Buying a car at a dealership

Key facts · Part 1 Essentials

• MSRP: the manufacturer's suggested price, a suggestion and not a rule
• Invoice price: roughly the dealer's bill from the manufacturer, a negotiating anchor and not their true cost
• Out-the-door price: the total you actually pay, and the number to negotiate and get in writing
• Financing and APR: the yearly cost of the loan; get pre-approved and ask the dealer to beat it; longer terms mean more interest
• Trade-in: the dealer pays wholesale, so get outside offers and settle the new price first
• Leasing: you pay for depreciation; the capitalized cost is negotiable
• Add-ons and fees: add-ons are optional; real fees are tax, title, registration and destination; dealer prep, advertising and market adjustment are padded

Key facts · Part 2 Deeper

• Four-square: a worksheet that shuffles price, trade-in, down payment and monthly payment; take one box at a time, starting with out-the-door
• Either-or rebate: cash back or a special A.P.R., often not both; compare the cost over the whole loan
• Negative equity: owing more than the car is worth; rolling it into a new loan means paying interest on the old debt
• Residual value: the lessor's projected worth of the car at lease end; it is not negotiable, so push on the cap cost
• Certified pre-owned: a used car with a manufacturer inspection and extended warranty; it costs more, so ask what the warranty covers
• We Owe form: the written list of anything the dealer promised; if it isn't written down, it isn't promised

Key facts · Part 3 Drill

• Negotiate the out-the-door price, in writing, not the monthly payment
• Get pre-approved and ask the dealer to beat your rate
• Get outside offers for your trade-in, and settle the new price first
• Add-ons are optional, so ask
• Leaving is your strongest tool