Car Buying Tips

I used to work for several car dealerships. These are articles with an insight from within the car business. The entire blog is designed to give consumers the information they need to make better car-buying decisions. This goal goes beyond pointing to Kelley Blue Book or Edmunds to look up values. Here, you will learn the ins and outs, nuts and bolts, and the dos and don'ts in buying new or used.

9.5 Odd Car Buying Tips Nobody Will Tell You

Sometimes the best way to buy a car is to think outside of the box. In this article, I’ll show you how to turn the box inside out and have the absolute best car buying experience ever.

If you’re reading this article, you are savvy enough to look for information before you undergo the root-canal procedure known as car buying. If you are the type of person who can keep an open mind and maintain focus on the details, you should be able to use this information to quell any potential pains in the process.

(1) Eat Before You Go

The last thing you want to hear when in the heat of an important negotiation is your stomach. It has been scientifically proven that hunger can cloud our judgment and negatively affect our state of mind.

Eat. A car deal can take a long time to complete. Even those who pride themselves on being able to get in and out of a dealership can often run into the unforeseeable roadblock of waiting to get into finance to finalize the deal. A pleasant meal before embarking can eliminate a potentially unpleasant factor in the process.

 

(2) Ask the Receptionist

Most receptionists at car dealerships know more about salespeople, their styles, and their pitfalls than anyone. They are the least biased employees because their pay is rarely affected whether you buy a car or not.

Call ahead and ask point blank, “I really want an honest, pleasant salesperson to work with me. If you were buying a car, who would you want to buy it from?”

 

Some will answer. Some will need prodding. If you can get a response, it will most likely be a useful one.

(3) Bring Donuts

First impressions are important whenever you meet someone new, especially those who can help you. Salespeople are primarily out to help themselves (as most people are), but that indirectly means they want to help you to help them make money. If you don’t buy, they made nothing.

Bringing donuts sets the tone. You will be instantly liked, not only by your salesperson, but everyone who indulges in your treats. It sounds insane, but when it comes down to those final negotiating dollars and cents, a considerate customer will receive more consideration from the dealership.

 

If they like you and want you to be their customer, there is a decent chance they will step out a little further to earn your business. If it saves you $50, $100, or $500, why wouldn’t you want to spend $10 on a couple of boxes of donuts?

(4) Prepare to Make a Day of It

It’s possible to buy a car in an hour or less. It’s also possible to win the lottery. I would wager that the latter happens more often than the prior.

If you set aside a full day and start early, there won’t be any time constraints that can ruin a car deal. If you are able to wrap it up in 3 hours, that’s more time for the mall, golfing, or showing your new ride to friends and family. If it turns into an 8-hour day, at least you were prepared for it.

It happens every day. Someone goes to a dealership, finds a car, starts to negotiate, but has to leave for one reason or another. The next day, the car is gone. They can get mad, but the reality is that people regularly promise to come back the next day and never show. Unless they put a deposit down, most vehicles cannot be held.

 

(5) No Distractions

Dealerships are rarely good places to bring kids. Buying a car can be long, tedious, and overall unpleasant. Don’t make it worse by bringing your (or someone else’s) children if at all possible.

Set your phone to silent. If you can’t, make sure the office and everyone else knows to only call for emergencies. Treat buying a car as if it is something important. That shouldn’t be hard – it IS important.

(6) Take a Long Test Drive

When you narrow it down to a vehicle that truly piques your interest, ask to take an extended test drive without a salesperson.

 

With most state laws regarding insurance, your full coverage should cover it. Any dealership who won’t allow it is one that doesn’t like losing control of a customer, and thus probably isn’t the right place to do business.Drive it on the highway. Find an empty parking lot if possible and test the feel of the brakes (without putting yourself in danger). Spend some time with your favorite station/cd/mp3 playing. Spend some time with the stereo off.

Take it home or to a parking lot where you can get out, look it over thoroughly, and decide if you can picture yourself in it.

 

Take it to a friend or family member to get their opinion.

Whatever you do, don’t make a large purchase like buying a vehicle without an extended test drive first.

(7) Use a Lifeline

Phone a Friend. On Who Wants to be a Millionaire, it’s the most important lifeline. On Who Wants a Good Deal on a Car, it is possibly more important.

Have someone available by a computer to look up anything you need to know. If you’ve found a used vehicle you like, have someone look it up with a large search radius on Orlando Used Cars or other local internet dealer listings.

 

There may be one with similar equipment and miles out there for thousands cheaper. It could help with negotiations. There may be tons out there that are more expensive, reaffirming that you’re getting a great deal.

For new cars, you should know all of the information before going to the dealership because you…

(8) Work the Internet First

Especially for new cars, it is important to get a quote online from the internet departments of good dealerships. Checking with Kelley Blue Book for new car values, then cross referencing your results with actual dealer inventories can give you the information you need to make a decision.

In some dealerships, the internet department is made up of salespeople. In others, like Oklahoma City Ford Trucks, the departments have Customer Resource Specialists, Business Development Operators, or one of a plethora of colorfully-titled, non-commissioned representatives to do research and get you the best prices.

The first thing you should ask when starting a dialogue with an internet department is whether or not they will be the salesperson assisting you. If not, you are probably dealing with a salaried employee who makes a bonus if you buy but who doesn’t make a percentage of the gross profit.

In other words, they get paid if you buy regardless of the profit, and thus will work harder to lower the price for you.

You have an opportunity to cut through much of the red tape and get straight to the price with a true internet coordinator. If they are commissioned salespeople, then you might as well refer back to “Ask the Receptionist” before deciding to work with them or not.

(9) Trust Your Gut

The human instinct is normally very trustworthy. If you feel that you have found a good car at a good price, you probably have. If you aren’t sure, keep working.

If you have a strong negative feeling about the car deal, chances are you haven’t found the right vehicle, haven’t gotten the best deal, or didn’t bring enough donuts.

 

This is the toughest part for many people.  Do they trust their gut normally?  Has their gut been wrong often before?

 

This is an ambiguous piece of advice, but if you've read this far down, you probably don't care how ambiguous it is.  At least it makes sense.

(9.5) Enjoy the Experience

In Princess Bride, Billy Crystal’s character says, “Have fun storming the castle!”

The line is nearly as ridiculous as someone saying, “Have fun buying a car!” Still, I will say it with feeling.

It doesn’t have to be bad. The dark ages of car buying (1978-1997) are all but gone, thanks tremendously to the internet. Many of the sleazy salesmen of yore have withered to selling furniture, vacuum cleaners, or real estate. Those who are left have been reprimanded often enough by an informed public and therefore have reluctantly adapted.

There are still bad ones out there, but not nearly in the bulk that existed before. An old- line salespeople used to use when getting caught asking for full sticker on a vehicle went like this:

“I didn’t think you were a fool, but if you were, I didn’t want to miss you!”
Thanks to the internet, many dealers start off discounting a car before the customer asks for it. The old line has been replaced by one that is more relevant in today’s competitive car market:

“You may not have checked it out online, but if you did, I didn’t want to insult you.”

Special thanks goes to Al Gore
for inventing the internet.

I hope it helps.

 

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Step by Step: The Car Buying Checklist

 

Many people feel that they know how to buy a car from a dealer. They've bought many cars in their lives and they "don't need no stinkin' advice" to make the best deal they can make.

Before you go into the process of purchasing a vehicle, remember 2 things:

1. Regardless of how prepared you think you are, there's probably something you missed if you aren't systematic about it.

2. Most people buy a car every 2-5 years. Most salespeople sell 2-5 cars a week. They have a little more experience than you on "the battlefield".

Here's a step-by-step checklist that briefly describes the process you should use before, during, and after making a car deal, whether you are working with Orange County Toyota Dealers or Cincinnati Used Cars.

 

Research Your Target Vehicles

This one seems like a no-brainer, but it's possibly the most important. Are you looking for something general, like a "low-mile import sedan" or something specific like a "new 2008 Honda Accord EX V6, Red". The internet is loaded with reviews and pricing guides to lead you in the right direction.

For new cars, make sure to visit the manufacturer's site to see what rebates and incentives are available. It can make a difference in your choice if you're considering multiple makes and models.

Secure Your Financing

It is amazing how many people start their loan process at the dealership. It's the lazy way out. FACT: Most dealers can get you a better rate than you can get elsewhere. FACT: Most dealers won't give you the best rate you can get if you don't have a better offer up front. Especially for used cars, get an idea from your bank, leasing company, credit union, or third party finance provider of what you qualify for based on your target vehicle. If you go in knowing what rate you should get, what term works for you, and what your approximate payment is, you can either negotiate a better rate at the dealer or have financing ready if they can't beat your rate. 

The vast majority of dealer websites will have their inventory listed online. Use the search engines to find "Los Angeles Honda Dealers" or "Used Cars Richmond" to get a list of local dealerships that should have what you want. Check their inventory, then request a quote or call the dealership to verify availability. NEVER go to the dealership without making sure the vehicle you are considering is physically at the car lot. It also makes sense to get a vehicle history report on used cars as well.

You should also check out classified sites like CraigsList, Autotrader, Used Car Search, Cars.com, and many of the other new and used car listing services. These will help you to sift through the dealer inventories and compare vehicles side by side. Need a new car? Get quotes from multiple dealers through lead services that work with multiple dealers.

Perhaps most importantly on this point, expand your horizons. So many people search in a small radius. You have the internet. You can shop 20 dealer inventories in a couple of hours. Driving 100 miles -- pain in the rear, but hey, how often do you buy a car? Isn't it worth a longer drive to get the right deal?

Prep Your Trade-In

 

You've found some cars you like. You drive up, pick one out, get ready for the negotiations, and the salesperson asks you for the keys to your car. When he returns, you are one of the majority of people who isn't satisfied with what the dealer offers.

You can help this. It sounds simple, but pay attention. Before you go to the dealership, change your oil, empty the car out, and wash it. A full detail is preferred, but at the very least, make it clean. Make it smell good. Make it appear as close to immaculate as you can. A car that seems well cared for will get a higher trade value than one that does not have that "pampered" feel.

Check the value of your trade before going. You can use sites like Kelley Blue Book or Black Book, but your best bet is to get a real quote from a car buyer. Most areas have buyers like Cash for Cars Orange County and Car Cash New York. Find the one in your area and get a cash bid before heading out.

Price In Mind

Every car you are considering, whether new or used, has a market value. For used cars, it's normally somewhere below the average price listed on the classified sites above for similar vehicles to the one you're considering. For new, it can be anywhere between invoice and $1000 over invoice, depending on the demand of the vehicle. Some can be sold below invoice. More "in demand" vehicles can bring MSRP, though this is very rare.

At The Dealership

There are certain things to remember when you're at the dealership. Several articles can be written about what to do when you're there, how to inspect a preowned vehicle, negotiating techniques, finance office advice, and everything else that happens at the dealership itself. Instead of stuffing details into this article, we'll list a few pointers to remember:

• Just about everything is negotiable. The price, the trade value, the interest rate, the extended warranty -- most dealerships will work with you on everything that you want to work on.

• Avoid payment negotiations. If you go in knowing that a $9,000 car with $1,000 warranty on a 48 month loan at 7.9% with no trade or cash down should be a few dollars under $250 per month, then there's no need to freak out when they tell you on the sales floor that your payments will be $270. They are simply padding your payment expectations so the finance manager has room to negotiate interest rate and add-ons. No worries. Everyone has the right to try to make money. They just don't have to make it all on you.

• Remember, you are in control. You're the buyer. You can walk out on a deal at any time prior to signing the papers and driving away. Don't feel pressured to make a move you don't want to make, but also, don't hesitate on a great deal. If it's great, make the deal.

• Have fun! Sounds hard when buying a car, but the internet has changed the business for many car dealers. It's ultra-competitive now, so many dealerships are shifting towards a customer service attitude instead of a shark mentality. If you go in with the right attitude, it will probably be a smooth transaction. If things get fishy or turn towards high pressure, remember the advice bullet above. You are in control. You can always find a dealer that will work with you.

After the Deal

Again, this could be a long section, but we'll keep it to one or two paragraphs. File your paperwork in a safe place. You may need it later. Set your online (or, gulp, offline) calendars to the important dates -- payments due, scheduled maintenance, end of warranty, etc. Follow up on anything that is owed to you -- they may not call you when the add-on MP3 player you bought comes in, so be sure to keep in touch.

Get involved with automotive forums, become a member of an auto club, and check out any programs that the manufacturer has for owners. There is normally great information as well as piece of mind that can be gained through these types of services.

Perhaps most importantly, talk about your experience. If it was a bad one, make sure people know (even though if it was a bad experience, you should have walked away before finishing the deal). If it was a good one, make sure EVERYONE you like knows about it. This is the 21st century. There are automotive blogs and review sites that can really get the word out. Whether they were good or bad, make sure to share the information. The more people know about a dealership, the better.

Also, the more people who talk/rate/blog about their experience, the closer we will get as a society to having dealers who are conscious of their customers' needs. It will happen some day. The more that people communicate about the good and bad dealers, the better off all of us will be in the long run.

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Car Buying Tips: Buy for the Deal, not the Need

 

The smartest car buyers in the world are almost always in the market for a new (or new to them) vehicle. They keep their car in good shape, make their payments on or ahead of time, and their eyes and ears are always open for the next great deal.

Sadly, most people choose to buy a new (or new to them) car when the need arises. This majority is missing the point.

For new car buyers, the best time to buy a car is when the manufacturer needs to sell them. Last year's leftovers are potentially a good buy for those who drive their vehicles over 5 years at a time before trading, but otherwise, the money saved is lost in the trade or selling of the vehicle later.

Manufacturers come up with something new every year to get the instant boost in sales. These tactics create trends that sometimes last, but usually go away.

Take 0% financing, for example. A few years ago, it was big news when the manufacturer finance departments started offering 0% financing on short term loans. As the months moved forward and sales started stalling out again, the length was extended, capping in September of 2006 when Ford announced 0% for 72 months. Many of the other manufacturers followed the trend, and then, it was gone.

Employee pricing was a big deal in 2005. General Motors introduced it, and within a month, almost every manufacturer had some version of it. It was widely successful for bulk numbers, but the manufacturers and dealerships took major hits on their bottom line, so it went away, potentially for good.

Keep abreast of any changes that are happening. Many dealerships like Johnson City Honda Dealers, Ford Chattanoogo, and Used Cars New Hampshire post their specials regularly and offer up-to-date incentives that can be a guide for their local car buyers.

These are the events that new car buyers should look for, but what about used car buyers? There are no magic incentives that point to a time for used car purchasing, is there?

On the contrary, cash back incentive announcements on new cars have a dramatic effect on the used car market. It is delayed, but when a particular model gets a major cash back incentive, the month or two that follows will show a decrease in late model used car prices.

When a dealer buys a program or late model used car at auction, the values that they pay will decrease when a major incentive occurs. When a new car cash back incentive comes out, check the used car values for that particular model. Check again a month later. Then once again a month later.

That 2nd month after an incentive is prime time to buy the late model used or program vehicles.
Finally, older used car buying is a game of patients. For those looking for vehicles under $5,000, the best thing they can do is wait, watch, and be ready to pounce. It can take months, or it could happen in a week, but there are individuals out there who want a quick, easy transaction, or who simply do not know the value of their vehicle. Watch the online and newspaper classifieds and be ready to make a move.

Instead of waiting for your car to reach a mileage milestone, or a change in circumstance, or a vehicle breaking down, do the research and buy your next vehicle at the exact right time.

This car buying article brought to you by Automotive SEO.

 

 

 

Gas is High: Time to Buy an SUV

 

Gas prices are leveling across the country. Sounds good, but in reality, it's a bad sign for the future. Gas trends pointed to higher prices this summer. So far, they have been hovering around the same level. It means we're in for harder times and higher prices this fall and winter.

It also means that now is the best time to buy an SUV, truck, big car, or anything known as a gas guzzler. Sounds crazy, right? It's not.

1) As gas prices rise, standard SUV prices fall. This trend doesn't seem to effect the luxury SUV line, as this MSNBC article shows. Small SUVs don't get hurt either. But if you're looking at an Explorer, Pilot, or other mid-sized or larger SUV, the prices are at their lowest and probably will be for a little while.

2) When winter approaches, consumers in many areas where snow and ice are possible will take their chances with the gas and take on the safety of a 4-wheel- or all-wheel-drive. Prices will go back up a bit then.

3) They don't get 9 miles per gallon, as many people think. An average 15K miles per year, 55% highway miles driver can expect to pay about $10 less per month for every average mile per gallon they improve. So, the difference between a Nissan Pathfinder and a Volkswagen Passat is about $600 per year in gas. It sounds like a lot, but so many people pay $2500 or more extra to get into a hybrid.

This post by no means indicates that I support purchasing an SUV. They are not "environmentally responsible" for someone without a need. But for those nice, big families in snowy states, it's okay to make the switch, and now is the time. They can go to those who brought this article to you, Minneapolis Used Cars, Atlantic City Chevrolet Dealers, or Portland Honda Dealers.

If you're not in that area, any old car dealer will have to do.

Top 11 Car Sales Lines that are still used today for some reason

 

1) “I don’t know if I can do that it, but if I could, would you buy this car today?”

2) “What’s it going to take to put this car in your garage today?”

3) “We knew it had that problem. That’s why it’s priced so low.”

4) “I’ll even throw in the floor mats.”

5) “The price doesn’t matter. It’s all about the payments. It wouldn’t matter if mine was priced $5,000 less than the other guys if the payments were $1000 per month!”

6) “I’ll even throw in a tank of gas.”

7) “It’s not just leather, it’s Corinthian Leather.”

8) “I need a sale today to get my kids some clothes for school.”

9) “Tell your friends where you got it, just don’t tell them what you paid for it.”

10) “I’ll even throw in a free detail.”

Bonus: “I didn’t think you were an idiot, but if you were, I didn’t want to miss you.”

Brought to you by car dealers who don't use silly lines like these: Dodge St Cloud MN, Used Cars Orange County, and Dodge Fort Wayne. Compiled using lines from other car dealers that do.

Some dealers just don't need to do it the hard way.

 

If it's too good to be true...

 

You know the rest of the saying. I wanted to point out one of the major flaws in today's automotive advertising world. It isn't the fault of the car dealers, at least not completely. To some extent, buyers who still make the trek to dealers to buy a $10,000 new car that has a sticker price of $20,000 help to perpetuate one of the most misleading advertising techniques in the automotive world.

One pay leases, or just about any lease for that matter, allow dealers to advertise "Drive Off" prices that are so far below the MSRP, they couldn't be real without some sort of catch. The "catch" with these programs is that you do not actually own the car, you are simply leasing it for the period set by the finance company. At the end of the lease, you can turn your car back in or pay the balance.

Leases in and of themselves are not bad. I want to focus on advertising the leases in a way that makes people believe they can buy a car for far below actual cost. People come in to buy a car at an outrageously low price. This price is based upon the total lease payments of the most basic version of a model. When the customer gets to the dealership, reality is spilled upon them in various degrees and at different intervals.

The goal is to get the customer to the dealership, then put them into a different model at a different cost. Despite the majority of people who do not fall for this tactic, there are still enough who go in for $150 payments and drive off at $299. Granted, the vehicle they take home is nicer than the one advertised and probably has a better finance term than the one offered, but it still keeps some dealers thinking that the tactic works. Why? Because it does, and in today's super-competitive automotive marketplace, it is important for them to do what they can to make it happen.

If you see an advertisement that interests you, call or email and get the details. All of the details. Chances are very strong that you will not get the complete picture upon first inquiry. It's okay. Keep asking. When they say they can discuss it more in-depth at the dealership, simply tell them that "if the terms of this deal are so bad that you cannot divulge them over the phone or email, it must be a ploy to get me to come in hopes that once I am there, you can put me in something else at a higher cost and payment."

Wait for a reply. If it isn't a good one, find someone else with which to deal.

 

Where Car Dealers Make their Money Now

 

Before the Internet came and ruined everything, it was possible for car dealers to average over $2500 in adjusted gross profit on the sale of a vehicle just in the "front end". "Adjusted" gross profit does not take into account dealer pack, another form of profit that the car dealer institutes to give a base profit for dealer costs. In other words, even in a "break even" deal, the dealership itself still made hundreds or even thousands that was used towards base expenses. The profit over that was truly profit.

In today's world, many car dealers do not average in the thousands on their "front end" profits. Some average less than $1000 profit on vehicles that cost $25,000 or more. One may ask how they can stay in business if they are making pennies on the dollar compared to the early 90s.

The answer lies in the "back end". First, the definitions: Front end is gross profit on the sale of the vehicle itself, regardless of the payment method. Back end gross refers to money made in the Finance and Insurance department through the sales of various products and through percentages made on the financing of the vehicle.


 

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These products, which include warranties, gap insurance, credit life, and other various elements, are often high profit items. A dealer may sell an extended warranty for $1,999 but might only pay $600 for the contract itself. The rest is profit.

In financing, dealers have a "buy rate" and then they have the rate that they sign the customer with. The buy rate is how much the finance company charges. Anything over that is profit, and it can be very large.

For example, if a dealer has a buy rate of 4.3% and they sign a buyer up at 5.9%, the money earned through the extra 1.6% is given to the dealer. This is a very simplistic way of looking at it, but it gives you an idea of how the system works.

While front end grosses continue to go down, especially in the ultra-competitive new car market, back end grosses are getting higher. While I am not suggesting that this is a bad thing, it is the place where average consumers are still in the dark.

Dealers have to make money to survive. Despite common irrational feelings that people have towards dealers, they are still a service to us and they deserve the right to turn a profit. That doesn't mean that they have to make their profit off of YOU.

Shop around before you go to the dealer. It isn't just finding the best deal on a vehicle. It is important for people to have an idea of their best interest rate as well as the best prices on warranties or other services they may want to consider. Most of the times, these things can be negotiated in the F&I office.

Check with your bank or credit union to find out what rates they are offering. Check various online auto finance places. Know where you stand in regards to your credit so you can get the best rate you deserve. This does NOT mean applying for a bunch of car loans. Try to get an idea without having your credit pulled more than once or twice. If you can prepare ahead of time, order a credit report and take it with you to the bank or credit union. Ask for an honest assessment of what you can get and what to expect. The car dealer will normally be able to meet or beat any number you get from other sources, so knowing what they offer will give you a bargaining chip.

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The same holds true for warranties and other products. It is a little tougher, but can be done. When comparing online, it is important to make sure you are shopping "apples to apples" and not "apples to oranges". Look at it like choosing a health insurance plan. There are cheap plans, but they are just that: cheap. Find a good plan at a good price and be ready with the details when you go to the dealer. Again, they can usually beat anything that you bring in, but if you don't have the information, they won't volunteer a discount.

Smart shoppers know to compare everything, not just the cars they are buying. Knowledge is power, but more importantly, knowledge can save you a lot of money.