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How to Buy a Car: Step Two

Car Buying What to Know

Car Dealers are Not Scary… I promise. 

So you want to learn the story how blogging got me into a new car? Sounds crazy right, but it’s true. It’s probably not exactly what you think, but blogging did put me in a position where I learned how to properly test drive cars,  negotiate the deal as a woman and everything else I needed to know about buying a new car. With the side-by-side help of The Car People at Edmunds.com, I learned the ins and out of car buying during an intense three-day “How to Buy a Car” boot camp at their headquarters in Santa Monica. 

Consider this your personalized car buying guide. 

We are going to start by tacking all the big questions one faces when buying a car from a dealer. Tips, tricks and secrets that the dealers do not want you to know.

Related article: How to buy a car: What to know BEFORE you go to the dealer.

How to buy a car

When is the best time to buy a car?

Right now, end of year is without a doubt the best time to buy a new car. The new models have been rolling out, and car dealers everywhere are trying to make room for the 2016 inventory. You see the commercials, and if you ask – they’ll even toss in a big red bow. Personally, our best car shopping experiences with the biggest deals have been on Christmas Eve and Christmas Eve Eve.

End of month is also a great time to purchase a car with the best car deals. When buying your vehicle at the end of the month, make sure to lock in your financing and incentives. Typically, banks will honor the pricing for 30 – 60 days depending on the institution. In case you need to order the car, if it does not arrive until the following month and the factory has announced a better buying incentive, a good dealer should notify you of the change and honor it. This has happened to us twice with two different car manufacturers. If you don’t hear from them, be proactive and ask if they will honor the newly announced incentives. 

Before you leave the house

Make sure to re-read Step One: How to Buy a Car. There is a wealth of valuable information. Also, view any dealer and manufacturer’s leasing/financing incentives online, check inventories online, find out the dealer’s internet sales manager and request an itemized invoice.

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Which is better? Buying vs. Leasing?

If you want the truth, we’ve learned cars and trucks are simply not made the way they used to be and do not last as long. They are also very expensive to maintain and fix. The view of “owning vs. renting” has shifted  over time, and buying an automobile will end up costing a lot more the longer you keep the vehicle. With a lease, you have a new car with warranty and maintenance covered every few years. 

It’s important to find out what’s your overall cost? Some cars are cheap to buy, but expensive to own if you are financing and not leasing. Don’t forget to factor in maintenance, insurance, and gas. Also, there is a very slim profit on new model cars because they sell on invoice. Used cars and service is the real bread winner at dealerships.

Tip: A common trend in car buying right now is leasing to own. Negotiate on a lease and if you like the car, renegotiate at the time of the buy out. Yes, this is a perfectly good option! It will also allow you to keep your monthly payments down for a few years. When leasing a new car, the buyer can technically negotiate the buy out of the car twice. Once on the front end during the initial purchase of the new car, and then again when it’s time to turn it in if you decide to then finance. 

CHEAT SHEET: How do you negotiate the best deal for buying a new car?

So you’ve found the car. You’ve read Step One: How to Buy a Car? You know exactly what you want, and your gut is telling you after that test drive that this is the one. OK, so here comes the hard part, but it really does not have to be that difficult. 

The best way to learn how to negotiate car price? Ask for help.

Once you get the deal you feel most comfortable with, ask for an itemized print out and call Edmunds.com right from the dealer or when you get home. #AskTheCarPeople offer this free service and will collect the numbers you were given and determine what kind of deal you’ve been offered, what other questions to ask the dealer and which costs can be lowered. Having this service at your fingertips is invaluable. You can also contact them on Facebook, Twitter or with their phone app. Think of it as your very own personal car buying service slash auto finder.

You might think all car buying websites are the same, but they don’t have the personal touch that Edmunds.com offers.  It’s also a great place for research authentic car reviews and opinions on vehicle financing complete with vehicle finance calculator.

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Closing the deal: Car Buying Tips

First, did you read Step One: How to Buy a Car?

This isn’t about beating down the dealer. This is their job and you need to respect that. Once you take the emotion out of it you’ll be ahead of the next guy. However, it is more than OK (and expected,) for you to educate yourself and not be bamboozled by hidden costs. Dealers are not your friends, but they don’t have to be your enemies either. They are trained sales professionals who know what to spot, questions to ask and vet information without you even realizing it.  Remember, they’ve dealt with better and worse than you.

Your ultimate goal is to find out the “Real Price.” To do this you need to be polite; yet effective. This is how you will position yourself and allow leveraging to work on your behalf. It’s nice to be nice. It will also benefit you in the end. Think what you want, but your attitude will ultimately determine what you pay for the vehicle. If you go in with a chip on your shoulder, nice Mr. DealerMan will knock it off and make you say, “Uncle” without you even realizing it.

Some ways to leverage are casually mentioning in conversation that you’ve been to three dealers who have given me better prices in writing, saying something like, “I really want black and this model is silver. If it’s the right price, I will consider it.”

What to know about incentives

It’s important to know walking in if you plan to pay cash. If not, explore the manufacturers financing and lease offers you’ll be surprised at what you find.

Use the advertised pricing as a guide, not gospel. Price is only the beginning, not the end; focus on the entire deal, including dealer fees, taxes, possible tax deductions, tax benefits, trade in, finance rates, incentives and rebates. Make sure you are getting all you are entitled to and ask for fees itemized so you understand what they are for.

Incentives are mandated behind-the-scenes by factory. Negotiate FIRST, then add in the cash rebates. 

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What to avoid when buying a car?

Additional stickers. These are usually for after factory options, which complicate the deal – avoid those at all cost. Don’t deal with them. Factory will set the sticker price, but the dealer will raise the costs. They will look like thin rectangle slips of paper next to the Monroney window sticker.

And just for the record, things like vin etching are not necessary. That is after market BS.

Questions to ask a car dealer

  1. After negotiating the final cost, make sure to ask, “We’ve agreed to this price, what additional fees are involved?”
  2. Find out additional things they are including in the Doc fees (Document Fees.) You cannot negotiate the individual fees, but you can possibly get the overall cost down. 
  3. Ask for the invoice. Ask them to email you an itemized worksheet with all the numbers and call Edmunds.com!  They are a neutral party and will go over piece by piece to make sure not only the numbers match up, but that you are not being taken.Trust me, it’s as though they are brokering the deal for you. 

What cannot be negotiated on a car deal?

Things that cannot be negotiated are: destination fees, taxes, and documentation fee (Check state by state. In California it is set, but Florida’s is uncontrolled.)

Hint: The Extended Warranty is highly negotiable.

Know your deal breakers

What are the non-negotiables? This is a HUGE financial investment and commitment. This is not the time to settle. Must you have a silver car? Do you need leather? I had to have leather, heated seats, a navigation system and moon roof. Sounds silly, but if the car did not have all of these items, I was not buying. There is no reason to settle in life. If you do, there’s no one to blame except yourself.

So you have a trade-in

Do NOT tell them about the trade-in until AFTER the deal has been negotiated. Trade-ins reduce the cap. Trade-ins that are valued more than the agreed down payment can be used as the actual down payment, and the remained of the money returned to you via check. It’s always better to attempt to sell the vehicle on your own, but some people just don’t have that luxury. We’ve been very pleased with our competitive offers from the dealership, and it was nice to have that extra cash since we had already negotiated the deal. 

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What if you have bad credit? What are your options?

So you are interested in buying a car with bad credit? Know your credit BEFORE you arrive at the car dealer. Do not pull your credit at a dealership until you have the deal you are comfortable with and are ready to purchase the vehicle that day. It’s OK to tell the dealer, “No, I’m not pulling my credit until I’m ready to sign. Please give me a figure based on a 650 (or whatever) score.” Brands like Kia, Toyota and Honda are not very easy to work with when you have poor credit, but don’t let that get you down — many car manufacturers will work with you within reason.

So what could be considered “bad credit” when buying a car?

BMW has a four credit tiers, but will finance over 574. Tiers 3 & 4 will require a 1.5%+ jump in your finance rate and/or an additional security deposit. (Don’t let this frighten you. A secret around this is by making higher monthly payments so you pay it off sooner at a lower rate.) You can also consider refinancing in the middle of the lease; however do not discuss this with the dealer. This is something to consider and revisit about a year into your lease.

What is your exit strategy?

People are drawn to car lots. Dealerships will work in teams, so be protective of your time. If they say, “Let me talk to my manager,” say, “I’m going to my car to make a phone call, get my notebook, grab my iPad…whatever.” I think of how many car dealers have lost our business over this exact car and just shake my head. You are looking for a Internet Sales Manager who shows you respect, appreciates your time and your budget. That type of person deserves your sale. 

“OK, I’m going to go call my contact at Edmunds.” Yes, you have a contact at Edmunds – you have a whole flipping’ team. Use them!

Look at the bigger picture: right price, good deal and peace of mind, definitely “cross shop” dealers. Always be ready to walk out. There is no reason to wait. No playing let’s crunch the numbers game. You know how long crunching the numbers takes? 10 – 15 minutes tops and they will never come to you with the best offer first. They will also have you drive the better car first, which only makes sense.

If your gut tells you to trust the dealer, and you are comfortable, the deal will go very smoothly.

So where did I end up getting my new car… and what did I get? Click here to find out!

CAR BUYING TIPS

Photo credits: Nicole Standley

Promotional consideration has been furnished by Edmunds.com. On occasion, contributors of The JetSet Family receive products, compensation and/or services gratis or at discounted rates. This practice does not hinder the influencer’s point of view. All descriptions are factual and accurately reflect the overall experience. This post may contain affiliate links.

Written by Nicole Standley

Nicole Standley

Nicole Standley curates her favorite trends in luxury travel, fine-dining, style + pop culture for The JetSet Family, CBS Los Angeles, Huffington Post and Hilton Hotels. In 2015, she was named Top Family Travel Blogger by both Trip Advisor + Red Tricycle. Instagram: nicoledstandley

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8 COMMENTS
  • Marysa December 22, 2014

    These are really great tips. Car buying is such an overwhelming experience. Thanks for the help.. and what a beautiful car in this blog post!

  • Travel Blogger December 22, 2014

    we are going to be buying a car very shortly, thanks, i can use this

  • J Merrill December 22, 2014

    Wow. This is the most concise and thorough information about how to buy a car I’ve ever seen. Lots of things that make sense, but wouldn’t have occurred to me. Thank you for this!

  • Kim Croisant December 22, 2014

    Wow – that gave me a headache!!! Not my favorite thing to do. I usually leave it up to my husband and he has dealt with a friend the last two times. Wow, however, he needs to read this!!!!

  • Mitch December 22, 2014

    This is a must read for everyone! I lease every three years and we negotiate for 5 hours it seems. Its all about the price for us! Just don’t go in uninformed!

  • Jeanette June 17, 2015

    These are some great tips! We will have to buy a new car next year (leased one). I will use this tips to help me with the deal next time!

  • Marjorie Baker November 23, 2015

    The article was good, hardly any secrets, just common sense, the only thing that bothers me is hiding your trade from the dealer, that is in affect lying, what if you owe money on this car, or it’s damaged, when saying you might trade in will get you the best price on trade, if you hide it until the deal is done, you will get far less trade value, and possibly a higher finance rate.
    . How do I now? 12 years as a finance manager and car sales person.

    tips to add, buy what you can afford, don’t go in looking for a Lexus if you make minimum wage, then try to grind down a dealer to your price.

    If you keep a vehicle beyond the warranty period consider buying the extended warranty, especially if you like GPS, DVD and all other tech options.

    last but not least, a nice customer with a sense of humor will get the best deal every time.

  • Rachel February 1, 2016

    What if your credit score is 300-500? What are the highest interest rates that are good considering the bad credit?

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