You’re either a people-person, or you’re not.
People-people have this amazing ability to chatter on about anything with anybody, and they actually love to make small talk and figure out what makes other people tick.
Car salesmen are, by their very nature, people-people.
I am not.
If you’re like me, the idea of striking up a conversation with a total stranger about your work and your kids fills you with a bit of dread — especially if it’s while you’re trying to concentrate on making a huge purchase like a car.
I’m also not a car person, so I’m not great at making chitchat about horsepower or torque — though I’m happy to dive into the wonders of fuel efficiency, since it directly affects my pocketbook. I’m pretty sure the guys at the car lot can smell my lack of car knowledge from a mile away, kind of like how a shark can sense blood in the water.
So if you’re like me and feel like buying a new car is an exquisite form of punishment, take heart. I’ve figured out a way to get a great deal on a car — without having to talk to anyone in person or sweat your way through a series of negotiations. In fact, if you do it right, you can have your price hammered out before you even arrive on the lot.
Research, Research, Research
Figure out what kind of car you want from the comfort of your own home — a car dealership is no place for aimless browsing if you don’t want to get into a high-pressure conversation with a car salesman. Start by listing the features you want in a car and checking out models on your laptop first to get an idea about what’s out there.
Once you’ve narrowed the field at least a little bit — say, you know you want a hatchback with great gas mileage — try tapping these sources for additional information:
- Friends and Family: Know someone who drives the car you’re thinking about? Buy her a cup of coffee and fire away with your questions. People you know will be straight with you — they’re not trying to sell you anything. You can also put out an APB on Facebook asking for experiences about a certain make or model.
- Consumer Reports: Consumer Reports is a completely independent source of information about cars, and they do detailed testing of new vehicles as well as reliability reports for many model years. Unlike other online reviews, you know these aren’t placed by paid reviewers — Consumer Reports doesn’t even accept advertising dollars. You’ll need to subscribe online, or you can hit up your local library for back issues for your research.
- Your Mechanic: If anyone knows about which cars are worth the money and which are hunks of junk, it’s your auto mechanic. If you trust your guy, ask his opinion about what he drives and what he would recommend in the categories you’re thinking about. He’ll be able to give you a sense of its reliability and common complaints that come up.
Take a Test Drive Near the End of the Day
First, if you know someone who owns the make and model you’re interested in, ask to test drive her car instead of going to a dealership — you’ll get it all done much faster, and you’ll be able to solicit some honest opinions in the process.
Failing that, plan to take your test drives near closing time at the dealership.
The idea here is that you have no intention of buying a car the day that you first drive it, so there’s no need to schedule enough time to sit down and talk about pricing or financing afterwards. You can be upfront about this with the salesperson who helps you, but in my experience that may not be enough to get you out of a high-pressure situation. Take it for a spin near closing time, though, and you should be able to make a clean getaway.
Know the Real Price of the Car You Want
The sticker price is not the real price.
That piece of paper on the windshield has a whole bunch of numbers on it. One is the Manufacturer’s Suggested Retail Price (MSRP), which is the price you hear on commercials and the one that everyone wants you to think is the price. It’s really just a starting point for negotiations, so ignore it.
What you actually want to know is what the dealership paid for the car. If you go to Edmunds.com, you can research make, models and trim packages to find out the Factory Invoice Price, which is — in theory — what the dealership was charged for the car. According to Edmunds, this isn’t the real price either, because dealerships get all kinds of incentives from car manufacturers to buy in bulk or whatever. Dig a little deeper on the Edmunds website, and you’ll see their research about what average people are paying for that car as well as their estimate of what the average dealership is paying for it.
No surprise here that the estimated dealership price is the lowest of all.
Read on to learn how to make an offer:
Make Your Offer — From Your Living Room
Now that you know what the dealership paid for the car, you can make an informed offer. They won’t sell it for less than they paid for it, so make an offer that’s two or three hundred dollars above that price.
Email your offer to all the dealerships within whatever radius you’re willing to travel. Unless you live in the middle of nowhere, you should have several options. When you write your email, make it clear that you’ve emailed several dealerships and will visit the one who meets your price (or comes closest, but you don’t have to tell them that). The beauty is that you get to create a little competition to get your business, which creates some subtle pressure to lower the price.
Be warned: Many will email you back saying they need to see you in person or aren’t authorized to discuss pricing over email, etc.
That’s fine — someone will get back to and be willing to talk turkey.
The best part about this trick? You get the price in writing, and all you need to do is show up at the dealership to finalize the deal. I saved about $4,000 off of the sticker price on my last car, and it was actually a pleasure to walk into the dealership on a Saturday afternoon to close the deal quickly — this method also saves a ton of time.
Some Final Car-Buying Tips
Making an informed offer, creating some competition among dealers and getting your best price in writing ahead of time are a sure-fire way to get a great deal on your next car. To maximize your chances of getting a total steal, try these tips as well:
- Shop at the end of the month, when sales staff are working to make their monthly quotas.
- Stay flexible about trim packages and color — you want a car that’s already on the lot to speed the process and make sure your price is pre-negotiated on a vehicle that actually exists.
- Don’t be swayed by extended warranties or service plans — you don’t need them.
- Always have your price finalized in writing before you begin to discuss financing. Don’t be swayed by a lower monthly payment or other financing tricks that could leave you with a crazy interest rate that costs more in the long run.
Buying a car doesn’t have to be an exercise in interpersonal stamina if you don’t want it to be. When you take advantage of the power of the internet and make your offer in advance, you can rack up big savings on your next vehicle purchase.
How did you get the best deal when you bought your car? If you didn’t, what do you wish you had know instead?
We just bought our first car about a year ago. We had no idea what we were doing. We had just had a bankruptcy finalized about 6 months before we we bought this car. Well, they socked it to us alright. Whrn the contract was signed we agreed to pay about 17-19 G. We are still in contract with this car worth 10G ( I found out a couple months ago). Our payments are too high, out interest rates too high and we are beihind at least 1 car payment. We’ve had two reports of “over 30 days late” on our credit report. What is the safest way out of this. I’m so frustrated. Ty for any advice you can give, and if you can tell us what we did wrong.
So which luxury car is a Plug In Hybrid seats 7 and is a compact crossover suv ?
I’m a car guy and I have to say that I’m sorry, but your article just scares people. You obviously have very little social skills and just to let you know, Consumer Reports and Edmonds are the pessimists periodicals. Do you think for one minute that they allow you to haggle over the ad that you want to place in their magazine or that their writers work for minimum wage. I think not. My suggestion is wait until the end of the model year and you will get the best deal in the world. And as for extended service plans (warranties), 2000 is not very much to upgrade to a 100k plan.
Beth the best thing you could do is to get some friends and get out once in awhile and put down the pessimists friend magazines… just sayin
Everything, and I do mean EVERYTHING, in a car deal is negotiable. The price, the term of the loan, the finance rate you’re being given, and yes, even the extended warranty. Don’t pay $3,600 for a 10 year, 100,000 mile, zero deductible, free rental car, bumper-to-bumper plan that you can negotiate down to $1,200.
And stay away from ALL fabric, rust, and paint sealant packages. Avoid dealer addendum packages that list nitrogen-filled tires for $300+. And “Market Adjustment Value” add-on window stickers of (example) $2,495. All of which are designed to add working room in the negotiation process and hidden profits. Last but not least, watch out for those notorious “Doc fees.” Another trick to build profit into the sale for the dealer.
Anyone that speaks to you inside a showroom is a commissioned recipient of your money. From the General Sales Mgr., Finance Mgr., and the salesperson. They all get a slice of the profit pie.
Have your credit union/bank/financial institution “pre-approve” you for a loan. Dealers will oftentimes match that rate because they will get a piece of the interest.
Rebates. Are there available rebates? Veterans, Owner Loyalty, College Grad, Manufacturer’s Rebate, Special finance terms, Uber (yes, upwards of $1,000 from some OEM’s) rebates. You don’t HAVE to be a practicing Uber drive, just enrolled as one with documentation to show. Some OEM’s will match up to $500 after 30 days on a deposit you make into an account for one of their brand models. But if you don’t buy that brand, you don’t get the $500 returned.
Buying a car takes work, research, investigatory skills, and lots of perseverance. And stamina. But keep the emotional baggage at home. If you walk into a showroom drooling over a vehicle, there’s a high probability you’ve already lost the battle and the war.
Just to add to what Richard said. I paid my way for my college education quite nicely by working at a dealership in sales. Lots of other areas to look for discounts. Where I currently work, we have business relationships with a lot of the German car companies. As a result we qualify for employee pricing from them. Check into relationships your company might have with some of the auto companies. In addition, I am a member of a few manufacturer car clubs. The loyalty discounts they offer are about 1k off a new car. Caveat there is you can’t typically sign up and immediately get the discount. Often you are eligible after a year. Another thing to consider is European delivery for some of the German car companies. There can be some substantial savings if you take your delivery of your car there. Fewer companies are doing this but for the ones that offer it it might be worth it. I typically combine this with a nice vacation and get to drive my new car on the roads were it was meant to be driven. Sort of nice cruising down the autobahn at 100 mph and not having to worry about getting a speeding ticket.
Do a lot of due diligence on your trade’s value. That is where I made most of my money on the deals. Have a very good idea of what it is worth but be realistic. I would suggest going to Carmax and getting a cash offer from them BEFORE going to wherever you plan to buy your car. Then you at least have some idea (likely worst case scenario) of what your car is worth. Carmax will buy your car on the spot and withing 7 days of the offer they make you. So if you have one near you, check them out. A few times I just sold my car there. Keep in mind though that most states credit you with sales tax savings on your new car when traded in you old car at that dealership. Savings can be substantial. In my current state, if I trade in my 30k valued old car on my 45k new car, I’ll save about 2500 in sales tax on the new one.
Take off any modifications on your old car before trade. The dealer won’t give you any extra money for almost any mods or tricked out wheels that you put on it. In fact they many penalize you for some of them. If you have the stock parts, and it isn’t a real PITA to put them back on, DO IT! Then sale your upgraded parts online and likely at least get 50 cents back on the dollar rather than nothing (like the dealer will give you). I once got an extra grand toward a trade because the dealer want to recertify my car and with the aftermarket wheels and tires the manufacturer wouldn’t let them if it didn’t have the stock wheels. I had the stock wheels and slapped them back on. I sold my aftermarket wheels and tires for 1500. I came out ahead 2500 overall on the deal because they were going to factor in at least 1000 to put stock wheels and tires to recertify it.
As for aftermarket warranties, I disagree to some extent with previous comments. There are some good companies but check their ratings. All an aftermarket warranty is an insurance product. The big problem I’ve personally had is they typically ONLY cover repairs at one of their dealerships. Break down in the middle of nowhere, and if no dealer nearby, tough luck. OTOH on one of the aftermarket companies I was able to get them to just pay for the repair over the phone at a local mom and pop shop. Keep in mind with ANY of these warranties to keep meticulous records of all the maintenance you have done and make sure it is according to the manufacturers schedules. Don’t skimp on even things like oil filters. Some manufactures will deny warranty claims, even while under the factory warranty, if you use parts they don’t deem to be up to their specs. FCA is pretty strict about this especially on their diesel trucks. Don’t let saving $10 on a cheaper oil filter for your diesel truck cost you 10k if their is a major engine failure. Don’t think it can happen. They’ll look for anything they can to deny your claim in these major repairs EVEN if your cheapo filter wasn’t the cause, they still will use it as a basis anyway. If you just dropped 50k + on your new diesel truck, don’t cheap out on the filters. That includes the fuel filters as well.
So I am just what your thoughts are on extended warranty from the dealership, I have a 2014 1500 Chevrolet Silverado getting close to the 36000 miles of the warranty original. Bought new 5year/60000 miles supposed to cover all Power train and and other parts electric parts radiator window motors, computers and other things for around 2000.
My extended was $1,200. That’s bumper to bumper, zero deductible, and a rental up to $36 day.
It would extend me from 60,00 to 100,000. Or, an additional 40,000 miles.
You’re talking about 24,000 more miles for $2 grand. For me? I’d say “no, thanks”
Great review! I was in the car business for 15 years and what you’ll find is new or used car dealerships may really appreciate that you’ve done your homework. Show them that you mean business, and as long as your offer is “realistic” then you’ll get what you want. Buy at the end of the month, but beware of the after sale!
Oh my, so many holes, so little time.
Buying a new automobile based on the ownership experience of a friend who already owns that particular model. What if she made the wrong choice for herself to begin with? Would that lead her to give a bad recommendation of an otherwise quality vehichle. Perhaps that person bought a bad example of an otherwise quality make? Remember, vehicles are just very large, complicated appliances. Even Mercedes builds a bad one once in a while.
Possibly there’s features in a model out there of that vehicle she owns that you didn’t find in the one she lent you for your test drive that would make the vehicle more appealing or influence the quality of the driver’s experience behind the wheel.
Yes, your mechanic’s opinion might be factored in. But remember, they never see them when they’re new and statistics show that the vast majority of owners return to the dealership for maintenance the first three years of ownership. That being said, your mechanic is definitely a wealth of information so long as you’re not shopping for a model that has come out in the last two or three years. Remember also that they are human beings with their own preferences and biases. The easiest example being trucks where all full size trucks are more or less on par, many would swear to never own this make or the other. Opinions being like, well you know.
As far as pricing goes, sure if your in the market for something that’s basically a commodity such as a Focus or a Civic, and you’re ready to sacrifice color and equipment choices your pricing strategy might work. No dealer is going to sell a model in short supply for a three hundred dollar profit. A high end make such as Lexus,Mercedes or Infiniti won’t sell a seventy thousand dollar vehicle for a three hundred dollar mark up. And I didn’t even see the words trade in mentioned in your article. According to The Automotive News, approximately 85 percent of all transactions involve a trade in. Yes guides are a good place to start. Consumers being educated regarding the value of their trade is a good thing all around, but you still can’t buy a used car sight unseen. Neither can the dealer.
As far as service contracts go,sure for a lot of folks it’s an unnecessary expense. Lessors of new vehicles obviously shouldn’t be candidates as theoretically they should be done with their vehicles about the same time the original manufacturer’s warranty will be expiring. What about the consumer who is purchasing a new vehicle with a three year, fifty thousand mile warranty and drives eighteen thousand miles a year. They’ll be out of warranty in about thirty months. Statistically speaking about fourty percent of the way through their finance contract. If something catistrophic fails and they’re out of the original factory warranty, then what? Maybe they can give you a call.
The bottom line being that there’s not one blanket of advice that works for even a sizable percentage of consumers in a transaction with as many moving parts as the purchase of an automobile.
The next time you want to write on a topic outside of your wheelhouse, keep it simple. If you’re giving advice on shopping for a price on a vehicle, confine yourself to that one topic.
I always buy used cars based on the dealership, that way I can buy an extended service plan directoy from the factory. For example I buy a used Chrysler from a Chrysler dealer and a Chrysler factory service plan. They have always been worth their weight in gold. I NEVER buy aftermarket service plans from non factory companies.
All great advice. Another tip or two – if you do end up going in to the dealership, and start doing the deal and don’t like what you hear – get up and walk out the door. Don’t hedge, just do it. You won’t believe how hard they will try and get you to stay, but stay firm and walk. They will follow up. Also – many sites show the length of time the car has been on the lot (in days). They are more willing to deal on cars that have been sitting. Finally – certified pre-owned cars are an incredible value. If you do the deal right you stand a good chance of never being upside down for the life of the loan.
I’m sorry but getting a ten year 100,000 mile warranty is actually worth a couple extra grand! Trust me. My first car had a timing chain, (not belt) and my mother talked me into getting the warranty. So in 6 months when it broke it cost me $50 for a brand new engine! Yes a new engine. Plus mechanics will rip you of just as quick. Even if you know about cars.
Very informative. Thanks