Buying a New Car
For many of us a new vehicle means excitement and adventure, the chance to own the car or truck or our dreams. But a shiny exterior and rims can hide a host of problems, and financing choices can save or cost buyers a great deal of money.
Each year the Consumer Protection Division receives hundreds of complaints from Iowans about new car sales and financing. Will you still be happy with your purchase a year after you've driven it off the lot? These simple guidelines can help you get the most out of your next car purchase.
If you do have a problem, give the seller or lender a chance to resolve the problem. If that doesn't work, contact the Consumer Protection Division.
Do your homework: Know what you want before you shop
- Decide how much you're willing to spend, then read car and consumer magazines to find out what's available in your price range.
- Consider the total purchase price, including interest;not just the monthly payments.
- Don't set your heart on a particular make or model;identify several features that you think are important and see which models offer them.
- Check each model's reliability.
Shop around: Don't buy the first vehicle you like
- Visit several dealers. You might find a car with similar features for a lower price.
- Test drive any vehicle you are thinking of buying but remember to consider and compare all features.
- Compare manufacturer warranties as well as options. A good warranty can increase the value of a vehicle.
- Shop around for financing, too. Compare the dealer's financing with that of several lending institutions to find the best interest rate.
Reconsider add-ons: Don't buy unnecessary extras
- Some auto manufacturers recommend against rustproofing new cars and trucks. Rustproofing a new vehicle may even cancel your warranty.
- Tinting your car or truck's windows may make it illegal to operate in Iowa. Iowa law requires that the windshield and front side windows allow in 70% of the available light.
- A service contract may be unnecessary if your car or truck has a good warranty.
- If you do decide to purchase add-ons, compare the dealer's price with prices of independent auto customizing outlets.
Trade-ins: Get the best deal for your old car
- You might get more money for your old car or truck if you sell it yourself rather than trading it in.
- Whether you decide to sell your old vehicle or trade it in, know what it's worth before going to a dealership. Check a used-car price book available at your bank or library.
Make an offer: Negotiate the best price
- Most dealers expect you to make a lower offer rather than pay the full sticker price.
- Some dealers will ask for a deposit to hold a vehicle for you. Before making a deposit, ask if the deposit is refundable and get a written copy of the refund conditions. Think twice about buying a vehicle from any dealer who will not put refund conditions in writing and give you a copy.
Read the contract: Don't sign until you're ready to buy
- Take time to read any purchase contract thoroughly.
- Know the answers to these questions before you sign a purchase contract:
- How much is my down payment?
- How much are my monthly payments?
- What is the interest rate?
- Make sure any spoken agreements are written on the contract under "other conditions of sale.
- Do not let a dealer pressure you into making a decision until you are ready. If you are not ready, ask for a copy of the offer, take it home, and come back later if you decide to buy.
- Get a copy of anything you sign.
- Remember, you do not have a 3-day right to cancel your contract or purchase from a car dealer's lot.
Buy or lease? Know the difference between buying and leasing
- When you lease a car or truck, in most cases you will not own that vehicle when the lease expires.
- You might not be allowed to buy the vehicle at the end of the lease. If you are allowed to buy it, you will need to pay additional money.
- You may be required to pay a penalty if your mileage exceeds the mileage agreed to the lease.
- There may also be substantial penalties if you decide to end the lease early, even if you want to buy the car.
888-777-4590 (outside of the Des Moines metro area)
Office of the Attorney General of Iowa
Consumer Protection Division
Hoover State Office Building
1305 E. Walnut Street
Des Moines, Iowa 50319-0106