5 Simple Car Buying Tips That Actually Work
When buying a new or used car, saving money involves looking at more than just the sticker price.
Do you like giving money away? Many of us donate to worthy causes, but newsflash! – car dealers aren’t charities. There’s no reason you should pay them more than necessary for your next car. And you needn’t feel sorry for them either.
You Should Know the Rules of the Game
Car dealers are smart business people and experts in their field. They won’t do the deal unless it’s somehow right for them. Adopting the same attitude when buying your next car is in your best interest.
Dealers have many ways to persuade car buyers to part with more money than they need to buy a car. They have a minimum price that they won’t go below, but I guarantee you one thing, they’ll try to make as much as possible on every single deal.
In addition, the purchase price isn’t the only cost involved when buying a new or used car. In this article, I will share five simple car buying tips that work. Will they save you thousands? That depends on what vehicle you’re buying, but most likely, yes. And if you read to the end, I may even have a bonus tip for you at the end of this article.
1) Slow Down
If there were a super-secret, silver bullet car buying tip, this would be it. Ever wonder why dealerships look the way they do? With all the colorful balloons, streamers, and banners everywhere. Easily comparable to a casino or human flytrap. Dealers want you to “pop in” to take a look. Unprepared and uneducated on how to buy a car is the worst thing you could be when visiting a dealership.
Buying a new, or newer, car is an exciting business. Hopefully, your old wheels have served you well, but it’s time for something better. You’re looking forward to parking that shiny new ride outside your house, and you know friends, neighbors, and family will be impressed. But will they be awed if they hear you paid top dollar? Probably not, which is one good reason you need to slow down. An impulse buyer never gets a great deal. You see a gorgeous car on the lot, and you walk into the showroom and say you must have it. The salesman knows you’ll pay what he asks.
So slow down. Take your time. There are many great cars out there, so there’s no need to rush for the one you just saw on the dealer’s lot. Don’t be drawn in by the special sales you might see advertised on TV or the Internet. Instead, take a few days to figure out what kind of car will suit you best. Look at your budget and work out what you can afford. Only then are you in a position to start visiting car dealerships.
2) Get a Pre-approved Car Loan Online
Most car buyers finance their purchase, and the dealer will gladly help you arrange that. Have you ever wondered why? It’s because they make money on it. They make money on financing in two ways. First, they’ll often get a commission on every loan they facilitate. And second, they’ll jack up the interest rate a few points over what you need to pay.
And if you don’t think that’s a big deal, consider this: on a $25,000 loan spread over five years, an extra 2% could cost you well over $1,000.
So here’s what you do: you contact a lender, maybe more than one, and get pre-approved for a loan. Doing this will let you know what interest rate you’re eligible for based on your credit score. You’ll also find out if you’re about to stretch yourself for a bigger loan than you can afford.
For the best auto loan rates, apply with online lenders. They’re quick, easy, and can be done from your mobile device or computer.
Myautoloan will search for the best rate with up to four different lenders. If you’re struggling with less-than-stellar credit, Auto Credit Express may be the service to help you rebuild your credit history.
Once you have your loan information, you will have leverage in a dealer’s finance department. Don’t let them know the interest rate you’re qualified for immediately. First, ask them what they can offer you. Listen carefully and make a decision. If they can beat your current rate, go with them; if not, go with your pre-approval.
3) Comparison Shop Using Free Online Price Quotes
You probably shop around for gas. Why wouldn’t you do the same for a car? Unless you’re looking for something exceedingly rare, such as a Maserati or Lamborghini, there will be a lot of options in the market. The best way to shop multiple dealerships at once is by doing your automobile shopping online. This simple technique will save you time and money.
Once you know what you want, check out the online inventory at local dealerships. Then send out emails explaining what you’re interested in and asking for their best price. Most are happy to respond because dealing over the internet saves them time and money.
Just type in the details of your dream car, and they’ll show you what’s for sale nearby. From there, it’s a simple click to reach out to the seller and get a quote. You’ll want to gather as many quotes as you can get at this time. Don’t worry. You can get as many quotes on as many cars as you choose. They’re both 100% free services.
Once armed with quotes, start playing them off against one another. Again, stick to email, be polite, and find out who is prepared to give you the best price. (You want to make apples-to-apples comparisons, so mainly when buying a used car, be sure to consider vehicle condition.) Don’t go back and forth endlessly, though, because every dealer has a minimum they won’t go below.
Suppose you would like to learn more about playing dealers off each other to get a better price. You can read my article on how to negotiate with car dealerships by email. There are even a few email templates you can copy and paste for yourself.
4) Auto Warranties are Negotiable
Modern cars are far more reliable than 20 or 30 years ago, and serious problems are rare. There again, cars have become much more complicated, so if something does go wrong, it can be costly to fix unless you have an auto warranty.
Most new cars come with a three-year bumper-to-bumper warranty from the manufacturer, and a few go for even longer. That’s good for your peace of mind, but what if you want to keep the car for five or six years (which is likely if you’re taking out a five-year loan)? An extended warranty gives you some protection in case a major component fails.
Used cars are generally “sold as is – where is” with no warranty. (Certified Pre-Owned (CPO) vehicles are the main exception.) That doesn’t mean you can’t have a warranty, though. And I promise you, if the dealer can provide an extended warranty for the vehicle you want to buy, they will. Companies out there will also warranty older vehicles for a fee.
You will want to prepare before stepping into the finance department. Once you know the car you want to buy, get a couple of free online quotes. This way, you’ll know what kind of cost and coverage you want. One of the biggest mistakes people make when buying a warranty is they buy the wrong type of coverage or overbuy coverage. Think about what you want vs. what you need.
Two companies I recommend for new and used car warranty quotes are Complete Car Warranty and Endurance Vehicle Protection. They not only have excellent coverage, but they also have many added benefits such as rental assistance, payment plans, roadside assistance, and more.
Here’s the tip: let the dealer present their extended warranty coverage. Ask these two questions, “What does it cover?” and, more importantly, “What does it not cover?”
Dealers can be very tricky and are experts at discrediting anything that keeps them from making a sale. Tell them you have a better price (and better coverage – if true). Tell them they will have to do much better than what they’ve offered if they want you to buy an extended warranty from them.
Many finance managers are paid on warranty penetration and must hit a certain percentage to receive a bonus. If you’re in the right place at the right time, you may be surprised that you can pay for an extended warranty when you know the correct information.
If the dealer is unwilling to negotiate on the warranty price, don’t worry. You can go with one of the warranty quotes you’ve received.
5) Check car insurance rates
Depending on where you live, car insurance costs range from pricey to excessive, but your zip code isn’t the only factor at work. Insurance companies also look at the type of vehicle you would like to insure, what it’s worth and who’ll be driving it. If you’re going to let your teenager behind the wheel of that beautiful new Corvette you’re looking at, prepare for a considerable premium!
It’s not uncommon for the monthly premium to be almost as much as the loan or lease payment. Many people don’t even think about how their insurance may go up when buying a car. I guarantee the car salesman doesn’t want you thinking about it either because that means he has less opportunity to make a bigger paycheck on your deal.
You don’t want this surprise after already signing on the dotted line. You should include this when figuring out your car budget. So, before walking into the dealership, but after you’ve decided what your next car will be.
Do yourself a favor and grab a couple of free quotes from a well-known company such as Liberty Mutual.
Bonus Car Buying Tips
As a reward for reading these five tips, here’s a sixth:
Read everything before you sign. If you don’t understand it, ask questions until you do. It sounds like a simple tip, but you would be amazed how many people email us complaining that a dealer tricked them into a lease or balloon payment situation.
Unethical car dealers can be very tricky and manipulate uneducated car buyers into doing things they don’t want to do.
The car-buying process can be tiring, and the salesperson may sometimes seem to speak a foreign language. Some things to watch for are “Balloon payments,” excess mileage charges, and assorted fees.
You should also check that anything promised to you is in writing. Anything provided for free (or at a discounted price), such as maintenance items or a spare tire, should be written. (And no, some new cars don’t come with a spare tire! can I count that as a seventh tip?)
So, read everything, make sure you understand it, and only then sign your name. When you start on your car search, take your time. You don’t want to drive off happy with your purchase only to suffer buyer’s remorse later when you realize what you forgot!
Be a Savvy Car Shopper
Professional car salespeople are very good at what they do. And they are doing it from the time you first make contact with them until the time you’re driving off in your new car. I don’t care how many cars you’ve bought in your lifetime. It only takes meeting the right person at the wrong time to cost yourself thousands of dollars.
Buying a car is often an emotional decision, and it’s easy to get carried away and spend more than you should or need to. That’s why a standard piece of advice is to take someone with you as moral support or pull you out of there when you’re not thinking right.
While we at AutoCheatSheet.com can’t accompany you, we are here to support you through the car-buying process. You will find money-saving tips and advice on our pages. Check back often to see what’s new!
The number one tip for saving the most money when buying a new or used car is always to take your time and “DO YOUR RESEARCH FIRST!”
I recommend using an online referral service such as Ryde Shopper, Edmunds, Motor Trend, or Cars Direct before physically walking into a car dealership. Their free online price quotes will automatically include any discounts or cash-back incentives currently available in the marketplace. This information will help level the playing field with the dealer and let you know which dealers are willing to be more flexible on price.
Always keep “safety first” in mind. When signaling for assistance, you must be in a conspicuous place that is highly visible and well out of the traffic path. Avoid standing on curves and corners, and wear bright clothing or other items that will attract the notice of pedestrians and vehicles passing by.
If you call for help or not, there will very certainly be a good Samaritan, or two, who see you are trapped and stop to offer assistance. While the majority of individuals have good intentions and will provide you with helpful service, there are a few things you should keep in mind to help protect yourself:
- Request that they make a phone call on your behalf. The next best option for seeking assistance from bystanders is to ask them to go to a cell coverage area and make a call for you. Once they’ve done that, ask them if they can return and give you an update on when you may expect aid to arrive.
- Respectfully request that they bring you some fuel. If another car comes to your aid, the most significant thing they can do is provide you with some gas while you wait with your vehicle.
- Request a ride from them. The final resort should be to request a ride to and from the petrol station. Be extra wary if a stranger stops and asks to give you a ride uninvitedly or if one of the above alternatives is refused and the stranger persists in giving you a ride.
Don’t let your gas tank get to low
It’s not a terrible idea to keep your fuel tank from dropping under a quarter tank. In fact, keeping your gas tank above half or “topped-off” is a smart idea.
A full tank not only protects you from running out of gas, but a low gas tank full of air can cause oxidation and gunky buildup in your tank. This may have a detrimental influence on your vehicle’s fuel economy and engine efficiency in the long run.
Shopping for a new car?
Before visiting a dealership to buy a new car, it’s essential to know the dealer invoice price and what other people are paying for the vehicle in your local area. Otherwise, you won’t know a reasonable price to pay for any car you’re looking to buy.
Learn how to have dealers compete with each other online before ever stepping foot inside a dealership to guarantee you pay the best new car price and avoid any modern-day car dealer scams.
I highly recommend using an online referral service such as Ryde Shopper or Motor Trend. Their quotes will automatically include any discounts or cash-back incentives currently available in the marketplace.