problems that aren’t resolved within a reasonable number of attempts you may have recourse if your state has a new car “lemon law.”

September 21, 2000

Copyright (c) 2000 American Express Company. All Rights Reserved. Users of this site agree to be bound by the terms of the American Express Web Site Rules and Regulations. View Web Site Rules and Regulations and trademarks and Privacy Statement of American Express. See Corporate Entities and Important Disclosures for additional information about the American Express entities who offer products and services on americanexpress.com. American Express Brokerage is offered by American Express Financial Advisors Inc., Member NASD and SIPC. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker dealer.