Commenter Keter posted a completely kick-ass 13 step guide to buying a car while maintaining total and absolute control over the sales process. It was so good we’re lifting it and posting it to the front page.
1. Pick the exact make and model of car you want.
2. Call around first anonymously (such as calling from work on your lunch hour), and get prices. Tell them you are calling everybody, and the best deal wins. Write down the prices you are given, and note any difference in packages.
3. Pick the dealership you think you want to do business with based on the results of this phone call. Price should not be the decider — demeanor and gut feel should be….
4. Go to the dealership you absolutely NEVER want to do business with. Nail down the details on the options — go for “loaded,” then whittle it down to find the approximate prices for each option. Make a detailed list with prices. Mark the options you must have and those can do without.
5. Do your research online and compare your pricing research with others and experts. Set an “ideal price” and an “I can live with it” price for the car you want with all the options you want, and again for the car you want with the minimum options you want. You now have a low and high figure for the car.
6. Go get cash or a a pre-approved car loan for something less than the upper amount. Put the cash or check in a blank sealed envelope. Find out ahead of time how to deal with the pre-approved loan if the negotiated amount is less than the amount on the bank check. You do not want to have to leave the dealership to get a new check for a smaller amount, so try to arrange something in advance for this contingency.
7. Call your insurance carrier and tell them you are buying a new car. Do as much of the paperwork ahead of time as possible and determine the hours they can service you so you can avoid delays or surprises at delivery time. (Any delays benefit the dealer.)
8. Go to the dealer you want to deal with — on a weekday, in the morning. Get dropped off or, ideally, have a friend or significant other go with you. (It always helps to have a witness.) Bring a sack lunch and drinks with you. You’re not leaving or letting your attention wander until you have a car.
9. Find the exact car you want. Use your list…this shows you’ve done your homework. Don’t be surprised if your salesman suddenly has to handle an emergency and hands you off to someone else. This is a good sign that you have the upper hand already.
10. Show them the envelope. Tell them you have cash/a pre-approved loan check, and three chances to get it from you if you can drive out by an exact time (by 3 PM is usually good), all paperwork done, taxes paid, and every other fee under the sun taken care of for less than the amount in the envelope. Do not give any hints about the amount, make them name heir price. If it’s way out of sight, don’t say anything. Just laugh and head for the door. They’ll chase you down and give you a much better number. If they don’t, go elsewhere.
11. Read everything. Twice. Have your friend do the same. Line out anything you don’t agree to or doesn’t apply, initial and date this and have the dealer rep do the same. Do not leave any blank spaces. Count the papers and make sure you get copies of all of them. Ask if there are any programs you need to opt out of to avoid being automatically signed up for them. Do whatever is required to opt out.
12. If at any time they give you attitude or BS, walk out. They will chase you down. Tell them they have only one chance left because they gave you attitude. Now they will deal. If they don’t, go elsewhere.
13. Try another city if yours is full of slime balls.
Good luck. I don’t buy new, but I helped friends buy using this technique, and it really works…but it works only if you truly are willing to walk away…and then refuse to bend when they try to put you off or change the terms. Stay civil, do not let any emotion in. You are on a mission, Marine!
The same technique works for buying a used car, but tell them that you will not talk price until YOUR mechanic looks over the vehicle and gives you a report on it. Watch how much the squirm. I also learned the basics of car inspection, and perform my own pre-inspections right there on the lot — 90% of used cars have a defect so serious they don’t pass 5 minutes of my inspection! The best one (if any) goes to the mechanic.
Have the mechanic lined up for the time you will be needing the car checked out. I prefer to have my mechanic pick up the car from the dealer directly. The mechanic should be one you have had good experiences with previously. NEVER use a mechanic who is near the dealership. I tell my mechanic “check this car like you would if your 16 year old daughter was going to have to drive it to Alaska and back — alone.”
Go back to the dealer with a list of all defects and an estimate to fix them. Negotiate a price adjustment. In some cases, you may agree to let the dealer do the repairs, BUT specifically put in writing that these repairs will be accepted only after a re-inspection by your mechanic and no crappy used or after-market parts will be used.
Figure on devoting at least a month and looking at 200+ cars to find a good used car.
I’ve bought three truly excellent used cars this way — all for less than $5000 — all required minor repairs prior to delivery, and all lasted more than 100K miles with minimal repair costs afterward.
- Keter
Arm yourself with the knowledge in these related posts:
The Art of The Buy: Hide Your Time Wisely
The Truth About “Factory Invoice” Car Prices
HOW TO: Buy A Car Without Putting A Shotgun In Your Mouth
Dealerships Rip You Off With The “Four-Square,” Here’s How To Beat It
3 Confessions From A Former Used Car Salesman
Confessions of a Car Salesman
Now This Is A Car Salesman
How To Kick A Scammy Car Dealer In The Nuts
(Photo: Getty)
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For a new car, I used the non-profit CarBargains.org. For $190 they did the negotiation and got several dealers to agree in writing to a price $X above or below invoice. They send you a copy of the invoice prices with all of the possible options. You call the dealer, pick out which vehicle with the options that you want, and you know the price.
In my case the dealer had to get the vehicle from another dealer because I did not want the decked out display model. At the time this model was in short supply and relatively high demand.
After weeks of fruitless negotiation emailing, talking to the “fleet” sales, faxing everyone, and executing all kinds of the other suggestions, the Carbargains price was $1,200 less than the best price I could secure.
When the dealer tried to add on “Security window etching” for $250 I noticed right away that the price was wrong, searched through the numbers and had this bogus charge removed.
Going into a dealership with cash doesn’t give you the upper hand. Most dealers are looking for someone to give a loan to because they get a kickback from the bank for bringing in a new customer. When looking for lenders, most car salesmen generate a report that shows how much of a kickback they get from each lender, then they go with the lender that gives them the largest kickback rather than the lender that will give you, the customer, the best interest rate.
Also, consider buying from your credit union’s auto sales program. They are non-profit, and deal with the dealerships for you. I traded two cars for one new one last year — took about 4 faxes and an hour at the credit union for paperwork. I got a much better price than the dealership offered, and didn’t have to play the game.
I enjoy negotiating with dealerships though. I go late at night. I change my mind a lot. If they raise the price, I start asking for kooky stuff like special car mats, racing team jackets….hey it’s amusing and this is the one time in your whole life where you are utterly in control. What are they going to do, throw you out? Not likely. I actually made the weekly sales meeting one time — which means I was the worst deal they made that week!
What if I just want a red car? Is that specific enough?
The only thing different about buying a used car is that you should ALWAYS ask to have it reviewed by a mechanic you trust. Of course that sounds silly as who has a mechanic they trust, but most service places aren’t looking to screw you on that deal because unless you are a moron you won’t be heading there in 6 months if something breaks.
As far as new cars, just offer a price you are willing to pay and be done with it. Don’t bother going anywhere until you are ready to buy the car, unless you are interested in the entire game process. I played the game in one dealer last year just because I was indeed bored on a Saturday morning. It was perfect and in the end I had plenty of free entertainment… can’t beat that.
That kind of stupidity would get you kicked out of my dealership before you got half way through the steps.How about a 3 step process
1)do your research
2)offer some kind of profit
3)don’t be an a-hole and treat the salespeople like you would like to be treated and you may get what you want.
One of the things I did when I bought my truck was to go to an online site and print out the price. I told them if they could match it or get close I would buy it from them. I then pulled out a stop watch and gave them 10 minutes. I walked out of one dealership, when they violated it. Everytime the sales person needed ‘to talk to his manager’ there was a 2-min limit. They hated me, but I got my price.
Re #2–don’t call around–send a request to a dealer online with the exact specs of the car you want (down to every last detail). Most manufacturers will send your request to several dealers that you can select from their website. Insist that you be emailed a quote back, and verify the amount of time the price is good for (although most places will state that when they send a quote because they say something like 5 days because they want you to buy asap). Tell them you don’t have a phone, you don’t want to talk to them, whatever–just get it by email. Then, when you make your decision, let the dealer know when you’ll be coming by for pickup and bring a printout of the email with you. You’ve got it in writing, and if you get a mouthful, you can just bring it out and threaten them with a suit of false advertising (misinformation?) if they don’t abide by the quote. Power to the people!
As an Internet Sales Manager for a Luxury dealership, I can say this information is way outdated. Most dealerships have internet departments and as mentioned previously, the internet salespeople work off bulk and volume as opposed to squeezing money of each individual consumer. So just email them and get the best quote. Use edmunds True Market Value as a guide and be aware of any factory to dealership incentives (avail on edmunds.com) as use them to your advantage. Completely stress free and much less time consuming. Many floor salespeople will straight up hang up if you ask them for pricing over the phone, I’ve seen it happen time and time again as they work off of commission and will not sacrifice their pay to work for free.
Only deal with internet depts unless you enjoy getting into fights, wasting time, and adding stress to your life.
Sounds like a lot of trouble to go through to accomplish something simple. If you do a little on-line research and call your bank to get their interest rates, you will be ready to negotiate your deal. Offer the dealer a little profit. If you have a trade, check the wholesale value range on-line. Don’t go in with an attitude and I bet you’ll have a good experience with out a massive investment in time. Realize that we do this every day (Yeah, I sell cars) and you do this every few years.
Ummmm… I can’t believe that this was only mentioned in passing by one commenter.
Buy a Saturn. The no haggle policy is great, you look up the price on the web, and that is the price you pay and everyone else pays for that car.
When I bought my first Saturn in 1995, I heard all of the comments from the “I bought a Neon and the dealer had to give it to me for below invoice and you’re a sucker for paying GM 12% profit” crowd, and my response was always (1) you got a Neon and I got a Saturn, and (2) I was in and out of the Saturn dealer in about 10 minutes with the car I wanted, with the options I wanted, for the price I had known I would pay months before I bought the car. That car lasted me 150,000 miles and 8 years with only minor mechanical problems before I traded it in on my second Saturn, which took about 10 minutes to buy, was the price I knew I would pay… you get the picture.
Until other car companies adopt the no haggle policy, I’ll keep buying Saturns.
@12monkeys: HA! That’s rich. “Don’t be an a-hole and treat the salespeople like you would like to be treated.” With the car salespeople I’ve dealt with that “don’t be an a-hole” rule is pretty much a one-way street benefiting the salesman. Where are all the salesmen that treat their customers how they’d like to be treated?
Very complicated and seems to be written for someone who would be intimidated by a dealer, no matter how prepared.
For those, there is really nothing you can do other than get someone who is not easily intimidated or confused over buying a car.
I used the internet fleet managers at San Luis Obispo Nissan and Santa Barbara Nissan. SLO played games and wouldn’t lock down a price unless I came in. SBN gave a great price on the exact options I wanted.
It wasn’t until SLO Nissan about the deal I am taking with SB Nissan before they came out with a price slightly lower… like $100. That wasn’t enough to overcome my suspicion that they were scammers.
My truck was brought up the next day after I gave a verbal agreement to buy, it was exactly what I wanted, I was not pressured to buy anything as they knew I was going to write a check. They diddn’t even run a credit check. I arrived about 6:30PM and was out of the dealer at 8PM.
All I did was tell the two dealers what I wanted and the price I thought was fair. No games, no hassles and no drama.
Now that is the simple way to buy a car.
@Johann: Most car salesmen are quite good at reading their clients..thats how we make our living. Folks that approach a sales person with an attitude usually get that attitude returned to them in some form or another. If you approach a major purchase unprepared and use all the “techniques” found in the many “how to buy a car” books and web sites, you will get the experience you deserve. If you follow 12monkeys’ three steps you will get the right deal quickly without all the hassle.
Pffft. Way way way way way too complicated. Know what you want and what you are willing to pay, test drive before you buy, find a dealership where the people treat you with respect, don’t play games or take an adversarial attitude but be willing to walk away at any time, make deal, sign papers, drive off in new car, DONE. The idea of spending an entire day — a WEEKDAY at that — at the dealership is patently ridiculous.
My best advice, other than going through the internet sales manager, is wait til the end of the model year or calendar year if possible — I was able to get a much lower interest rate than I would have otherwise thanks to an end-of-year promotion. An appreciation for the humorous/absurd also helps… I have had few experiences more amusing than watching the finance guy get more and more visibly flustered as he realized that I wasn’t the pushover he thought I was.
The last time I enquired about a price for a particular new car, the salesman said, $32,990, driveaway.” I said, “Well, how much if I leave it in the showroom?” Sarcasm is delicious!!
…or you could just buy a new honda and keep it for 20 years like i’ll probably do. i have a 91 honda accord with 223k miles on it and it just keeps going. Or you could do as this guy does and buy used cars, spending maybe hundreds of hours looking for the “right” vehicle.
Why not instead, get online, find the car you want, print out the specs you want and the price you want.Take it to the dealer and say I want this. If you can’t give it to me at that price, i’ll go elsewhere. no haggle, and relatively no time spent in the presence of slime balls.
I can knock this down to 2 steps.
One: Find the car you want. (Shop within the first 10 days of the month, a salesman told me it’s always slowest on those days)
Two: Refuse to purchase the car that day.
This is how I bought my last car. I wasn’t planning on buying a car, but the salesman showed me a great one, just exactly the make and model I wanted (not the color, but that was just cosmetic). They were asking $2500 more than I would pay no matter what. I had told him from the start I wasn’t going to buy a car that day and I didn’t waiver until they dropped the price by over $3500. And trust me, the original price of the car was well worth what they were asking.
Just don’t waiver no matter how much you like the car. They tried the “this car won’t be here when you come back” line on me and I said “There’s millions of cars, they’ll be another”…stay cool, they are working you, work them back.
Oh and if you can pay cash (I could and did) don’t tell them directly but hint at it. Something like “I wonder if it’d be better to finance or pay cash”. They love cash.
AAA (Auto Club) has a fleet pricing program. Call or go online to your local AAA club–you do need to be a AAA member, of course–and you will get the best fleet price from dealers vetted by AAA national. When you get to the dealership, you’ll deal with the fleet manager, not the regular sales guy. No haggling, no multiple anonymous phone calls, no secret sealed envelopes. I’ve bought three new cars this way.
If you have the time dealing with the dealership yourself is the best way of getting a great deal…I purchased an 07 Lexus IS250 with MSRP of $38600 for a little under $31,000 including every possible option…navigation etc…..
The key is to call the dealerships fleet sales manager and deal through them over the phone, this person is payed a flat salary not a commission like salesmen…therefore he has nothing to loose for giving you the best deal you can possibly get…be nice too…being an A-hole never gets anyone anywhere…their doing their job..let them know youve researched ahead of time that way they cant attempt to pull tricks on you…and finally before going through with the haggling…go to online forums….edmunds.com etc….and see what other people in the area are paying for that particular car so you dont seem like an idiot low balling the dealer and so you dont get screwed over recieving the best possible deal..
or you could just ride a bike.
Great article.
And I find all the critical comments above amusing.
“WAAAAAY to complicated! Here’s what *I* do…”
Every one of these 13 suggestions could be the perfect technique in a different situation.
But everyone who ever got a dealer to come down a few Ks is the negotiating king, and has no need to learn from anyone.
A few thins I have to add:
I bought a 2006 Mazda3 Sport s Grand Touring late May last year at a very good price.
What I did was call each dealer in my area and asked for their base model price and then the full package. Then I walked into each dealer picking my car and getting the price. I told the sales person at the end of the conversation that I have to talk it over with my brother (who is co-signing it).
Another thing, tell them in the beginning to price the car with no down payment and tell them that you will choose the car depending on the price you are approved for.
So I had the work order sheet of the car and all the things I wanted on it and had him sign next to the price with his supervisor. I then went to the other dealers and did the same and showing them the price sheet from the first dealer. So I had them compete against each other, this is the best thing cuz they want to make the sale and not the other guy.
So when I finally got the lowest price for what I wanted I went to that dealer and talked finance with them. First thing to ask, are there any discounts on the car for memberships. They will usually have a promotion going at the time. For me it was Costo and Earnhardt Ford membership.
The cost of my car was ~$22,500. I then talked to the finance manager to get me approved for the car. We talked with no down payment and the membership discounts.
With my membership I got $1000 for the Earnhardt Ford membership and with the Costo I got +$250 of the manufacture listing price with was $2500 less than what was on the floor.
So I was able to get the car that was priced at $22,500 to 19,000. That was a lot saved there.
So not on the loan. When talking with the finance guy we worked on the numbers and I got my car approved for $400/month for the car at a 9.1% APR since it was my first car.
When I was ready to sign for the car I called my bro and made small talk. After getting off the phone I told him that we had some money for a down payment and so they wokred that in the price. I had $6000 saved up so I put that down for the car paying off the tax first. This is VERY important. If you do not the total price when you pay off your car will be higher than what you planned, sometimes nearly $5000 extra.
I got my car out of the door for only $19000 with $6000 down payment so all I have from the loan to pay is $15000 at $315/month at 9.1% APR.
So remember have the dealers compete against each other, they will drop their price as much as possible to get the sale. Also alway buy your car at the end of the month, they will be desperate to sell a car to make their monthly quota.
anyone else than me hate the guy on the story picture? cross between a meth addict and door-to-door vacuum salesman. heebie jeebies.
In car buying, it is important to focus on BOTH bottom line AND monthly payment. Of course the monthly payment has to fit your ability to pay, but if you don’t also consider bottom line price, the dealer will have you paying that low low payment for 7 years at 12% interest! Know your budget, and don’t even MENTION a monthly payment until the bottom line price has been established.
Also, ALWAYS have insurance quotes in hand. Many people get sticker shock by procrastinating, then finding out AFTERWARDS that their shiny new purchase comes with sky high insurance rates. Get your details lined up ahead of time so that when you close the deal, you can call and say “I’d like to activate the policy we set up”.
A useful note on handling financing…I go in with financing in hand, but I always give the dealership an opportunity to beat my financing if they can. After we’ve settled on the price, I sit down with the finance manager and tell him/her that I already have financing but am open to theirs if they can do better.
Manager: What’s your rate?
Me: My rate is…good. (Never tell them your rate.)
Manager: (Realizing that I’m dealing with him/her as the salesperson s/he really is, pauses.) We can do good.
I keep up with the calculations on my laptop. Since the finance person has at least five offers to choose from on the computer screen, they can usually beat my in-hand deal (even though I already had the lowest rate possible via BankRate.)
But it’s important to keep up with the payment calculations as you do this, since they’ll usually try to squeeze in some credit insurance or other garbage. By keeping up with the numbers, you force their hands and the finance game-playing has a wonderful way of falling away. And you can probably shave another half-point off your rate.
But it’s not the Prius, it’s this crazy looking concept car called the Toyota Volta, named after Alessandro Volta, inventor of the battery in 1800.
I just helped a friend buy a new VW. I looked for a price on carsdirect.com then we went to a local dealership. The salesman told us they only make $1,000 on that car, they’re so hard to come by, blah blah. He gave us a price. My friend told him firmly but politely that he wouldn’t buy that day, but was serious about the car and would probably buy the next day. More pressure from the salesman about doing the deal right then. My friend reiterated that he was serious but just wanted to do a little more research on the internet and sleep on it. As soon as he mentioned internet, the salesman asked if he meant carsdirect.com and logged on to the site, which produced a price more than $1,000 below what the dealership was offering. Without me or my friend even saying anything the salesman said he would match the carsdirect.com price. My friend bought the car from the dealer the next day.
The satisfaction and entertainment value of “sticking it to the dealer” notwithstanding, I see little economic benefit in taking all this time to buy a car–especially a new one.
In reading the Millionaire Next Door, I learned a couple of valuable lessons: 1) your time is worth a lot and 2) decide how much you want to spend, preferably a sum you can afford, and get it over with.
Even before I got to the step that involved PACKING A LUNCH and heading over to the dealer for the day to stage a sit-in (on a weekday at a time when you would likely be working), I thought to myself, boy this is a lot of time to invest. If you pay yourself a decent wage (what are you worth.. $10/hr, $20/hr, more?) you very quickly lose that $500 +/- bucks you think you’re wringing out of the dealer.
Yes, we’ve all heard the stories about someone saving $5k with their in-depth, no holds barred approach to dealmaking. And, I do think buying a used car takes more effort to establish a seller that you trust. That all said, I see spending this kind of time to buy a new car a poor use of resources. Once you decide what you want and how much to spend, do some internet research for an invoice price, talk to a friend about a good dealer in your area, and go buy the car.
“Figure on devoting at least a month and looking at 200+ cars to find a good used car.”
- are you serious? You must be joking
- I agree with “BY HEAVY AT 12:37 PM”, this is too much effort
- even by the 15th car, you would have spent so mcuh time, effort and money that you’d better off buying a new car anyways, what on earth are you suggesting? I am suspicious that you may be working for some sort of petrol committee, because to look at 200 cars to buy one used car is crazy, probably thousands of dollars of petrol spent going around to look for these 200 cars
When you can tell the Dealer the price you want to pay for your next locally available car, from the comfort of your home…that would be cool.
Did any of you ever walked into a grocery store and try to negotiate on the price of bread or milk? How about gas at the gas station? I encourage you to read all the posts and ask yourself: who is playing the game? You or the dealer? Especially now, every sale matters and dealers are willing to negotiate deeper than ever to meet the price of the customer. However, think about the salesperson. They don’t get paid by the hour, usually selling a car at cost or below means that they’ll make $50-75 depending on the dealership. Let’s say they sell 15 cars a month. How much is that? Do the math. I am no longer involved in the car business however I had been for more than 12 years. What bothered me the most were people trying to take the shirt of my back. As for the gentleman that pointed at the beer can and said if I brought this you’d give me $1000. Keep dreaming my friend! And even if you got a job, who would ever want to buy a car from you?
How much profit should a dealer make? Make a reasonable offer and you’ll get the treatment you deserve. Be a jerk, and guess what? Don’t be surprised they’ll try to rip you off or piss you off.
I am not saying that all dealers are perfect and can’t guarantee the salespeople either, but one think I know. It’s not seventies anymore! There are many resources you have available to make an informative decision. If you don’t start the game they won’t play it (most of them) Good luck with your next purchase!