So you've finally made it to the point where you can treat yourself to a new car. But you're past the point of searching Craigslist for thousand-dollar beaters; it's time to put the big-boy pants on and head to the dealership. Here's how to go car-shopping without getting taken for a ride.
Keep in mind that just because you know about cars doesn't mean you know how to shop for one. The dealers do this for a living; most people only make vehicle purchases every couple of years at most. But I do this for a living, too: I am a professional car-buying consultant, and every day I negotiate for car-shoppers who either don't have the time or simply don't want to deal with the hassle. (You can also find me on Jalopnik's Car Buying sub-blog.) The dealer's goal is to make as much money as possible; here is how you can save as much money as possible.
Don't play the monthly-payment game.
Most dealers are trained to ask you, "So, what do you want your monthly payments to be?" Don't fall into this trap. They can manipulate the numbers to hit that target, and you still might be overpaying for the car. Before hitting the dealership, you should know what your monthly budget is and work backwards; don't forget to factor in interest rates and your local tax title and tags. For example, if you can afford $500 per month and want to take a five-year loan, that gives you a budget of $30,000. However, when you factor in a five-percent sales tax and DMV processing fees, you are probably closer to $28,000. Of course, putting money down to reach that $500-per-month goal increases your spending power.
Also, check your credit and get pre-approved for financing from your local bank, credit union, or credit card. The last thing you want is to be at the mercy of the dealership to get a loan. A pre-approval forces the dealer to match or beat that rate.
Figure out what you want before you start talking numbers.
Many people overspend on a car, and it has nothing to do with any "dealer tricks"—they simply buy more than they need. Take a serious look at your budget, your needs, your wants, and your lifestyle, then match a vehicle accordingly. If you have at least two children using car seats, you don't need an all-terrain SUV to project your masculinity when you drop the kiddies off at school. Get a minivan and understand the glory that is "sliding doors." You'll thank me later.
When it comes to loading up the options, choose carefully. Do you really need the navigation package when you have a smartphone? Do you have eyes, and do you use them while driving? If so, you may not want to spend the extra cash on what I call "bad driver" aids like blind-spot assist and back-up cameras. In some vehicles, of course, these extras are necessary; this is why the test drive is so important.
Test-drive the damn car.
I don't care how many reviews you read—you won't know it's the right car for you until you actually drive it. And by drive it, I mean really drive it. None of this "quick spin around the block" garbage. Take it on the highway and give it some gas. (Don't go challenging people to a street race, though.) Make sure you're confident in how the car turns and brakes. Check your visibility—are there blind spots? If you carry around gear like car seats or sports equipment, bring all that with you and make sure it fits.
Before you go to the dealership, call and confirm that the dealer has what you want and make an appointment for a test drive. I cannot stress this enough, especially if you are a young lad interested in getting a fast car: Too often, if you stroll into a dealership, they think you're just there for a joyride. Making an appointment tells them you are a serious buyer and saves you time.
Get quotes, and lots of them.
Once you've settled on a specific car, don't talk prices right in the dealership. This is where they have all the advantage; if you go this route, be prepared for the marathon of negotiating, with all the "Well, I have to talk to my manager" back-and-forth that implies. Instead, call or email a half-dozen dealers, tell them what you want, and have them email you a quote. Some dealers will do this, and some won't; if they give you the "You have to come in to discuss pricing" line, they're most likely what we call a "stealership." Just move on to the next one.
You can use third-party sites like TrueCar and Edmunds to know the "invoice" and the average transaction price. From there, you can get an idea on what kinds of discounts you can expect. If the average transaction price is $2,000 off the MSRP, don't expect a $5,000 discount when you negotiate. Know that depending on what you want and where you live, online car-shopping may not be that easy.
If you are one of those fancy-pants folks looking to lease, that gets a little more complicated. Check out this post on how to handle that.
Know your trade value.
You probably know to check out websites like NADA, KBB, or Edmund's to get an estimate on what your trade is worth. Remember, these are "estimates"; condition is everything. Whether you had a major accident or just a fender-bender, it shows up on the CarFax, and it's going to impact your value.
Also, your custom paint job, dope-ass rims, and/or super-loud exhaust that you thought was awesome just made your car significantly less awesome for the next buyer. If you can, return your car to stock form; if you can't, be prepared to get less for it.
When you take your trade to the dealership, they'll have a technician or a used-car manager take it for a spin and evaluate it. They're going to run the VIN and vehicle details through a database, and it will kick out a number for them. If they ever pull the "Oh, we can't find your car/keys" tactic, that's another sign of a shady dealership—the appropriate response to that scenario is, "That's okay, I'll just call the cops and report a stolen vehicle." Your keys will show up real fast.
Don't let your guard down.
So you've chosen the perfect car, you've worked down the price, you've been approved for financing, and you've gotten a fair offer on your trade. It's time to sign the papers, but not so fast, bucko—some dealers will give you a nice discount and try to make up for it with "add-ons" like cloth protectant, VIN etching, and pin-striping. Often, these will be labeled as "executive packages" or some bullshit for several hundred bucks.
In addition to that garbage, they may try to push extended warranties or service plans on you. If you're like my friend Doug who buys notoriously unreliable Range Rovers from CarMax, these things are worth it. But if you're buying a brand-new car with a solid reliability history, you can probably pass. Do some research on your chosen model to see if the extra protection is worth the money; Consumer Reports and TrueDelta.com are great resources for long-term-reliability testing.
Be mindful that most car dealers, despite their historical reputation, are not "scum" that should be treated with disdain. Some of them are actually decent people who want to do things the right way. Being a good negotiator doesn't mean you have to be disrespectful. Be knowledgeable, be patient, and be prepared to walk away, and you'll do just fine.
If you have a question, a tip, or something you'd like to to share about car-buying, comment below, or drop me a line at AutomatchConsulting@gmail.com; be sure to include your Kinja handle.
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