Car buying advice

[Lazlo]

My friend of mine is wanting to buy a new car, but doesn't really know much about the process and niether do I. What are peoples opinions? He wants somthing new or close to new and has good credit. Last car was a lease so he doesn't have a trade in. Should he go to a dealership, get a bank loan and buy from a private seller, anyone know anything about car auctions? Any help would be much appreciated. Thanks in advance.

 

[Wingate1217]

If his heart is set on a new car, (remember his purchase will depreciate a couple of thousand $ as soon as he drives it off the lot) then i would recommend going to a web site like carsdirect.com and looking up the retail price of the car. That will be a good starting point in negotiating with the dealer. Do not pay any document processing fee, or destination charges. Nor buy the warranties, rust proofing and/or fabric protectors that they will offer. You can do it cheaper yourself and in the private sector a whole lot cheaper. Also go to the manufacturer's web site and look up the rebates and financing alternatives available. Some dealerships will fail to mention the available rebates or the cheaper financing alternatives. (They pocket the rebate and sometimes split the difference with the financing agent should they talk you into a higher rate than the market will bear.) Remember you can always go to a bank, credit union etc. for financing and they sometimes have a better deal than the dealership. Do not be afraid to walk out on a deal because you:
1) Don't like the deal;
2) Are getting the full court press to purchase;
3) or they are not taking you seriously.

Well, I hope this helps.

 

[LoKyBuckeye]

I've always bought from a dealership so I can't give any advice on an auction.... but never be affraid to walk away from the salesman. I walked away from a deal because they were $1,000 above what I wanted to pay. As I was getting in my car the salesman met me at my car to tell me they would take my offer.... you should never have to pay the sticker price.

When you decide on a car check out Kelley Blue Book for their prices.

http://www.kbb.com/

EDIT: Wingate beat me to the "walk away part" :)

 

[BuckBackHome]

Check out www.edmunds.com as well.

 

[NightmaresDad]

Auctions - If it's a dealer auction he will still have to have a dealer buy the car at the auction (your friend can be at the auction and inspect the car, just can't make the purchase) - if he is tight with a dealer and can trust them, he should offer them a $500 profit and have his dealer bid on it - this option can save a bunch of $.

Personally, I usually look for cars that are about 2 years old, with low mileage and have been cared for. (Would still be under warranty for a while, has depreciated enough to be a good value, and the engine is really just getting broken in after 2 years) I tend to shy away from used cars that were previously leased (not saying it's an automatic NO), not smoked in, and definitely no rust.

Obviously, with new cars, you don't have any worries along these lines, but as mentioned earlier, you lose about 10-20% value when you drive it home.

Also, don't let the dealership sell him on a monthly payment - focus on the total amount of the payments and actual price offered.
If your friend owns his own business, he should look into leasing it through the business. (I doubt this applies, though)

Oh yeah, and don't forget to kick the tires!

 

[ScarletBlood31]

Check out www.edmunds.com as well.

yeah i got their book "Strategies for the Smart Car Buyer" a while back and it helped out incredibly.

 

[Deety]

If his heart is set on a new car, (remember his purchase will depreciate a couple of thousand $ as soon as he drives it off the lot) then i would recommend going to a web site like carsdirect.com and looking up the retail price of the car. That will be a good starting point in negotiating with the dealer. Do not pay any document processing fee, or destination charges. Nor buy the warranties, rust proofing and/or fabric protectors that they will offer. You can do it cheaper yourself and in the private sector a whole lot cheaper. Also go to the manufacturer's web site and look up the rebates and financing alternatives available. Some dealerships will fail to mention the available rebates or the cheaper financing alternatives. (They pocket the rebate and sometimes split the difference with the financing agent should they talk you into a higher rate than the market will bear.) Remember you can always go to a bank, credit union etc. for financing and they sometimes have a better deal than the dealership. Do not be afraid to walk out on a deal because you:
1) Don't like the deal;
2) Are getting the full court press to purchase;
3) or they are not taking you seriously.

Well, I hope this helps.

This is great advice. Don't forget to look up the wholesale price of individual options as well as the car model... there's an awful lot of fluff built in.

Once you get the total, I think a decent rule is invoice less rebates for domestic cars (which usually have a dealer holdback, so the dealer still makes enough for it to be worthwhile) or $200 over invoice for foreign cars. Not a ton of profit, but usually that's sufficient to make it worth a dealer's while.

Go in during the day or mid-month, and you'll get plenty of games. As a former Honda/BMW salesperson, I strongly recommend scoping out the exact car ahead of time, then going in 20 minutes before closing time, on the last day of the month if you can swing it. At that point, everyone in the dealership will just want to get home, and at the end of the month, getting those per-car bonuses makes even a very low-profit deal look mighty good. Within my first month, I was second in auto sales for that place based almost entirely on taking the last, quick, painless sale of the evening.

Also, make it clear that you are making one offer, take it or leave it, no coming back with new figures from the guy in finance you never see. Yawning helps, too. I helped a good friend save $3000 on a convertible he'd already agreed to buy, but it was darned tough with him sitting there drooling...

 

[ScarletInMyVeins]

Slick... I know quite a few car salesmen that I trust will treat your friend with respect and will not rip him/her off. If you'd like you can PM me and we can talk further. I also know a couple of finance managers to assist in the financing. Just let me know.

 

[DA-Bucks]

I have a suggestion:

I'm selling my 2002 Volkswagon Jetta.
Has 24,750 miles, a 4 year 50,000 mile warranty (expires June 2006).
1.8 liter turbo engine (180 Horsepower)
17 inch Alloy wheels
Cold weather package (heated seats and mirrors)
Baltic Green Color
Tan cloth interior
Monsoon Stereo with CD player

Very fast car (surprisingly), sports suspension. Excellent condition - no mechanical problems whatsoever

$13,500 negotiable.

/shameless plug

 

[HabaneroBuck]

Go in during the day or mid-month, and you'll get plenty of games. As a former Honda/BMW salesperson, I strongly recommend scoping out the exact car ahead of time, then going in 20 minutes before closing time, on the last day of the month if you can swing it. At that point, everyone in the dealership will just want to get home, and at the end of the month, getting those per-car bonuses makes even a very low-profit deal look mighty good. Within my first month, I was second in auto sales for that place based almost entirely on taking the last, quick, painless sale of the evening.

Wow, I had never heard that advice before, but it makes a lot of sense! Thanks a lot, Deety!

 

[ArtilleryBuck]

I have a suggestion:

I'm selling my 2002 Volkswagon Jetta.
Has 24,750 miles, a 4 year 50,000 mile warranty (expires June 2006).
1.8 liter turbo engine (180 Horsepower)
17 inch Alloy wheels
Cold weather package (heated seats and mirrors)
Baltic Green Color
Tan cloth interior
Monsoon Stereo with CD player

Very fast car (surprisingly), sports suspension. Excellent condition - no mechanical problems whatsoever

$13,500 negotiable.

/shameless plug

That's a pretty good deal. You shouldn't have any problems selling it.

 

[LoKyBuckeye]

Go in during the day or mid-month, and you'll get plenty of games. As a former Honda/BMW salesperson, I strongly recommend scoping out the exact car ahead of time, then going in 20 minutes before closing time, on the last day of the month if you can swing it. At that point, everyone in the dealership will just want to get home, and at the end of the month, getting those per-car bonuses makes even a very low-profit deal look mighty good. Within my first month, I was second in auto sales for that place based almost entirely on taking the last, quick, painless sale of the evening.

agree... this is great advice. It's kind of how I got my Trailblazer. The dealership was having a "once a year" sale where they were trying to sell 3000 cars in the month of June (the company has a number of dealerships). We went in at 10pm on the last day of June and had no problem getting the deal we wanted.

 

[NJ-Buckeye]

very informative stuff.. thanks Deety... that was GREAT stuff...
not sure how a degree in Fine Arts Admin helped prep you for selling cars???

I had an interesting experience a couple years ago... wife wanted the Honda CRV... we shopped half the state... and no one would deal a dime off window sticker... we'd try to haggle and they'd point to the sticker... car was in such demand no dealership had an unsold vehicle.. all were ordered and required $500 good faith money... it was like they were saying... "if you want it lady, there's the price.. if not.. 'NEXT' " .. had never seen such a demand and supply dynamic in such force...

Town dealer gave us $300 AFTER we agreed to buy at sticker... as a 'townie discount'...

Will be buying a 2dr Civic pretty soon for the daughter... does 20 minutes from closing on last day of month work for used cars too?

 

[stxbuck]

Check w/ a banker you trust, because oftentimes the bank will give you a loan that is a few points better than the dealership. Take the dealerships offer, if it is contigent upon financing w/ them, and then pay it off immediately from the bank. Legally, they have to do this. This saved me quite a bit when I purchased my truck. Also, you can't go wrong w/ a Chevy.......

 

[Deety]

Will be buying a 2dr Civic pretty soon for the daughter... does 20 minutes from closing on last day of month work for used cars too?

Sure, except that there are no incentives to the dealership involved, so the end-of-month thing is only important to the salesperson. Also, I don't remember ever seeing less than a $1,000 markup over the dealer cost on a used car - and sometimes several times that - so negotiate pretty aggressively.

Oh yes... that whole last-minute thing works much better if you have credit pre-approved from a bank.

not sure how a degree in Fine Arts Admin helped prep you for selling cars???

That was the summer I was kicked out of the house for dating a Mormon. Funniest part is that I didn't know how to drive a manual transmission, so one of the guys who washed the cars would quietly park the cars I showed in exchange for an occasional lunch at Taco Bell. :)