In fact, if it’s your first time buying a new car it can be really daunting to know what to offer the new car dealer.

If you offer the wrong amount, you can not get taken seriously, or even worse totally ripped off. In trying to find you the best car buying tips possible, we went out to try and find some information on other car buyers and what they’ve paid for their new rides.

In comes TrueCar.com.

This little site will tell you what others have paid for the new car that you are looking into buying.

As you can see in the screenshot below, truecar.com will let you know the average price paid for the car compared to the dealer’s cost and the MSRP price of the new vehicle (sticker price).

This information will give you the edge over the new car dealer when you start your sale negotiations.

As always, doing as much research as possible before setting foot in a car dealer is really your best option. There are a lot of different online research tools that you can use to start your new car search aside from truecar.com. You can also:

1. Get an insurance quote for the car you’re thinking of buying.
2. Ensure your credit rating is high enough to get a loan over at creditreport.com
3. Apply for a car loan online, get instant approval, and often a better rate than your bank or your car dealership.

Have any of you ever used this service? Have any other ideas? Let us know in the comments section below this post.

So here’s the list:

1. The first is obvious. These days you can start shopping online. Don’t visit a car dealership without prior information of average price of new or used car that you are considering. Go online and find the car you want to buy. This will save you lot of time as you will not have to go from one dealership to another. Moreover, you will not be swayed by emotions and pay far more than you could have.
2. If you are getting car financing, you must know your credit score. This will help you find the right lender and also let you know the APR you qualify for. Some reputable websites provide new car buying tips online as well as excel sheets for calculating monthly payments on the basis of your credit score.
3. Avoid third party loans at all costs. There is never a free lunch and if you let the salesperson arrange a car loan for you, you are going to end up paying higher monthly payments. Just as car shopping can start online you can also get a car loan approved online.
4. Get your old car evaluated before you offer it as a trade-in. There are websites where you can get to know how much your trade is worth (like Kelly Blue Book). However, remember that all assessment of old cars is only indicative of book value and not set in stone. The actual value depends upon on how well you have maintained the car. The car dealership is buying your car for reselling and you are likely to get a lower trade-in value than if you sell it yourself.
5. Almost all the car sales scams take place when it comes to settling payment. There are lots that the finance department will do to extract more money from your pocket. Apply your mind and decide whether you really need extended warranty, GAP insurance and other products that they are offering.
6. Always keep affordability and cash flows in mind and never let excitement get the better of you.
7. Get insurance quotes. Factor the insurance cost before you finalize the deal. You may not know how much your monthly payments will be until you get an insurance quote.
8. Learn car buying negotiating tips from online sources. MSRP is only a recommendation and not necessarily the price that car dealerships will agree to sell at.
9. One of the biggest mistakes that buyers commit is on add-ons. Use your negotiating skills here also to get the best deal on these as well.
10. Choose add-ons that you must have and discard the ones you can do without. Add-ons are a lot cheaper in the open market.

Anything to add to the list? Have a car buying horror story? Let us know in the comments!

Lots of people agree that car leasing is the more attractive option when you need to get a new car… but are they wrong?

There are certainly advantages to car leasing – but only if you don’t get sucked into a car dealer scam in the process… and the truth is: a lot of people get a crummy deal.

Leasing regulation does not require as much disclosure as buying a vehicle. This has opened the door for a lot of shady car dealers to work on your pocketbook and take you for all that you’ve got.

Take a good look at the common car leasing scams and make sure you protect yourself.

Ridiculously low interest rates:

Some dealers quote a lower interest rate than what you’ll actually be paying. They do this by either purposefully quoting the “money factor” as the interest rate or calculating the loan without amortizing some closing fees, like the security deposit, into the loan lease.

Take the money factor for example: this is typically expressed as a four decimal digit, something like 0.004. Some dealers quote this as a 4% interest rate when in fact you need to multiply it by 24 to get a rough idea of the interest rate on your loan.

In this example, the interest rate is a much higher at 9.6% than the “quoted” rate of 4%. Make sure you crunch the numbers and understand the formula they use to calculate their interest rate. Look out for any fees not factored into the calculation.

If you’re not satisfied, never enter into a lease agreement.

Terminate your lease early for a low penalty

This is a long standing car dealer scam when it comes to leasing. You ask your dealer how much you will pay if you want to terminate your lease and he tells you: “You can pay only a small early termination administrative fee of $250″…. he/she is misleading you.

What he is quoting is only the small administrative penalty of early termination. In fact, there is a much stiffer penalty called an early termination fee and this runs into thousands of dollars that comes on top of the other administrative early termination fee.

Do not confuse the early termination administrative penalty with the termination fee. Read the small print carefully and know just how much you will get charged should you terminate your lease before its scheduled end.

Pay for an extended warranty you don’t need

Here’s the scam: the dealer slips an extended-warranty into the deal, but it’s already part of your lease! So essentially you’re paying for two warranties, and I don’t have to tell you that that’s a rip off. Another angle is he might even try to sell you on a 36-month warranty when you’re only leasing the car for a 24-month term.

You warranty is already factored into the lease, so don’t get sold on extended warranties by a slick salesman.

This is one of the best car tips I can give you about car warranties: avoid extended warranties provided by the dealer… shop around and find the best price on your car warranty. You’d be surprised what you can find online.

“Zero dollar security deposit”

Any dealer who advertises a $0 security deposit is leaving out some of the details. A security deposit is always factored in the lease under the provision for disposition fees. I may sound like a broken record, but always ALWAYS read the fine print on any agreement that you sign.

So when it comes time to buy your next car, you’re going to look for the best deal possible… but looks sure can be deceiving.

A number of car dealers will run a scam that is based around taking advantage of people with low credit scores. We call this the “sorry but we thought you look like a sucker” scam.

Here’s how the scam works:

You’re at the dealer and you see the car that you want. It sparkles, it shines and you’re in love with it. And even more amazing, but the dealer says you can get that kick ass 0.1% APR financing rate on this beauty… that’s the best deal you’ve seen!

So you setup the paperwork, you SIGN the paperwork, you grab the keys and drive that brand new beast home with a huge grin on your face.

The first week or two go by, and you’re still loving your new ride. But the phone rings… it’s the dealer who sold you the car. He says that the financing fell through and that you need to come in for some more paperwork.

“What do you mean the financing fell through?!? You said it was a done deal… we even SIGNED the paperwork!”

“Sorry, but the deal was dependent on credit approval and you did not qualify.”

Usually, you’ll have to pay a further down payment and your finance rates will go up.

How does this scam work:

The car dealer can find out your FICO score pretty easily. In fact, nowadays your credit score can be brought up instantly… and the thing is, if it’s below a certain level, you’re never going to get approved for that amazing APR rate.

The dealer knew you wouldn’t get approved, but it’s much easier to get you in that car with the false hope that you will get the better rate, than to sell you on the same car that will cost you even more. Plus, after you’ve driven it for a week or two, you’re pretty much best friends with your new shiny wheels so you’re less likely to put up a stink.

The car dealers prey on people with low credit scores, so it’s always a good idea to go in prepared.

How to avoid this scam:

The first thing you can do is not get car financing from a dealer. You can get some pretty great deals either online, or from your credit union or bank.

Getting a pre-approval from your bank or credit union for a car loan before going to the dealer can save you a lot of grief, but knowing your credit score will also prepare you.

Sometimes, there are so many fees that it can be confusing to know which ones are really legit.

One such fee is the dealer prep fee.

The dealer prep fee is a scam… plain and simple. Here’s why:

The dealer prep fee is supposed to cover the dealer’s time for things like removing the cardboard carpet covers… the plastic on the windows… and taking the car for a test drive.

And even though the dealer will charge you something like 400-500 bucks for this service, it seems pretty expected that they would want you to pay for their service, right?

WRONG!

The thing is, most manufacturers already pay the dealer for this service by including this service in the price of the vehicle!

So where is that extra 500 bucks going? Straight to the pockets of the car dealer.

The manufacturer wants the vehicles to be delivered in the same way for each customer. That’s why they include this service in the price, so that they can get the dealers to follow their steps correctly.

Though the dealer prep fee isn’t necessarily common practice, it is out there… and you should know about it.

If you do run into a situation where a dealer wants to charge you the dealer prep fee, tell them to remove it from the invoice. If they refuse, then you can let them know that you’ll find another dealer that wants your money. After all, just think about how many other scams this dealer is trying to push on you if they are willing to try and pull the dealer prep fee off on you?

If you’ve had any experience with a dealer prep fee, let us know in the comments below.

While you’re at the dealer, don’t forget to try and get as many car insurance discounts as possible too. Check out a few of the most common discounts here.