Have We Got A Car Deal For You!

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Thanks to the unprecedented bargains they offered in recent months, car dealers have cleared out most of their 2001 inventory and are getting more selective with their deals. Financing at 0% is now mostly limited to shorter, 36-month loans. Audi and Hummer are no longer offering special inducements, and at other carmakers, fewer models are on the sale rack. In general, however, buyers are still asked to choose between two types of incentive: cheap financing or a $2,000 to $3,000 cash rebate.

How do you calculate which to take? "It's really hard" because of the many variables involved, says Art Spinella, vice president of CNW Marketing Research in Bandon, Ore. But you can make a smart choice by getting key information before you head to the dealership:

--Your credit score. As more cars have moved, dealers have tightened up the credit requirements needed to qualify for 0% financing. You now need a credit score as calculated by Fair Isaac & Co. of about 660 or above, which immediately rules out two-thirds of the population. You can access your score for $12.95 at myfico.com. If you don't qualify for 0%, opt for the rebate.

--Your payment preference. If you qualify for 0% financing and can afford the monthly payments, that's the way to go. Even if you've always been a cash buyer, 0% financing is best because it allows you to invest the money until the payments are due. The decision isn't as clear cut if you need to stretch out the payments over four or five years. On a 48-month loan, you can generally figure that each percentage point you lop off the interest rate will save you $20.50 for every $1,000 that you borrow. You can head to cars.com on the Web, where an incentives-comparison calculator will allow you to see a side-by-side snapshot.

--How long you keep a car. If you trade in every three years and log fewer than 15,000 miles annually, leasing is a good option. Residual values aren't so inflated as they were a few years ago, which means monthly payments are higher. But on a regional basis, there are some sporadic good deals. You're getting one, Spinella says, if you can find a monthly payment on a 36-month lease that's one-third lower than the monthly payment on a 60-month purchase.

--Other costs. The long-term cost of a particular car goes far beyond your monthly payment. The 2001 Mitsubishi Montero, for example, costs several hundred dollars more to own per year than the other vehicles in its class because of higher insurance rates and higher repair costs. (Estimates on individual vehicle repair costs are available from the Insurance Institute for Highway Safety at iihs.org.)

Once you've nailed these details, it's time to shop--and shop hard. A discouraging result of the recent big incentives is that consumers have been haggling less. According to research by CNW, only 42% of car buyers even attempt to negotiate, a figure that varies widely by city, from 61% in Detroit to 31% in Seattle. The lesson: if you don't ask, you don't get. Shoppers in Detroit are saving an average of 22% off the sticker price. Shoppers in Seattle save only 7%.

Jean Chatzky is editor-at-large for MONEY magazine. You can send her an e-mail at moneytalk@moneymail.com