While not great investments, cars are important purchases for most of us.
Beyond how we feel driving them, they’re expensive to buy, own, and operate.
Fortunately, smart buyers can get an edge by doing their homework, collecting the right data, and having a negotiating strategy. Being smart definitely pays off!
4 Steps to Winning the New Car Game
- Know what car you want first. Do your research and determine which car you want including which options are important to you. Help on model research can be obtained from Consumer Reports and Edmunds. Once you settle on a car, take a test drive, but promise yourself that once you test drive the vehicle you won’t go inside and begin negotiations (that’s what the dealer is counting on).
- Go to the manufacturer’s website (Honda, Ford, Toyota, etc.) and locate the exact cars you want. Find at least two cars but hopefully three to five. HINT: On most car websites they want you to input your zipcode so they can refer you to the closest dealer. This zipcode also limits what car inventory shows up on the internet. Find all the dealers within 30-60 miles of your house and use Yahoo or Google to determine their zipcodes. By using each dealer’s zipcode, you can see what they have on their lot. Most manufacturers have their inventory listed including Honda, Toyota, and General Motors.
- Figure out what to pay. I always start with CarsDirect to see what the MSRP and invoice prices are, including the options that I consider must-haves. The site will also provide you with a tentative price that a dealer is willing to sell at through the internet. Next, I always go to Edmunds and click the “Forums” button on the top of the page. From the “Forums” main page you can browse discussion by vehicle by first choosing the manufacturer, then the model, and finally choosing the discussion topic titled “Prices and Buying Experience”. From here there will be hundreds of postings from all over listing your model of car and what others have paid (this is valuable information because you are seeing what others in your area are paying for the cars).
- Now that you are loaded up with the research and pricing information, call the dealership directly and ask to speak with the sales manager. Let whomever answers the phone know that they have the car you want on their lot and that you are ready to buy. Also tell them that you need rock bottom price because you have located 2-3 other cars of the exact same model at other dealerships and you are showing up with a check to whichever dealership has the best price.
Used Car Research Tools:
- Autotrader: Find used cars in your area that are for sale by individuals and dealers
- Kelley Blue Book: Evaluate what your current car is worth and what you should pay for the car you’re researching
- Edmunds: Provides true market value (what others are actually paying for new and used cars in your area) as well as other general research information
- Avoid negotiating with the dealership on site. You will have much more leverage on the phone than you will on their sales floor.
- Never discuss whether or not you want to trade in your existing car until after you have reached a deal on the new car. Likewise, separate your possible need to finance a loan from the car’s actual purchase. They’re different transactions and shouldn’t be rolled together unless the numbers work for you.
- Research, research, and more research! You need to know more about the car than the guy selling it.