No time like the present to buy a car

Doing a little homework before going into a dealership will help buyers gain the upperhand during negotiations.

If you are in the market for a car, there may not be a better time to go get one. Of course, do lots of homework first: Figure out what make and model are best for you, then read up on how to get through that whole showroom ordeal.

But apparently plenty of folks agree that it's a good time to buy a car, because Americans bought 20 percent more of them last month than in August of last year.

"That's bascially going back to the good old days," said Phil Reed of Edmunds.com.

He said that about 12 years ago, annual car sales in the United States was 16 million; car sales in 2012 are on track to reach 15 million.

What is causing this boost in car sales? Among many factors, incentives such as zero money down and zero-percent financing for up to five, sometimes six years. Such incentives can save several thousands of dollars over the years.

Reed said that a buyer of a 2012 Ford Fusion, which costs $22,300, will have a monthly car payment of about $360 for 60 months, if the buyer has zero-percent financing. Without, they would pay $427 with a 6.9 percent interest rate, a difference of $3,000 over five years.

If a buyer wants to take advantage of incentives, he should first apply for independent finanancing. After applying, the buyer will know what kind of interest rate they'll qualify for. Armed with that information, the negotiation process at the dealership will be easier.

For more tips, take a listen to the audio above.

About the author

Tess Vigeland is the host of Marketplace Money, where she takes a deep dive into why we do what we do with our money.

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