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How to snag a bargain on four wheels

With the rising price of gasoline pushing up driving costs, some helpful tips on how to save a few bucks on your next car purchase would certainly come in handy right now.

With the rising price of gasoline pushing up driving costs, some helpful tips on how to save a few bucks on your next car purchase would certainly come in handy right now.

The overall cost of owning and running a passenger vehicle in the United States now averages 54.1 cents per mile, up 1.9 cents per mile from 2007, according to an annual study from AAA released this month.

AAA estimates it will cost $8,121 to own and operate a new passenger car driven 15,000 miles this year, compared with $7,823 last year. While some driving costs — maintenance, full-coverage insurance and depreciation — are slightly lower this year, other costs have risen, especially fuel.

“Higher gasoline prices have more than offset these savings and pushed the overall cost of vehicle ownership and operation higher this year,” said John Nielsen, director of AAA’s Approved Auto Repair network.

High gas prices are also changing consumers’ car-buying habits, according to Philip Reed, senior consumer advice editor at automotive research Web site

“The economy and gas prices have changed buying trends somewhat, and what’s happening is people are buying smaller, more fuel-efficient cars, and they’re also buying inexpensive and used cars,” he said.

But if you’re in the market for a new car and hoping for a bargain, the most popular vehicle categories are often the worst place to look, he said.

“Whenever you have a lot of activity on one car category it doesn’t favor the buyer,” said Reed, adding that you’re more likely to find a deal from a domestic car manufacturer.

Over the last few years Nissan, Honda and Toyota have positioned themselves well in category of small, fuel-efficient cars, introducing the Versa, Fit and Yaris, respectively, to the U.S. market. General Motors has small cars like the Chevy Cobalt, and Ford’s Focus has seen an increase in sales activity because the automaker has promoted the fuel-saving aspect of the car, said Reed.

“You won’t get much below sticker price for a Fit, but you’re more likely to see incentives or discount prices for the Ford Focus,” he said. “In general, Ford is eager to sell as many units as they can, and that’s the same for all the domestic manufacturers right now because they are in some difficulties compared with Asian automakers.”

Low-interest financing deals are also a way to save money, said Reed, although car consumers tend not to get excited about them because they don’t make the car buyer “feel” as though they’re getting thousands of dollars off a car’s sticker price. In fact, he said, low-interest loans may save a customer more money than a rebate.

Another tactic for finding a cheap — and reliable — vehicle is to look for models that recently have been redesigned and purchase a version from the previous model year, said David Champion, director of automobile testing at Consumer Reports.

Many car models are updated every four or five years, he noted, and the most reliable model is usually the one that comes out just before the redesign.

“For the Honda Pilot SUV, for example, the most reliable car model year right now is probably the 2008 model because the new 2009 version is about to come out," he said. "Honda is probably doing a really good deal on last year’s model because they are trying to get them all sold."

Another good way to snag a deal is to buy a car at the end of the month, said Champion.

“After the 25th of the month dealers are likely to be trying to make their month-end bonus, and maybe the bonus is an extra $1,000 if the dealer sells 10 vehicles,” he said. “The dealer might have sold nine, and so if you’re customer number 10 they might sell a car to you at cost so they can make the $1,000 bonus, which is worth more to them anyway.”

It’s also worth shopping for a car at the end of the year to take advantage of year-end deals offered by manufacturers, Champion said. There might be special incentives for models that are in a battle to be the sales leader in their category, he said.

When negotiating with a car dealer it also helps if you know how much the dealer has paid for a car so you can negotiate from the base price rather than from the Manufacturer’s Suggested Retail Price, or “sticker price.” The price paid by the dealer can be found online at Web sites such as

“The big thing about buying a new car is homework, homework, homework,” Champion said. “Don’t forget that everything is negotiable.”

It’s also important to be practical, Champion added. If you have a boat and use it once or twice a year, don’t buy a vehicle just to tow it. Instead, rent a pickup when you need to tow, put the wear and tear on that vehicle and settle for a sedan the rest of the year, he said.

“Buy the best appliance for the cheapest amount of money,” said Champion. “That’s especially important now because of the economic climate; the price of gas is high and the amount of disposable income you have is going to be reduced even further if gas costs go higher.”

A used car is a good investment, Champion said. Many cars can go for up to 200,000 miles without any repairs, he said, and so if you find a good used car with 40,000 miles on the clock it could be trouble-free for another 160,000 miles. That could represent a significant saving, he said.

“A good quality used car is probably one of the best deals out there,” he said.

In the current economic climate, you might also consider holding on to the car you already have for a little longer, counsels’s Reed.

“If you trade in your SUV for a Prius because you want to save on gas prices it’s a mistake, because when you change vehicles there are related fees such as sales tax and DMV fees, and they are costs people don’t tend to think about,” he said.

He notes that Americans spend about $1,200 a year to gas up their cars, on average. So it might not make financial sense to spend $1,800 or more in taxes and fees to dump a gas-guzzler and buy a new Prius.