“How to…”: Buy A Car
Step 1: Find a car that you like
“Step number one is finding a car that you like. Try to do that away from the distractions and the pressures of the dealership. Do that at home. Go to web sites like Cars.com, Edmunds.com, Consumer Report, things like that. Narrow it down so that once you get to the dealership you know what you want and you can proceed to the next step, which is…”
Step 2: Go at the end of the month
“Before you even arrive at the dealership, make sure that you get to the dealership on a day when the traffic is slower. Maybe towards the end of the month or on a rainy day. Basically, when traffic is slow you’ll get better service and they’ll be more motivated to give you a better deal.
Step 3: Negotiating a price
“Now, you’ve got to negotiate a price. The first thing to keep in mind is to avoid focusing on monthly payments and worry more about the bottom-line on the total price. If you focus on the monthly payments too much, which is what the dealer will want to do, it will be too easy for them to sneak in an add-ons that you don’t want. So, bottom-line, price first. *Negotiating Tip: Have the invoice price handy.* So, about that price: basically, you want to have as your starting point the dealer’s invoice price or their cost. And then you want to negotiate from that point upwards versus from sticker downwards. *Negotiating Tip: Ask about rebates.* Now, don’t forget to have the dealer factor in any and all rebates that apply to you. So far, the dealer hasn’t done anything for you yet, it’s the manufacturers. So, let them be aware of that. After the rebates are factored in, say, “Hey, what can you do for me?” *Negotiating Tip: Doc fees and add-ons.* The last thing about the price is fees and add-ons. The two biggest things are the destination charge and the doc fee. Destination charge applies to newer cars; it should be around 500 dollars or so. Doc fee, that varies from dealership to dealership. Make sure that, at the very least, the dealer’s not overcharging you for that fee. If other dealers are charging 400 dollars, make sure they’re not charging you 900 dollars. *Negotiating Tip: Add ons???* What about things like rust-proofing and scotch-guarding, and other protection packages. Stay away from those. Number one, dealers are overcharging you for those things and they generally don’t add value to your vehicle. The last one is vehicle theft recovery. Stay away from that and make sure they don’t add it on to the document at the very end.”
Step 4: Financing
“And the last part is, the time to make a purchase, getting financing. If you can, try to get preapproved before you get to the dealership. That way you may get a better rate than what the dealer can offer you. You can also remove that from the negotiating power of the dealer. So have that settled before you get to the dealership, if you can.”
Recap:
Step 1: Find a car that you like.
Step 2: Go at the end of the month: try to visit toward the end of the month or when it’s slower.
Step 3: Negotiating a price: negotiate, never pay sticker, and start at invoice and up.
Step 4: Financing: make sure you can get financed; try to do that before you get to the dealership.
