Car buying process with car salesman and buyer

How To Shave Thousands Off Your Next Car Purchase

A savvy, well informed and well prepared shopper is often a car dealer’s worst nightmare. If you’re in the market for a used car and have seen a great sounding offer online that you like, the biggest mistake you can make is to immediately respond by visiting the dealership on your next day off. That is exactly what the dealer wants you to do, and buying a car in this manner could easily cost you thousands. Unfortunately, this is the mistake a lot of unassuming car buyers make when purchasing their car.

The dealership’s singular goal is to draw you in using powerful incentives such as “0% interest” or “no money down”. Whilst at the dealership, you’ll be dealing with slick, expertly trained salesmen who will use every trick in the book to get you to spend as much money as possible. You need to be educated, informed and well prepared before you even think about making your way to the dealership or you may end up losing your shirt in the process.

Online Research

When you have narrowed down your choice of used car to a specific model that has all of the features you want and you’re happy with its reliability and safety, the next step in the buying process is to perform online research. Your ultimate objective is to get the cheapest cost possible for the car. It is important however, that you are comparing apples to apples when researching price.

Consider other elements of the sale that you’ll be interested in: extras, interest rate, service contracts, etc. Get a quote from several free, objective and reliable internet sources so that when you walk into the dealership, you have a good idea of what a good deal would be for the car. In addition, check out reviews on to find out what previous buyers are saying. Keep in mind that around 10% of car owners will want to change the car they already have just for the variety.

However, if over 80% of polled owners say they would never buy the same car again, you’ll want to search for an alternative. On the flip side, if there has been a large purchase of a particular model and more than 70% of the polled owners say they would buy the same model again with their hard-earned cash, you have yourself a winner.

Use the following sites to do complete your research:

  • AutoByTel (
  • Kelley Blue Book
  • The Black Book
  • AutoNation
  • Car and Driver
  • Sam’s Club:
  • Edmund’s
  • National Automobile Dealers Association (NADA)

Choose the right dealership

If the car has great reviews, search for three to five dealerships closest to you that have that car. It is important to be very selective when choosing a dealer to do business with. Research the dealers to focus on dealerships with the best reviews. Stick to dealers that have been in business for at least five years. Check out what previous customers are saying about the company on Yelp, Trust Pilot and other review sites.

Contact your local consumer protection agency, state Attorney General (AG), and the Better Business Bureau (BBB). Anything short of an A rating and you should look closely at the complaint section to find out if there have been any unresolved complaints. However, you should also keep in mind that there will always be people who complain about anything and everything, and are never satisfied no matter what. So don’t dismiss a particular dealer just because they have an unresolved complaint. Read the complaint to get a sense of what type of company it is.

When to Buy

Some of the best deals can be had by buying a car at a time when dealers are ready to make great deals. If possible, wait until the end of the year before you buy, as there will be greater incentives for dealerships to negotiate. Most dealerships work on a bonus system. In December, car companies and car dealers are trying to sell as many vehicles as possible to boost sales and revenue numbers for the year that is coming to a close. If you can wait to buy a new car at the end of the year, you should have no trouble getting a great deal.

  • The end of summer is the best time to take advantage of extra rebates and incentives as car companies are switching production from current model year vehicles to next year’s cars, truck and SUVs.
  • End of the month – Sales people and dealers are trying to move as many vehicles off the lot as possible to qualify for bonuses from the auto manufacturer and to maximize their pay checks. These are great times to strike a good deal.
  • When visiting the dealership, be sure to go there around one hour before closing time when everyone wants to go home.
  • The worst time of the year to buy a car, particularly a used one, might be spring. This is because there are more buyers which means more opportunities for dealers to sell without offering big discounts.

Documents to take with you

When you go into the dealership to discuss financing, you need to bring along your paperwork that will allow a dealership to establish who you are and confirm that you have a job, that you have a history of making monthly payments on time and have friends or family the dealership can contact to find you if you stop making payments.

Be sure to bring in your credit report and credit scores from all three agencies, in case the dealership insists on using their preferred credit agency. This strategy will allow you to shop around for the best deal, but without lowering your chances for approval and better rates in the process.

Let the dealership know straight off that you’re ready to buy if they can offer you the deal you are looking for. Provide a print-out of the report given by the credit bureau to the finance manager at a dealership, and don’t let them do a credit check until you’ve struck a deal. They should be able to evaluate whether or not you’ll qualify for financing from them based on the score you show them. Take the following items with you:

  • Your credit reports from all three reporting agencies.
  • Your credit scores.
  • Proof of auto insurance
  • Social security number (U.S.)
  • The most recent pay stub from your job
  • Proof of address – your utility bill (gas, water, electricity)
  • Your driver license
  • Three personal references

Negotiating the Purchase Price

It is very important to understand exactly what you’re dealing with at car dealerships. Car salespeople are specifically trained in the powers of psychology, and will use every trick in the book to make the highest profit possible on each sale as much as you want to save the most money on each sale. They are expertly trained to use your emotions and their inside knowledge of how the system works to win your confidence and take control of the sale from the moment you walk into the dealership.

Even if you have a degree in psychology, you’re simply no match for used car salesmen especially the sales manager who is always razor sharp. This is because they get to hone their skills to perfection by practicing phrases and tones of voice on real individuals every single day. The only thing you can do is to avoid small talk completely, and restrict the conversation to what you already know you want.

If you are not well prepared, they will have you for dinner. You need to approach the used car buying process as a strictly business deal with the right mindset so that you get the car you want at the right price. It will be a lengthy and difficult process and they will really test your wits, but it is important to remain calm, respectful and in control throughout.

You may need to visit 3 to 5 dealerships to get the right deal, but it will be worth it in the end because you will have saved thousands and you’ll avoid years of heartache of being stuck in the wrong car. For your first visit, arrive at the dealership around 5.00 PM on a Friday dressed in formal attire to let them know you’re coming from work.

If you are on your game, you can probably get everything done that evening, but it is far better to return the day after to negotiate financing. Seek out a less experienced salesperson to deal with. Avoid the really slick looking sales people that seem to have all of the answers. Get ready to play the dealerships off each other, telling them the price to beat. Never let your guard down, but also never let your ego get in the way of a good deal.

By the time you get to the dealership, it is important to already have a clear idea of your price range, what monthly payment is reasonable for that price range, and what features are important to you in this car. Base every decision you make on the research you have done. Do not let the salesperson know how much you are planning to spend. If you do, they will try to lure you into buying a car that maximizes their commissions rather than showing you everything in your price range.

This is why it is extremely important that you do not get drawn into talking to salespeople about monthly payments, trade-ins, financing or what you can afford. Simply ask to see cars that are within a specific price range. Stand your ground on this.

Try as much as possible not to get into any small talk or discussion with the salespeople because all they are looking for is an opportunity to take control of the sale. As soon as you walk into the dealership, they will be trying to suss you out. They will try everything; to the point of talking about you being “unfriendly”. This is why you should already know exactly what you’re looking for.

Use comments like “I’ve had a really long day to avoid small talk”. Simply let them know that you have already narrowed down the car you want to the exact model and color, and stick to that. Keep all talk focused on the car model and features you’re interested in.

If you’re open to considering a similar model with your key desired features in the same price range, make sure it is something you’ve already checked it out before. Don’t let them steer you away from what you’ve already researched and made up your mind to buy or deviate too much from the price you’re determined to pay.

When negotiating the purchase price, do not allude to any internet research you’ve done on the car as this will only lead to an argument that you can’t win. They will either disparage the car or the deal as an offer for a car you haven’t seen, or explain that the price is from an internet company rather than a car company.

This will throw you off your game as you won’t know how to respond, and you may lose your edge at that point. This will give them an opportunity to take control of the sale. If you want to highlight price comparisons, bring up prices from other dealerships not websites.

At this point of the sales process, you are only interested in getting the right purchase price for the car and features you want. Focus on doing just that. Even if you intend to trade your car in, do not bring up any discussions about a trade-in until you have agreed on a purchase price for the vehicle.

If the salesman asks a question about a trade in, let them know you haven’t really considered trading in your car and are not willing to discuss it. Do not entertain any discussion about how you are going to pay for the car at this point. If you are asked to fill out a credit application at this point, refuse and be ready to walk out if they insist.

The Zero Percent Interest Promise

You may have been lured into the dealership by ads that promise zero percent interest. It is important to understand that 0% interest is not always what it says on the tin. Even if your credit scores are high enough to qualify for the deal, the dealership will add several fees and charges to the principal. This is virtually the same as all of the interest being charged upfront.

Many of these dealerships tend to use this powerful incentive as a tactic to get people to ease up on haggling over the sticker price (which could be thousands more you would pay if you negotiated the price) in anticipation of the lower monthly payments that 0% interest promises. Don’t fall for this.

Confirm the Agreed Upon Price

After you both have reached agreement on price, get the salesman to confirm it on a printout that contains the VIN. Double check the VIN to make sure it is correct. It is a legally enforceable document. This is very important because if you don’t have the agreement in writing, the dealership may try to pull a fast one on you at the financing stage of the process. Once price has been agreed upon, you now need to inspect the vehicle and check its history.

Vehicle inspection

Once you have received a quote, it is important to get the vehicle checked out before you do anything else. Always inspect the title document. Look for any “brands” indicating that the vehicle had been wrecked, repurchased under a state “Lemon Law” program, flooded, or had any other problem. Verify the odometer statement against the reading in the vehicle.

Look at the Consumer Reports incidence of repair for this make, model and year, and get your hands on the car’s maintenance and repair records. Get a mechanic to look at these reports to assess the likelihood of repairs. Check out the vehicle’s history. You can investigate a car’s history by its Vehicle Identification Number (VIN). For example, the Department of Justice’s National Motor Vehicle Title Information System (NMVTIS) offers information about a vehicle’s title, odometer data, and certain damage history. The National Insurance Crime Bureau (NICB) maintains a free database that includes flood damage and other information. CARFAX and AutoCheck allow consumers to check for known problems with used vehicles prior to purchase.

However, although these reports provide a lot of useful information, research from consumer reports shows that they cannot always be relied upon because they can miss important information, especially for vehicles that had serious damage. This is why it is very important to always inspect the vehicle rather than relying completely on the vehicle history report.

If after your inspection you have some unanswered questions, you should also have the car inspected by an independent mechanic before you buy so that you don’t get stuck with a car that probably has hidden problems that will manifest themselves within a few months. Once you have inspected the vehicle, you are now ready to perform a test drive. You can learn what to check in a test drive by clicking here.

The NADA Report

If you are satisfied with the vehicle inspection and test drive, you are now ready to negotiate down the quoted price. Start by asking to see the NADA bookout sheet printed for the car for that day. This document will have an official NADA marking. On the NADA bookout sheet, make sure that the VIN number tallies with what is on the report. Look for the adjusted value, retail value and loan value figures for the car.

Make sure there are no accessories listed on the valuation that is not on the car. Check and confirm mileage. Once you have confirmed that you are looking at the same car, you’re now ready to negotiate the purchase price. Now, you want to be fair here. This is a business and you want to pay is a price that allows the dealer to make a profit and the salesman to make a commission, but you don’t want to be mugged. So, try to close out at $500 to $1,000 below the trade-in value on the NADA report.

Dealers typically acquire vehicles at a price up to $2500 less than the trade-in value on the NADA report, depending on the car, so negotiating within this price bracket should keep everybody reasonably happy.

Features and Accessories

Do not include accessories in your negotiations until you have arrived at a purchase price for the vehicle. You can purchase accessories for on the web and get them installed for much less than you would if you purchase them from the dealership. Just make sure that the features and accessories you want can co-exist in the car model you have selected.

Buyer’s Guide

The Federal Trade Commission’s (FTC) used car rule dealers to post a Buyer’s Guide in every used car they offer for sale. This guide must tell you:

  • Whether the vehicle is being sold “as is” or with a warranty;
  • What percentage of the repair costs a dealer will pay under the warranty;
  • That spoken promises are difficult to enforce;
  • To get all promises in writing;
  • To keep the Buyers Guide for reference after the sale;
  • The major mechanical and electrical systems on the car, including some of the major problems you should look out for;
  • And to ask to have the car inspected by an independent mechanic before you buy.

The window sticker should also display the make, model, year, VIN number and an identifying number from the dealership. When you buy a used car from a dealer, get the original Buyers Guide that was posted in the vehicle, or a copy. The Guide must reflect any negotiated changes in warranty coverage.

It also becomes part of your sales contract and overrides any contrary provisions. For example, if the Buyers Guide says the car comes with a warranty and the contract says the car is sold “as is,” the dealer must give you the warranty described in the Guide.

Service Contracts

If you are buying a used car, the dealership will try to sell you extras such as service contracts (also known as extended warranties), insurance and other products. Extended warranties can give you peace of mind, but you are better off buying one over the internet where it will be much cheaper. Avoid buying any type of insurance from a dealer. You’ll get it much cheaper and of distinctly higher quality when you buy directly from your insurance agent.

As Is – No Warranty

This means that the dealer assumes no responsibility to fix anything that goes wrong after the sale. When the dealer offers a vehicle “as is,” the box next to the “As Is – No Warranty” disclosure on the Buyers Guide must be checked. If the box is checked but the dealer promises to repair the vehicle or cancel the sale if you’re not satisfied, make sure the promise is written on the Buyers Guide or else you may have a hard time getting the dealer to keep their promise.

Implied Warranties

In the US, state laws require that cars sold by dealers meet reasonable quality standards. These obligations are called implied warranties – unspoken, unwritten promises from the seller to the buyer. It is important to note that this promise applies to the basic functions of a car. It does not cover everything that could go wrong. Breakdowns and other problems that occur after the sale don’t prove the seller breached this warranty. A breach occurs only if you can prove that a defect existed at the time of sale. This is why it is so important to have the vehicle inspected before you buy.

A mechanic will be able to spot potential mechanical and reliability problems as well as additional costs you’ll need to spend on the car. You may need to get a mobile inspection service to carry out the inspection if the dealer will not allow the vehicle to be taken to a mechanic.

Paying for the car

With all of the hard negotiating you’ve done so far to get the right purchase price, you’d be forgiven for thinking you’ve done all of the hard work. However, unless you’re paying in cash or handling your own financing, nothing could be further from the truth. The fact of the matter is, all of the work you have done up to this point will be worthless if you choose to get your car financed through the dealership. If you do, make no mistake about it, they will do their best to recover what they have lost on the purchase price through the financing.

You’ll be charged higher APR, higher interest rates, service charges, admin fees and other charges. You don’t want the joy of owning a car to be negated by the pain of paying too much on high finance charges. This is why it is strongly recommended that you try to pay the full balance in cash or a personal loan through your bank. Bear in mind that if the car is just a few years old and its mileage does not exceed seventy thousand miles, you may be able to get a loan from your bank using the car as collateral.

7 days ago

Leave a Reply

Your email address will not be published. Required fields are marked *