WASHINGTON – Here's the first thing I would have splurged on, had I won the Powerball Jackpot: Someone to buy my next car for me.
It's not the spending that's so painful; it's the buying process. Auto shopping is stressful, made more so because we're led to believe we're somehow deficient if we don't wrangle the best deal out of a salesman who knows every trick in the book, and has way more information than we do.
There are all the variables involved:
— The price of the car itself.
— Increased costs for the spoiler and CD player you didn't ask for but somehow will end up buying.
— The amount of money the dealer will give you for your trade in.
— And, the cost of the loan you're probably going to use to pay for it all.
But that whole scene is getting better.
No, I haven't won the lottery, and won't unless someone lays a winner on me.
I don't buy tickets. But I do buy cars, at least occasionally, and here's the good news: There are more places out there willing to loan you money and willing to buy your old car and willing to explain what that new car really should cost.
Here's how to proceed, if you need new wheels and put car shopping only barely above dentistry in your list of stuff you'd rather not do.
1. Choose your car. There are the usual consumer sources of information, personal experience, friends' recommendations and the like, so I won't waste time here.
If you can't decide between a few different models, call your insurance company and find out if their rates are similar for the models you are considering; you could save by buying a cheaper car. And look at your driving patterns and figure out how much the lowest-mileage car you're considering would save you in a year of driving.
2. Research what that car really costs. A good place to start is at http://www.Edmunds.com, which offers what it calls "True Market Value." That's a measure of what people are actually paying for the car you want in your part of the country. That shouldn't be considered the bottom.
Some folks are overpaying. And dealers get other breaks and rebates from the auto manufacturers, so the invoice price you often see quoted isn't really the bottom-line dealer cost.
So, if it looks like the Edmunds calculated value is quite close to the invoice price, it doesn't mean the dealers in your region are giving cars away. It means there's more wiggle room.
3. Get the true value of your trade-in. Go back to Edmunds and price it. Then, if there's a CarMax near you, go there and see how much that company will pay for your car. CarMax, billed as the nation's largest retailer of used vehicles (http://www.carmax.com), will give you a written offer on your car that is good for 7 days. That's the minimum you'll take from the dealer, after you've settled on a purchase price for the car you're buying.
4. Check your credit, and clean it up if necessary. That's a step most auto shoppers don't take, according to a survey by Aware, an association of auto lenders. The group's Web site, http://www.autofinancing101.org, offers useful information about how to finance your car. You can get one free credit report a year at http://www.annualcreditreport.com. If you see any mistakes, get them fixed. If your cards are charged to the max, ratchet back your balances, and make sure you make timely payments. Then go shopping for a loan.
5. Get a loan quote. Call your credit union, bank or other finance company before heading for the showroom. Capital One (http://www.capitaloneautofinance.com), which has been aggressive in the auto-finance market, offers a similar deal to the one CarMax does. It will give you a loan quote, good for 45 days, that you can take to the showroom with you. That's the highest rate you should end up paying.
6. Do the math. OK, here's the homework. Using the Edmunds fair value price, the CarMax trade-in offer and the loan quote you have in your pocket, figure out the total cost of the car, including all the interest payments you'll make until it is paid off and you own it. That's the number you should keep in mind while you're shopping.
7. Consider not going to the showroom. If you are certain of the car and the model you want, call several dealers in your area and tell them what you want and how much you'll pay. Tell them you're ready to buy if they can meet your price. It's likely you'll get calls back with offers that at least approach your price.
8. Buy your car and then forget about it. Perhaps you didn't get the most rock-bottom price anybody ever got for the car you're driving. But you probably didn't overpay by much more than you might blow on lattes in a year, an extra clothes-buying spree, or a weekend getaway.
You know you did your homework and gave it your best shot, so, once you've cut your deal, walk — make that drive — away and be happy.