10 Tips for Regret-Free Car Buying
Spending too much for anything is a downer — especially a car. Here's how to beat the dealer at his own game.
There's really no such thing as a professional car buyer, but there are 268,300 professional car salesmen in the United States, according to the Bureau of Labor Statistics. And while you may go into a dealership shopping for a new car only a half-dozen to a dozen times in your life, these guys are selling that many cars each week, so you can take it for granted that they know more than you about buying a car.
There's no doubt that most salesmen want to get you into a car that you'll be happy to own . It's in their interest to make you as comfortable as possible with the buying experience so that you'll recommend them to your friends, and then come back yourself when it's time to trade in for a new vehicle. But that doesn't mean they're not in the business for the money. It's a car salesman's job to make as much profit on each sale as he can get away with.
The car dealer has the home-field advantage, but with some preparation and savvy negotiating, you can place yourself in a much better bargaining position than the average rube off the street. Here we give you 10 tips for dealing with the savvy car salesman.
Tip 1. Browse with no intention of buying
The first time you go to a dealership, you shouldn't be looking to buy. Tell dealers that you're just looking and don't let them talk you into anything. Better yet, drop by on a day when the dealership is closed. You can roam around the lot and inspect the window stickers with no pressure whatsoever. Take notes on what you like, then return home and do some serious research.
Tip 2. Find out what the dealer paid for vehicle
You can't know the dealer's hand in a casino, but you can in a car dealership. "Knowledge is key," says Michael Royce, a former car salesman who now runs the website Beatthecarsalesman.com. "One of the most important pieces of knowledge a car buyer needs is the invoice price (the dealer's cost) of the car he wants to buy. Fortunately, the Internet makes getting that vital info easy."
Plenty of websites can give you the invoice price of any vehicle (you can search for invoice prices at MSN Autos here), so plan to negotiate up from there, not down from the sticker price. Make sure to get the invoice price that includes all the options you want, not just the base price of the vehicle — the options have a dealer markup, too.
Tip 3. Get an online price quote
In fact, get a few of them. Most dealerships have an online sales department that will get you a quote within two to three days. You can also use services such as Autobytel.com and PriceQuotes.com to cross-shop multiple dealers. You're under no obligation to pay the quoted price, and it can be a potent bargaining chip with other dealerships.
Tip 4. Get your paperwork in order
Print out the invoice price on the exact model you want with an itemized list of the options you're considering. Also, research any manufacturer incentives and rebates that apply to the car you're shopping for, and subtract those from the invoice price. If you are interested in financing, find out your credit score ahead of time; everyone is entitled to one free credit report each year from each of the three major credit reporting agencies. Also, shop a loan by researching the rates at competing banks and local credit unions. Write down all the numbers and bring all the documents to the dealership. If the dealer can't match or beat those rates, tell him you'll finance the car another way.
Tip 5. Forget about leasing
"Dealerships love to push leasing because it is so profitable for them, but leasing is almost always a bad idea," Royce says. "In a lease, you are simply renting the vehicle for a set period of time. Once that term expires, you must return the vehicle to the dealership with nothing to show for your years of payments."
Must-See on MSN
I am so sick of someone who was in the car business for three months trying to take down the careers of everyone else. You could not make a living, and you think you can make a living by bringing everyone else down ! If you want to do some good, teach me how to cut a $ 200.00 grocery bill in half, or not pay a 1000 % mark- up on my meds. I have been in the auto business for 16 years and used to make a mediocre living. Working 60 to 70 hours a week, every holiday , & no weekends off . Now I spend days or weeks e-mailing someone, picking them up at the airport, & kissing their ****, only to lose a deal by $ 25.00 to the competition. If I do get the deal, I make an $ 80.00 mini. How many cars do I have to sell to Support a family of four every month ? Yes the dealers get paid on Hold Back , but the salesmen don't .
It's crazy that every server, or helper in the world is entitled to make a living, or profit, but if you try to help someone with the second biggest purchase of their life , you are a liar, a crook & a thief, and don't deserve to make a living, even though you work your butt off, and sacrifice your life to help people ! I dare anyone who does not understand, to try to raise their family in this business. especially the AUTHOR OF THIS BLOG !
Sam foley of MSN Autos is ignorant when it comes to leasing. If you plan to keep your car for many years or drive a lot of miles than leasing is not for you, However if you buy a new car every 3 years leasing is the smart way to go and will save you thousands. Just to keep it simple if you buy a $20K car, put $2K down, finance for 5 years with a 4% rate your payment will be $356 per month. The total paid after 3 years is $ 14,816. If you trade at this point you will most likely have negative equity but again I will keep it simple and say the trade is worth what you owe.
If you put $2K down on a 36 month lease you will have a payment of around $275 at the most. After 3 years it has cost you a total of $11900 and will have saved around $3000.
Who writes this crap? I buy a new car every three years and I don't experience any of this written nonsense. I would love to write an article about poor irresponsible journalists who have nothing better than to write crap and make it look like every car dealer look like a crook. Crap, crap and more crap.
All the products the dealer offers me have benefits. I drive so many miles per year that I'm out of the manufactories warranty in less than a year. I always purchase the extended warranty and it seems to always pay for itself. Gap was a good product when my car was totaled and my insurance would not pay the entire loan off. Gap paid my $9783.07 difference. I'm sure glad i got it and did not listen to the idiots who write crap like this article.
Of course they are going to try to twist your arms off. It's a business that encourages that kind of behind-the-back, hidden agenda dealing.
If you want to get a new car that's priced right, do this:
1. don't go to a dealer except to see the car up close and drive it. When you have finished with that, tell them you don't like the car well enough to buy it, you'll keep looking.
2. sell your old car yourself
3. call a couple reputable auto brokers and get them to get the best deal on the new car. They know how the game is played. Most of them are former dealers or at least experienced salespeople. They know all the tricks already. For a $500 fee, they will cut out the fat.
Buy a 3 year old car with a good history and save about 35%, and even save the sales taxes if you buy it from a private party.
I'm not opposed to a business making a profit. As a consumer I do shop and compare. No sense being totally ignorant. When working with a salesperson in any product, if I am comfortable, I purchase the product. If your not comfortable. WALK! You are adults. Be responsible for your decisions and if you do make an error, and we all do once in awhile, quit your whining. Think of it as an education.
The one thing that I have against some dealerships is there methods of driving up service charges. one goes into a dealer for let say an oil change. Next thing you know that $40 oil change is up to $145 because of something else that is recommended by the factory due to the miles on the vehicle. Preventive maintenance? Factory can recommend all they want. Cars wear at different rates. Driving habits have a large impact. And some people are harder on things than others. Be honest and have some integrity. Service what has to be done and leave the customer with a good feeling that they can trust you the professional. In the long run I have to believe that your business will grow.
This article is very helpful when you are purchasing a garbage brand.
@Michael: I heard buying things in cash works out great too!
I have read a lot of posts about how car salespersons and dealerships need to make money to stay in business. I have also read posts about how people do not negotiate with Nike to buy things. There is a huge difference here. Nike has centralized warehouse locations and an online direct option for purchasing its product. However, I can only buy a new camaro by dealing with a GM dealer, but I would rather buy one from GM directly. I do all of my researching online, and don't even care what the salesperson has to say about the car. By the time I walk up on the lot, I will know a lot more about the car I want than any salesperson ever will. I see dealerships as an antiquated aspect of society that, with the advent of the internet, is not even truly necessary anymore. Can anyone explain the value added of a dealership over the ability to buy my car online?