Apr 27, 2006

Buying That Car, If You Insist

If the time has come where you just have to have a different car, these thoughts are for you. Car buying is a unique transaction because both buyer and seller are trying to stick it to the other side. The thing to remember is that car dealers are professionals at getting into your pocket. You are not. This is not the usual academic discussion about car buying. These are some tips from a guy who learned it the hard way before he wised up and figured this stuff out. These are in no particular order. 1. Do your research before hand. Find out about the cars you like by reading reviews and reports. Use sites like Edmunds.com or KBB.com to find out the fair market values. 2. Don't get all emotional over a stupid car. Don't get pressured because you think the car you are looking at is the only deal in the world. Car sales people try to convince you that you must buy now. Don't fall for it. When the PT Cruiser was a new model people bought the line that they were in short supply new and used and overpaid. Now they can't give them away. Time is your ally. 3. Don't make the deal at night. Go look at your dream car when the lot is closed. That way you can't be pressured. Never try to make a deal after dinner. Dealers tend to close at 9 pm and they will used the time pressure to their advantage. Remember, their worst fear is that you will walk off the lot. 4. Don't buy new. According to the experts and non-experts alike buying a new car is not too smart. New cars depreciate about 15% a year for the first 3 years and 7-10% for the next few. Buy a two year old car with 25,000 miles for 70-75% of the original price. If you are the average driver this car will last you another 10 years easy. You will get sick of it before then. 5. Have your financing worked out before hand. Don't let the dealer be your financial advisor on this deal. It is a conflict of interest big time. The dealer gets backend money for directing the loan on a car to lenders. You ought to be paying cash, but if you don't, get your financing in order beforehand. The bank will tell you what they will loan you based upon your situation. The dealer will get you a loan to cover whatever he can sell you. 6. Buy on price alone. Offer a price. Don't let them talk to you about monthly payment or loan length. Buying on monthly payment amounts is a disaster. Someone will loan you money to by a Hummer for $200 per month if you are willing to take a 20 year loan. Decide on a price that is fair and stick to your guns. Don't talk extended warranties or security crappola period. Extended warranties are mostly profit to the dealer. If you must have one get it yourself. 7. Keep your old car out of the deal. Your old car will bring you more if you just sell it yourself. Additionally, putting your trade into the deal opens up avenues for you to get screwed. If you have researched your old car and found that wholesale value (what the dealer will give if you are lucky) is $6000, you will quickly find out the dealer has a bunch of reason why he won't give that price for it. I had a knucklehead at a dealership tell me Kelly Blue Book didn't mean anything. They had their own book. 8. Be strong enough to walk away If the deal isn't exactly what you wanted, walk. I had a dealer friend who told me that the thing to remember is you can't hurt a salesman's feeling because this isn't personal to him. He is simply trying to get as much from you as he can. Walk away, there are cars and dealers everywhere. They need you to survive, you don't need them. No one ever died of automobile deprivation.

No comments: