A few weeks ago we got the dreaded phone call that a head gasket had blown in our van. We decided it was time to purchase a new van instead of spending $2,300 to repair an eight year old van worth $4,000. The next day, we decided to start shopping. My husband’s theory was to go to the dealership & ask them what their best price was. We would then shop around & purchase the van from whatever dealer would give us the best price.
We drove to the dealer, test drove a van, & sat down to negotiate the price. My husband asked what their best price was, and after the salesman “checked with his manager” came back to tell us he couldn’t give us a price. His explanation was that if they gave us a price & then we went down the road to the next dealership that they would just beat it by $100 & we would get the car from them. Instead of being the first price we got, they wanted to be the last, so they could give us the best deal & we would buy from them.
While this made sense, it left us frustrated. My husband came home & spent several hours researching how the car industry works so he could get us the best deal possible.
Here are some tips for buying a new car, as well as some things we learned along the way:
1. Choose a car. What type of car do you want? What features are you looking for? Make a list of your “must haves” & then do a search for the “best” car in that category. We wanted a safe van that could seat eight & had two power sliding doors that would hopefully last a long time. Over & over again in our searches, the Toyota Sienna seemed to be the best van to meet our needs.
2. Once you know what model you want, check prices online. Many dealerships list the MSRP, as well as lower online prices. Check out local dealerships online to see their prices, as well as the fair purchase price on Kelley Blue Book’s website. You may even want to print out some of these prices for proof!
3. Learn the value of your trade-in. If you will be trading a vehicle in, check out an estimate of it’s worth at Kelley Blue Book.
4. Consider getting a loan through your bank. Some of our research hinted that when you finance through a dealer, you sometimes pay more than you think you are for a car. Okay, that sounds confusing. Let me explain…When we bought our van eight years ago, we financed through the dealer. We got a great interest rate & negotiated a price of $22,000 after taxes, title, & registration. Mark & I were 100% positive we paid $22,000 for that van. Then the salesmen asked us what we wanted our monthly payments to be. (I can’t remember what they were, but we settled on a seven year loan to keep our payments down. Not to worry, we paid the van off in two years!) Again, Mark & I were positive we paid $22,000 for that van.
Once the van was paid off & we got the title, we quickly filed it away without a second glance until the day we were going to trade it in. I looked at the title & low & behold the purchase price listed on the title (NOT including taxes & title) was $27,905! WHAT? That, my friends is what happens when you negotiate monthly payments without checking the salesman’s math! We got who-dood out of nearly $6,000!
This time around, we secured our financing through the bank. (Be sure to shop around for the best interest rate.) In general, the dealerships usually have better interest rates than banks, but we weren’t willing to be fooled a second time around! It saved us a lot of time at the dealership too!
5. Bring a calculator! If you plan on financing through the dealership, bring a calculator or use a payment calculator like this one. This way, you will know if the monthly payments the dealer gives you align with what they should be in reality! I would hate for you to get scammed too!
6. Be careful what you say! I’m not sure if this is true or not, but this article written by an undercover journalist suggests that there is a device on the phones in the showroom that can allow the salesmen to listen in on your conversations while they are away discussing things with their manager. Even if it’s not true, the less you say, the better! (But if it is true, I would definitely suggest some interesting conversations while the salesman is away… “Shew, I am having some bad gas today!)
7. September through December are the best months to buy a new car according to Street Smart Car Deals. During this time, dealers are trying to clear their lots of the old models to make room for the new year’s model. This site also says no matter what month you go, the last week of the month seems to be the best time, since one more sale could reap the salesman a nice bonus.
Lucky for us, dealers are making room for the 2013 models, so we were able to purchase a new 2012 model for a great price.
8. Consider negotiating the price online. Once we had done our research, we ended up getting quotes online. We then called the dealer that gave us the best quote & gave him our “top dollar” & asked if he could find us something that met our needs for that price. To be honest, our top dollar was pretty low, so we ended up having to pay $500 more. We called back that first salesman we had gone to (the one that didn’t give us a price) & asked if he could beat it. We knew we must be getting a good deal when he called back to say he couldn’t beat it!
Once we got to the dealer, we went for a quick test drive, signed some paperwork, & left in our shiny new van! Much less stressful than our previous van’s purchase.
9. Here are some more great resources for buying a new car:
Confessions Of a Car Salesman. It’s an article written by a journalist that went undercover as a car salesman. It is pretty eye opening & reads like a novel! Mark & I never finished it, but it was so juicy we still plan on reading the rest of it even though we already bought a car!
That pretty much sums up our car buying experience. Hopefully we won’t have another one for a very long time! In my opinion, buying a car is worse than getting a tooth pulled! So, did I leave anything out? Do you have any great tips for buying a new car? Did you learn anything new? I’d love to hear your thoughts!