John Nielsen: Hi! I am John Nielsen with AAA. And we are talking about buying a car, and in this segment we are going to talk about negotiating your purchase. There really are a few things that you should know and they start with terminology. You are going to hear terms like MSRP, which stands for the Manufacture Suggested Retail Price. That's what the manufacture puts on the window sticker, it says, the vehicle cost. You will hear terms like invoice which is almost what the dealer pays for it. Couple of other terms that are real common here would be incentives. So is the manufacture providing incentives to lower the price of the vehicle to you. And another term you might here is holdback, so that is any rebates the dealer may get. All of those are important in figuring out what the actual price is and your best source to find those numbers are going to be online. You can visit aaa.

com and find a wealth of information on what the vehicle costs, what the invoice is, if there are incentives or holdbacks.

Now armed with all that information, you are going to go to the dealer and it's time to negotiate. You have already driven a car, so you have a relationship with the dealer, you talk to a salesman and you should go back and talk to him. Tell him that you are ready to purchase, tell him that this is what you are willing to pay, this is what you have researched, this is what you want to pay for the car.

A couple of things that are important, don't change the conversation to what your monthly payment should be, stay focussed right now on what the actual purchase price of the particular vehicle you have decided to buy. That keeps things confined, it helps you be in control, gives you the sense of power, and really helps you get the result that you are looking for.

Now, we are going to have to negotiate a trade-in. You should have already researched what your vehicle is worth, you need to be honest with yourself on the condition of your vehicle and that's going to determine the actual trade-in value. If you decide to trade it in, it's another negotiation just like the purchase price of the vehicle. And finally, there's negotiation on financing. There maybe great rates available to you, and you need to negotiate that. Right now before you sign the papers.

Lastly, a number of things are going to be offered to you in the closing, and that could be extended warranties, that could be paint treatments, fabric treatments. These are things that each one is a separate negotiation and your ability to research this before you set in the seat is going to put you in control. Is an extended warranty a good thing? For many motors, it absolutely is. For others, no. So you need to do the research, you need to make the determination. But when you set down you should be informed because if you are not that's where things go wrong. And the process won't be as much fun and you may feel later like you were taken advantage of. And that's what you can expect in the negotiation process.

Now, in the next segment we are going to talk about what you can do after the purchase to protect your investment, keep your car running good.