By Steven McCauley
If buying your last new car (or used car) was one big costly mistake...then this article was written for you. And it positively is for you if you want to avoid making a big mistake from the outset. Interested...great, lets get started!
There are five criteria that make the best vehicle value: price, intrinsic quality (what appeals to you), insurance cost, warranty coverage and resale value. Now, you want to narrow your search to 2 or 3 vehicles you like, and then compare your short list using the value analysis criteria outlined below, and once you are done, you will have found the vehicle that is right for you.
Price
Check the blue book value price and range to determine what others are paying. Kelly Blue Book is commonly used in the Eastern U.S., while the NADA - National Automotive Dealers Association (Yellow Book) is primarily used in the Western states.
There is a third source you should definitely check called Edmonds. There is a lot of good insightful information on their website; it has this feature for new car pricing I like where you type in your zip code and it tells you the True Market Value (TMP) of the desired vehicle locally in your area, not nationally. You can visit them through this link.
Use all three sources as a reference. Remember that no two vehicles of the same, make, model and year are exactly alike; these published values are just a starting point to gage a vehicles value.
Intrinsic Quality
There is a big difference in perceived vs. actual quality between a Japanese vs. an American car, or pretty much any foreign import for that matter. Did you know that there really is not much of a difference today in the manufactured quality of a Japanese car vs. an American car, but the popular belief still holds that a Japanese car is better.
Because of this false perception, a Japanese car holds its value longer while an American car depreciates faster. The up side of this is that you can save money up front by buying an American car vs. a comparable Japanese car in the same class. This is a good thing if you purchase and hold onto the American vehicle for several years. This is not such a good thing if you lease an American vehicle since it rapidly depreciates over the first few years of ownership and negatively impacts your calculated monthly lease payments.
Also, what are the reliability and safety factors of the vehicle you want to purchase as compared to other vehicles in its class? Read up on the vehicle test drive reviews to find out which vehicle has the safety features you like.
Insurance Cost
What is it going to cost to insure that baby? Talk to your insurance agent, heck, shop around and talk to several to get quotes on what you will pay to insure the vehicles on your short list. This cost alone could be the tie breaker.
Warranty Coverage
What is the manufacturers warranty coverage for each of the vehicles you like? You may be surprised at the answer, so factor that into the equation as well.
Resale Value
Remember what I said earlier about holding value? Well, it matters if you are the type of person who likes to get a new vehicle every few years, but if you hold onto it until its ready for the crusher, then this does not have much weight or bearing in your decision.
If a domestic vehicle stacks up against an import and you plan on holding on to it forever (well almost), then with everything being equal, your best value as far as price definitely will be American-made.
The reverse is true if you are only going to hold onto the vehicle a couple of years.
OK, so you have done your side-by-side comparison, and a clear winner should have emerged. Go ahead, make your vehicle selection. Ahhh...feels good! Now you are ready to find a dealership and get out there and haggle with a car salesman on price, financing and your existing vehicle's trade-in value, if you have a vehicle to trade in. Good luck!
Steve McCauley, a self-proclaimed car nut, who has over 20 years of professional customer service experience, started SJM Automotive Services, LLC; It was in response to a niche he saw unfilled for a personalized car buying service that catered to each individual's specific automotive needs. Find out more about Steve's company here at http://www.sjmautomotiveservices.com Steve is also the proprietor of a complementary, content-rich web site called http://www.carbuyingtips-sage.com, where you can find a wealth of free tips, techniques and resources (similar to this article) that are indispensable to anyone looking to buy a vehicle. The site covers negotiation tips, financing options and everything else you will need related to the car buying process.
SJM Automotive Services is part of the Automotive Consulting Network, a company with over 200 Affiliates in the U.S. and Canada, and over 15 years of proven success.
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