Once you have determined which vehicle you want, there are a few more key issues you should be aware of. These issues include new and used vehicle prices, holdbacks, warranties, service contracts, and lemon laws.

New and Used Vehicle Prices. There are a number of automobile websites where you can get reliable estimates of what a dealership paid the manufacturer for a particular car. There are a number of different prices that you should be aware of. The MSRP (manufacturer’s suggested retail price) is the amount the dealership hopes to get for the vehicle. This amount is a recommended price only. The dealer invoice is the reported amount that the dealership actually paid to the manufacturer for the vehicle. This price is often called the invoice price. Some of the websites that can help you determine the dealer invoice price include www.Edmunds.com, www.Autosite.com, and www.Kellybluebook.com. It is important to know the dealer invoice price because you should use the invoice price rather than the MSRP as the beginning point for negotiations when you are negotiating for a vehicle.

You can find pricing information for used cars in the same manner you find pricing for new cars, although the final price of a used car depends on how well the car has been taken care of. Key sources include www.Edmunds.com, www.Autosite.com, www.Kbb.com, www.Nada.com, and www.Vehix.com.

Holdback. A holdback is a rebate that the manufacturer gives the dealership as compensation for holding the vehicle on the dealer’s lot. It is important for you to realize that even when the dealership sells a vehicle at a low cost, or even below invoice, the dealership still makes money because the dealer’s profit includes the holdback. The holdback money is not usually negotiable, but it is important to understand. Different manufacturers have different holdback amounts for dealers.

Warranties. Companies offer warranties to guarantee that a product has the features and capabilities promised at the time of purchase. Warranties guarantee that any problems that arise after the purchase is completed will be resolved within a reasonable period of time.

Full warranties are contracts that promise the following: (1) the product will be fixed at no cost to the buyer within a reasonable time frame after the buyer makes a formal complaint; (2) the buyer will not have to perform an unreasonable task to bring the product back for repair; and (3) if the product cannot be repaired, the defective product will be replaced with a new product, or the buyer’s money will be returned.

Service Contracts. Service contracts are agreements between the contract seller (the dealership, the manufacturer, or an independent company) and the buyer in which the contract seller agrees to provide specific services on the vehicle. These contracts may specify that the contract seller must provide free or discounted repair services or that the contract seller must cover components of the car for a specified length of time or mileage (for example, five years or 70,000 miles) after the original warranties expire. When purchasing a service contract, you should be concerned about what components are covered, the length of the coverage, and the number of miles covered. Generally, service contracts that come from the manufacturer are better because you can get service nationwide, rather than from a single dealer.

Lemon Laws. Lemon laws protect the consumer in case the vehicle he or she purchased is a “lemon.” According to these laws, your car is defined as a lemon if you make at least four attempts to fix a problem and if the car is out of service for at least thirty days during the first twelve months or 12,000 miles following your purchase. These laws give a consumer the right to return a car and request a replacement or a full refund if the circumstances meet the criteria of the lemon law.