Buying a New Car

Research the price

First decide what car model and options you want. Then visit your library or bookstore and check materials that provide information on the dealer's costs (invoice price) for specific models with the options you desire.

 

Shop around

Armed with this knowledge, you will be in a stronger position to shop around or to consult car-buying or broker services to obtain the best available deal. Going to only one dealer and relying solely upon the salesman's oral promises, without researching the price or comparison price-shopping with other competitors, is the best way to get "ripped-off." If the dealer does not have the vehicle with the options you desire on its lot, consider ordering your new car, to avoid paying extra for unwanted options.

 

Negotiate

The STICKER PRICE or "MSRP" is the manufacturer's suggested retail price. Most dealers are willing to bargain on their profit margin, which is generally between 10 to 20 percent of MSRP. Don't get talked into a lease unless you have researched car leasing and have made an informed decision to lease.

 

Trade-ins

Your library will have reference material which can help you determine the value of your trade-in vehicle. You will usually fare better by selling your car privately. Consider advertising in a local newspaper or flyer. If not, obtain your best possible purchase price from the dealer before discussing the possibility of a trade.

 

Financing

Check the "APR" (annual percentage rate) at your bank, credit union or even your insurance company or motor club, and compare them to the rate quoted by the dealer. Advertised low interest rates by the dealer may require you to pay the vehicle's sticker price.

 

Extended Service Contracts

The dealer is likely to try to sell you a service contract to provide for repair of certain specified parts or problems. These service contracts usually overlap the initial warranty coverage included by the vehicle manufacturer in the price of the car. Read the contract carefully to determine what repairs are covered, the extent of the coverage (parts, labor, deductibles, exclusions), and the other terms and conditions.

 

The Texas Lemon Law

The Lemon Law applies to new vehicles, including cars, trucks, vans, motorcycles, all-terrain vehicles motor homes and towable recreational vehicles (TRVs) that develop problems covered by a written factory warranty. Demonstrator vehicles are also considered new vehicles.

The law does not cover used motor vehicles (including program vehicles), repossessed vehicles, non-travel trailers, boats or farm equipment. Neither does it cover vehicles with:

• problems caused by the owner's abuse, neglect or unauthorized changes to the vehicle,
• parts or components not authorized or installed by the manufacturer, distributor or converter or
• problems that do not substantially affect the use or market value of the vehicle. Minor rattles or stereo problems are usually not considered serious under the Lemon Law.

How do I know if my vehicle is a lemon?

A motor vehicle may be declared a lemon if it meets all of the following conditions:

• The vehicle has a serious defect or abnormal condition.
• The defect or condition is covered by a manufacturer's written warranty.
• The owner reports the defect or condition to the dealer or manufacturer within the warranty term.
• The owner gives the dealer or manufacturer a reasonable number of attempts to repair the defect or condition.
• The owner gives the manufacturer (preferably by certified mail) written notice of the defect and at least one opportunity for repair.
• The defect or condition persists and substantially impairs the vehicle's use or market value, or creates a serious safety hazard.
• The owner files a timely Lemon Law complaint and pays the filing fee.
  
  

The Texas Department of Transportation administers the Lemon Law.