Tag-team car shopping advice

By Mir
August 28, 2006

Today’s question comes from Laura:

Hello pretty Mir!

My husband and I are starting to look for a new (to us – we will
definitely be going the used route) car to fit our expanding family.
We have two large dogs (combined total weight: 200 pounds!) and a
baby on the way; our station wagon is just not going to cut it anymore.

Anyway, what are the tricks of the trade for car shopping? Are there
better times of the day/week/month/year to get the best deals? Do you
have any other inside tips?

Inside tips? Do I have inside tips? I have Otto! He once told me how many cars he’s owned throughout his lifetime, but I was laughing too hard to actually process the number. Otto knows a lot about cars. I know a few things, too… so perhaps together, we can give you some information to go on.

I forwarded your question to Otto for his take. His advice follows in bold, with my comments in interspersed.

A couple of thoughts on car shopping … buy a car when you want to, never when you need to. You have to be able to walk away from any deal. Don’t ever “fall in love” with a car (at least until you have the title in hand and know it’s working). With a few notable exceptions, there are always more examples of a particular model out there, somewhere, in the color you have to have and the options you absolutely need.

Agreed.

Get the car checked out by YOUR mechanic. It doesn’t matter how much of a car guy you think you are, you’re going to be inspecting a car which, at that point, you’re seriously considering — you WANT it to look good so you may miss things. Your mechanic will be far more dispassionate. (Of course, if you have a sleazy mechanic, they may tell you it’s fine knowing you’ll be spending thousands of dollars with them in a few months … as with everything else, building a relationship with a good shop pays for itself, even if they’re a little more expensive.)

This is a bit heavy on the Gospel of the Good Mechanic, but also true.

Dealerships are busier on the weekends, so try to go in mid-week when it’s slower. Don’t assume all the sales folks are out to rip you off, but if you get one who can’t answer technical questions, ask for someone who knows the cars. You want to buy a car from a Car Guy, not a Sales Guy. Research the car your looking at, know the possible options and ask technical questions. (I like to ask them about differentials — open, mechanical limited slip, viscous coupling limited slip.) (But I always know the answer to that question because, well, I’m a Car Guy.)

This doesn’t address buying a car that someone is selling independently. My advice is to consider what’s going to be more important to you: Getting the lowest possible price, or getting a pretty good price and good customer service. Buying independently will almost always be cheaper, but carries a higher risk and ends with the money changing hands. Buying from a dealership can be a greater overall value once you figure in any added freebies (ooh! floormats!) and future service discounts.

Lastly, during negotiations, NEVER make an offer. Never tell them what you want for your trade, never tell them what you want your monthly payment to be. “I’m interested in the car, what can you do for me?” Let them make the first offer, that’s your ceiling. Go in knowing what your car is worth and what their car is worth — let them get to that point. Give them your phone number, if they don’t get to the numbers you want, leave. If they can get there, they’ll call you back.

Otto is being a bit hard-nosed here. My approach is different, because I hate getting stuck in the neverending circle of hell that is saying “What can you do for me?” while the salesman responds “Well what do you think you can pay?” If I’m ready to make an offer on a car, I already know how much my trade-in is worth (if I have one) and what the book value of the car I want is.* I do my calculations based on that, and name a number which is $500 less than I’m willing to pay**, because some salespeople simply don’t know how to sell a car without haggling back and forth a couple of times. It keeps them busy. The bottom line, however, is to know your maximum and, as Otto says, walk away if they can’t get there.

Talk with your bank and credit union about loan rates for the car you’re looking at. Sometimes your bank will have a better rate, sometimes not — you’ll never know if you don’t ask.

Do check out the options for financing before you buy, absolutely. Because I’m me, I’ll also add here that the best way to buy a car is in cash, if you can manage it. However, that’s the best way for you, not the best way for the dealership. And it’s a sad but true fact that you will get a slightly better deal if you finance through them. So even if you plan to pay with cash? Tell them you’re interested in financing. Unless the rate is ridiculously bad, as long as there’s no early-payment penalty, take their financing. Then pay it off the first month. It ends up costing you a few bucks and probably saved you several hundred dollars on the car itself, because the dealership gets a commission on your loan.

* How do you know the value of your trade-in and the car you want? Visit the NADA Guide and Kelley Blue Book sites before you shop. In this day and age, there is no excuse for not knowing exactly what you want costs; it’s all available right at your keyboard.

** How do you decide what to pay? The $500 wiggle room I mention serves a dual purpose: it gives some space for negotiation—because the back-and-forth is an integral part of the dance for most car salesman—and it’s about the maximum profit a salesguy expects to make on a typical car sale. (This obviously doesn’t apply for beaters or Porsches. I’m talking mid-range sales.) Also, I love the look on a salesman’s face when I go all wide-eyed and offer him exactly what the car is worth as if I’m being quite magnaminous. By the time he’s “argued” you up, he feels victorious and you’ve reached the figure you were aiming for, anyway. You don’t have to use my numbers, just be aware of the set points (no dealer is going to sell you a car at a $20 profit) and your own budget before you start negotiations.

Thanks for your help, Otto! Laura, happy carhunting!

11 Comments

  1. My dad did this thing a few years ago. He knew the car he wanted (that had to be ordered at the time) and all of the options. He did his research about what the car should cost and wrote letters to all of the local dealerships stating exactly what he wanted and how much he was willing to pay. The letter ended with a basic “if you can do this, call me.”

    He got a call and went to the dealership to talk to them about it. Of course, they jacked up the price once he got there and then my dad left all irritated. He called the owner of the company – a big wig in our area; I’m still not sure how my dad got him on the phone – and told Big Wig that he was employing a bunch of liars and would be telling everyone he knew just that very fact.

    Ten minutes later, he got a call from the manager at Big Wig Dealership. He was going to get his car at the price he wanted. Which was $5 less than what the dealership was paying for it.

    The moral of the story: The dealers will lie to you to get you in the door. Don’t take it because you listened to Mir and Otto and are buying a car because you want it, not because you need it.

  2. All good advice. I would also add that if you go to the dealership later in the evening you can get money knocked off because the salesman wants to go home. I did that on my last car. I test drove it for a LONG time (without salesman–which is also nice if they’ll let you) then only got to talking numbers close the closing time. The manager was gone by this point, and the sales guy gave me almost everything I asked for because he really wanted to go home really badly!

  3. My big hint, TAKE YOUR KIDS WITH YOU, hell, even take a few kids that aren’t yours. Sales guys HATE when you bring in a bunch of kids that will get totally bored with being in a tiny little glass cubicle in about,ohhhhh, 2 minutes. My least favorite part about car shopping is the 4 hours they make you sit in that little tiny office while they go “talk to their manager” about every little detail. When you stick them in that office with 2-4 very hungry, whiny, bored children, it is amazing how quickly they wrap things up.

  4. As someone who has done this too many times, my personal advice is two things. I’m upfront with the sales guy. I tell him, when it is time to talk numbers, “You have one chance, give me your best price.” I’ve seen them come back ready to do the dance. I stand up and walk. Without fail they chase me down in the parking lot. I often tell them, “I didn’t lie. You had one chance. You blew it by telling me you can beat what was supposed to be your best offer. If you want to save this, then go back, you have 2 minutes (I often time them), and bring me what is REALLY your best offer.” If I still don’t like the price, I walk. There are too many dealers that all sell essenially the same car not to walk. I’ve been called on the phone more times than I can count saving me thousands, just because I walked.
    Second note, check online for the car you want. Now, I buy new (someone bring Mir the smelling salts). I’m ok with it and save up to do it in cash. So, I check every dealer in my area for the car I’m looking for. Then I shop the dealer I want to do business with the most — honesty counts. Then I ask THAT dealer to get THIS car for me. I’ve moved cars around in order to do that — and I’ve gotten what I want for the price I want.
    (Oh, and I find tight, low-cut shirts and asking about differentials will get you a good deal too. It is like they don’t see the chick with car knowledge coming. Learn some basic vocab and smile and ask questions you know what the answer is.)

  5. Patricia is my hero!

  6. I’ve found that asking to see the papers detailing how much the dealership paid to get a vehicle on their lot works wonders in the negotiation department. I usually offer $1000 more than they paid for it. Usually the salespeople keep going back and forth between you and their manager and coming back with a better and better offer until they finally give in and show you the papers. It takes a bit of time to go through this process, but I think if you also used Jen’s advice and brought your kids with you, it would speed the process up quite a bit!

  7. Or just forget the dance and buy a Saturn.

    No, I don’t work for them–I am just a very happy customer. The cars are good, but the real plus is the customer service–at least in my area. The hype is real.

  8. I’ve used the Motley Fool’s method (http://www.fool.com/car/car12.htm ) on four occasions now. Works like a champ. It’s even better if you sign up for Maxemail (http://www.maxemail.com) so you can fax for super cheap, without ever printing a thing.

    The best thing about it is not spending time at the dealership, where they’ve got home field advantage in a major way. You’re dealing with the fleet sales guy, so he only expects to make a few hundred on a vehicle, instead focusing on doing a lot of deals very quickly. They tend to be low pressure. Make it REAL clear that you want the drive out price, and that you won’t be taking a lot of guff from the “finance guy” (aka The Biggest Sleazeball Outside the Porn Industry). Be willing to walk if the finance guy pulls out the box of screws and a power screwdriver to use on you.

  9. P.S. on my previous comment. It works on used vehicles too. Find out what year, model, trim level you want, along with the maximum allowable mileage and your preferred colors. Specify those items in your fax. You’ll net a few more calls offering trim level X instead of the Y you requested. Just politely decline if it’s not what you want.

  10. Not so much about the negotiating aspect, but a great way to start shopping is to visit the lots on a Sunday (when most of dealerships are closed) and use your digital camera to take pictures of cars that you’re interested in, along with photos of the window sticker that lists the features and the asking price. I did this when I purchased my last car. Since I was pre-approved for my loan through my credit union, I knew how high I could afford to go and I only let myself look at vehicles in the ballpark of that number. Once I narrowed my selections to three, I thoroughly researched those vehicles and ended up going into the dealership much more confident about what I wanted and what I was willing to pay for it.

  11. When purchasing a “previously owned” vehicle, I always (and I mean ALWAYS) tell people to get a Carfax report on the vehicle. If you are buying from a dealer, ask THEM to provide the carfax report. (Larger dealers will often do this for free, as they have some sort of deal with Carfax, but smaller dealers may not).

    The $20 that it costs (or spend $24 if you think you may need to shop around – the $24 option gives you a month of unlimited car checks), is more than worth it. Unless you are perfectly willing to buy a car that looks good on the outside but is actually a water damaged car salvaged from New Orleans after Katrina.

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