Buying a New Car — 6 Things To Remember
At the beginning of my Christmas vacation I got the bad hankering to buy a new car. It was prompted by the usual irrational reasons: I got raise, my current car’s battery just died, mine has high road-noise, etc. During my 4-day temporary insanity, I sat across from many salesmen and wrangled to the point of having a dry mouth several times. During these high-tension sessions, I learned many things about the car buying process.
Leave your checkbook at home
The car-buying process is never a one-day thing. Unless you are either desperate, a fool, or dominated by your impulses. There is no offer not worth sleeping on–ever. Ever ever. Do not let anything–even a broken car–motivate your buying process or you are doomed from the beginning. When you free yourself of this baggage, the car-purchasing process becomes relaxed and fun. Car salesman, like the bloodsharks they are, will pick up on these excited or desperate impulses and give you a good financial rogering. Say to yourself “I will sleep on any offer.”
Find a Favorite Car
When you find the car you really want, all other cars become the comparison. When one salesmen asks you why their price isn’t right, you say “because for only $400 more I can go down the street and get a…”. Make them work to make this your favorite. Meanwhile, make sure the dealership that has your favorite car is aware you are 1) motivated 2)serious 3)interested 4)looking elsewhere until their numbers are right.
Never give a budget
The first thing a salesman will try to do is get you to give your idea of “what you’re looking to pay” for this car. They are just trying to wrench you for a number. Don’t give it to them. In the car market, as well as many other markets, naming the price is the burden of the seller.
What price are you willing to pay for the car? The lowest price they are willing to move it off the lot for. Tell them this and watch the pain in their face. They will try to mask the question by asking you “what your budget is”. Kindly tell them that if the car wasn’t in your budget, you wouldn’t be looking at it.
Don’t waste your time hussling the first smiling-face
Typically, the first car-salesman you meet is not authorized to make really good deals, so don’t worry about talking him down. You do not need to hussle him. You do not need to charm him. He is a chauffeur, nothing more. Do not waste your energy trying to wrestle him down. If you play your cards right, you will go through 1 or even 2 levels of big-bossmen. These are “Sales Directors” and they have way more muscle when dealing with the the accountants (the little room the salesmen disappear to). Keep in mind, if you are at a smaller dealership this may not necessarily be true.
Do not mention a trade-in, student discounts, etc
Car salesman will always ask you about your trade-in early on because they know its one way to confuse your purchase. Don’t mention a trade-in until they are talking a number that is in your range. Trade-in price is always a fake number, anyway–there is a bottom line, and your job is to find it out.
Keep Yer Eye On The Bottom Line
This is the most important section, so its lengthy. Do not lose sight of the bottom line. A car-dealer will always want to talk about your “target monthly payment”, “trade-in value”, “leasing options”, or a financing deal. But they never want to talk about the bottom-line because that’s the only thing that matters and they know it. Dealers will quickly move away from discussion of lowering the bottom-line price and, like the common optical illusion, warp a square into a tall, thin rectangle and try to get you to believe its a different size. Its not. Once you lose sight of the bottom line you are doomed. You need to figure out what your budget is beforehand. If you haven’t done that, stop wasting your time and my bandwidth reading this (ok, well, the page already loaded, but don’t refresh!).
Edmunds Auto Loan Calculator is the best way to figure out what your bottom line is because it accounts for cash-back (which you pay tax on!). You do not sign a deal without plugging the numbers into this calculator. CAPICHE? Bring a notebook and a friend with you, and make them write down every number the dealer offers. You will find out interesting things when you plug them in.
Car dealer: “All you have to do to get your payment down to $275/month is to go with the 66 month lease instead of the 60.”
Logic: 6 more months of a loan * $275 = over $1,600 bucks!
Sure, its elementary math. But when you are sitting across the desk and the sweat is starting to pour, this is easy stuff to lose track of.
