Where to buy from and how much to pay ?

After you have identified which model cars to purchase, it is a good time to find out how much it would cost. Do not believe the number and figure you see on TV , Print ads , they can be significantly different depending on options and other factors.

Please note that you can buy a new car from official dealers only. Whereas used cars can be purchased from many sources that include :-

1.) Private Sellers like you and me.

2.) Public Car Auctions

3.) From Dealers (Authorized)

4.) From Used Car Dealers (or car lots) - Example - Carmax ,or the local Used car dealer down the road.

Depending on where you purchase the car from, the prices can be significantly different.  A Book value pricing tool is a good starting point. Tools such as the Kelly Blue Book (KBB) takes input from you and can generate the book price on the car , depending on the condition and the purchase type (private,dealer etc).  One thing to be sure is to enter correctly the mileage, options and extras in the car you are planning to purchase. The book value can only be used as a guidance and not as the 'GOLD Standard'. Due to various factors prices can be off the book value.Like supply,demand, desperate sellers, the car being extra clean and maintained above average. I have seen price swing of 15-25% around the book value. Some examples of the factors I have seen include :-

1.) A seller who really needed the cash.

2.) A buyer who did good negotiation.

3.) A seller who was leaving country in a few day.

4.) Condition was far better than described, whereby price was above the book

5.) Condition was below than what was described.

6.) A hard to find sports car , price was above the book.

In my experience, Used car under the category of 2 , you will most likely find a good deal at the authorized dealer or used car dealers. I will explain the reason later. Where as in category in 4,5,6 , you will find a good deal with private sellers only. Category 3 is the overlap area,where both dealer and private party can offer good deals. The good news is that most have their car inventory online and you can shop and compare pricing with out even getting up from your chair. Here are the specific sources :-

1.) AutoTrader has listings from dealers and private sellers. Auto trader by default sets it criteria to 'dealers' only so you will have to manually set it to "Private Sellers" to find out how much is the initial asking price by a private seller.

2.) Dealer's Official website itself - Just type brand and dealer in your favorite search engine and the official dealer will pop.  Usually they have new, used and certified inventory.

3.) Craigslist - In addition to private sellers , a lot of dealers also post on CL, it is also a good place to to shop.

4.) Online auction sites and other local classifieds.

Once you spend some time at these website , you will have a general idea of the price to pay for your Year,Make,Model and Mileage of car. Price will differ a bit based on extras like a sunroof,navigation package,sport package or comfort options.

The exception to this is the Cars with Salvage Titles (see article), which will priced 30 to 40% below the average prices.