Current Events > ITT: Car buying tips.

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ITT, I give out tips on buying a car. Feel free to rebut, add, ask, etc.

1) Ask yourself - Do I need a new(er) car?
Without putting any emotions into it, you only need a new car if your car is suffering from structural damage (big accident, rust, etc.). Except for structural damage, it is almost always cheaper to repair and keep your old car than it is to buy a new(er) one for $20k+. Now that's out of the way, do you still want a new car? Here are some most likely benefits of a new car:

• More Reliable -This means in the middle of your roadtrip or your daily driving, it is far less likely that it will crap out on you and you'd need a tow to a mechanic.
• More Comfortable - Newer cars come with much more creature comforts than cars from a decade ago.
• Safety - Newer cars have significant improvements to safety standards.

If you ultimately decided that you're going to buy a newer car, read on.

2) Buy new or lightly used?
Depending on the car you're shopping for, it may make sense to buy new. Pickup trucks, utility-focused cars, and cheaper sedans/crossovers, buying brand spanking new might be comparable to buying used, after negotiating and manufacturer rebates. However for luxury cars, sport cars, convertibles, and full size sedans/SUVs, buying a 1-3 year old lightly used (or certified preowned) will be significantly cheaper (we're talking 40% or more off).

For a rough ballpark, check out autotrader.com or cars.com, and look for the make and model of what you want, and the pricing advertised. This is just for the "ballpark", because prices can always be negotiated.

3) Tips for Buying New
Go to autotrader.com or cars.com, and search for the new make/model you want, and the location to "unlimited" from your zip code. Then e-mail blast away to the dealers. Ask them for the lowest possible price. Make sure to share with them your zip code (because manufacturer rebates are location based), and to share your eligibility for various rebates (you're a recent grad, you currently own their car (or their competitor's cars), you're a USAA/AAA/Costco member, etc...). When you get the price, make sure that the price you got is representative of what you will be actually paying: ensure that you qualify for all the rebates, and ask for the final out-the-door price with all dealer fees. You should expect a dealer fee of $200-$500; anymore than that, ask them to reduce it or reduce the final price of the vehicle. If you see something weird being added (in addition to dealer fees, taxes/registration/title fees), question it.

Now that you got the printout, use that to negotiate with all the other dealers. Once you get the lowest price that you're happy with, go to the dealer you'd actually want to buy it from (e.g., a local dealership), and ask them to match it. Never enter a dealership until you have the out-the-door invoice from that dealer. If any dealer, during this stage, tells you that you should come in to talk about the price (even after you say 'no thank you'), ignore them and move on to the next dealer.

If your local dealership will not match the price, or cannot come close to it, just buy it from that out-of-state dealer and ship it for ~$500. If the car, when delivered, is not what you expected (has damages or was falsely advertised), reject the delivery and you don't pay anything. Easy-peasy.

4) Tips for Buying Used
First and foremost, expect very little wiggle room for negotiating a used car. It's not like buying a new car where you can get thousands (or tens of thousands) off the advertised price. You may get $1,000 off if you're lucky.

Follow the steps in #3, but with similarly equipped used cars. Once you narrow it down to several cars, the inspection step begins. For most brands, if you're buying a certified pre-owned vehicle (CPO by the manufacturer, and not CPO by the dealer!), you can treat is as "new", and don't really have to get the car inspected. But if you're buying a non-CPO car, read on.

When you come to the lot, do a walkthrough. Check for any scratches, dings, etc. Then enter the car, and check for any warning messages. Open, pull, move, etc. everything. Don't be gentle; use force. When you actually drive it, once the engine is warmed up, floor it. Brake hard. Treat it terribly. You're trying to "break" the car. If, after all this, the car is fine, move on to the next step.

Tell the dealer/owner that you want to get the car inspected by a mechanic. If they seem apprehensive or deny, walk. Don't buy the car. If not, take the car to your mechanic, pay him a diagnostic fee (they'll usually charge anywhere from $20-$200 for this), and do a full check of the car. If there's nothing wrong with it, good! If something's wrong with it, it's up to you whether or not to still go with the car. You could always use this as additional ammo to further negotiate the price down.

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5) Getting Free Stuff from a Dealer
Once you finalize the sale price of the new/used car, you can ask for additional things that cost the dealership next to nothing. Such as software updates, navigation updates, rubber/all-weather mats, various items (dolls, cups, pens, etc. with their branding), tinting, etc.; they won't say "no", unless it's something very expensive (~$200+).

6) Financing from Dealers
When you're buying a car from a dealer, do not talk about anything else except the final price of the car. Do not talk about financing options, your downpayment, that you're going to pay in cash, that you have a trade-in, etc. Only after you finalize on the price do you bring these up. And when financing gets brought up, they'll talk mostly in monthly costs. Tell them you're more interested in the APR and the length of the loan. It is not uncommon for the pricing of the car to be tied to a financing of the car. Don't be scared by this. If the finance offer is unreasonable (above 5% APR), and they will not let you get the car for the price you negotiated it down to, and you still want to buy the car that day, sign up for that loan, then just refinance later. Otherwise, walk away, get your own financing, then come back, as they want to sell you a car.

7) Addons from Dealers
You thought you were done with the negotiating after the sales guy? Hah! Here comes your worst enemy - the finance manager. The finance manager will be there to sell you the loan (if the sales guy failed) and sell you all the bullshit addons (paint protection, interior carpet protection, maintenance plan, extended warranty, etc.). Do not let your guard down! All the addons are negotiable, and right at this moment, it's the worst place to even consider buying, because you have no information. Reject all options, and just buy the car. You can always buy them later.

If you choose to buy them later, call the dealers nationwide and ask to speak to a finance manager. Tell them you want whatever product that you want (e.g., extended warranty) "at cost + $100". They'll most likely say "no, we can't do that", and offer something like "at cost + $300"; ask them what that final price is, and rinse and repeat. These finance managers will lie to you. You'll find this out very quickly, because "at cost" will be different for each dealer you call (e.g., first dealer may say he's okay with "at cost +$300" and give a final sales price of $2000, but the second dealer said "at cost +$500 is the lowest I can go" and give a final sales price of $1900; this means the "at cost" is $1400 or less, not $1700 the first dealer eluded to). Once you repeat this with tens of dealers, and get the rock bottom pricing, you can buy it directly over the phone and they can apply the service product to your VIN directly. Or you can go to your local dealer, ask them to match it, and they'll do it for you there.

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5) Getting Free Stuff from a Dealer
Once you finalize the sale price of the new/used car, you can ask for additional things that cost the dealership next to nothing. Such as software updates, navigation updates, rubber/all-weather mats, various items (dolls, cups, pens, etc. with their branding), tinting, etc.; they won't say "no", unless it's something very expensive (~$200+).

6) Financing from Dealers
When you're buying a car from a dealer, do not talk about anything else except the final price of the car. Do not talk about financing options, your downpayment, that you're going to pay in cash, that you have a trade-in, etc. Only after you finalize on the price do you bring these up. And when financing gets brought up, they'll talk mostly in monthly costs. Tell them you're more interested in the APR and the length of the loan. It is not uncommon for the pricing of the car to be tied to a financing of the car. Don't be scared by this. If the finance offer is unreasonable (above 5% APR), and they will not let you get the car for the price you negotiated it down to, and you still want to buy the car that day, sign up for that loan, then just refinance later. Otherwise, walk away, get your own financing, then come back, as they want to sell you a car.

7) Addons from Dealers
You thought you were done with the negotiating after the sales guy? Hah! Here comes your worst enemy - the finance manager. The finance manager will be there to sell you the loan (if the sales guy failed) and sell you all the bullshit addons (paint protection, interior carpet protection, maintenance plan, extended warranty, etc.). Do not let your guard down! All the addons are negotiable, and right at this moment, it's the worst place to even consider buying, because you have no information. Reject all options, and just buy the car. You can always buy them later.

If you choose to buy them later, call the dealers nationwide and ask to speak to a finance manager. Tell them you want whatever product that you want (e.g., extended warranty) "at cost + $100". They'll most likely say "no, we can't do that", and offer something like "at cost + $300"; ask them what that final price is, and rinse and repeat. These finance managers will lie to you. You'll find this out very quickly, because "at cost" will be different for each dealer you call (e.g., first dealer may say he's okay with "at cost +$300" and give a final sales price of $2000, but the second dealer said "at cost +$500 is the lowest I can go" and give a final sales price of $1900; this means the "at cost" is $1400 or less, not $1700 the first dealer eluded to). Once you repeat this with tens of dealers, and get the rock bottom pricing, you can buy it directly over the phone and they can apply the service product to your VIN directly. Or you can go to your local dealer, ask them to match it, and they'll do it for you there.


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Step 1: Don't buy from a dealership.

Fossil posted...

Step 1: Don't buy new from a dealership.

FTFY. You can get pretty good deals on program cars

I think me and my family are gonna buy from carvana
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Fossil posted...

Step 1: Don't buy from a dealership.

Axiom posted...

FTFY. You can get pretty good deals on program cars

/facepalm

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