Don’t Let Buying a Car Drive You Crazy

May 3, 2010

Money-Guy 04-30-2010

All of us at some point in our lives have bought, or are planning on buying, an automobile. For many, however, this is not a very pleasant experience. This comes as no surprise when, according to Forbes, “Of the top 10 industries that received the most consumer complaints last year, three were auto related”. It doesn’t have to be like this, though, and in today’s show we explain how to make the most of your car buying experience.

First, if you are planning on purchasing a new car, there are 4 very straight-forward steps you can take to “win the car-buying game”:

  1. Know what you want – Do your research and determine which car you want including which options are important to you. You can use  Consumer Reports and Edmunds to help with model specific research. Once you settle on a car, take a test drive, but promise yourself that once you test drive the vehicle YOU WON’T BUY THE CAR TODAY!
  2. Go to the manufacturer’s website and locate the exact cars you want – Find at least two cars but hopefully three to five.  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.
  3. Figure out what to pay – Start with CarsDirect to see what the MSRP and invoice prices are, including the options that you 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,  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).
  4. 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.

As you listen to the show, we also explain some of the common car dealer scams and tips to avoid them. Here is the full article from Forbes. Some of the scams we explain include:

  • The Ambush
  • The Confiscation
  • The Bum Rush
  • The Buried Bill
  • The Bait and Switch

If you enter into a car buying situation already knowing these scams, they become very obvious and easy to avoid.

To close out the show, we share an article from U.S. News explaining why now may or may not be a good time to start buying American. We explain our thoughts on this as well as some things you may want to think about.

FILED UNDER: Featured, Podcasts
TAGGED WITH: budgeting, frugality

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