New Car Buyer’s Guide for 2023
Car Prices are High but You Can Still Get a Deal
Buying a new car should be fun and exciting, not stressful and frustrating. Next to purchasing a home, buying a new car is the second most expensive thing most people will purchase in their lifetime. My new car buyer’s guide will help you through the new car buying process.
The average person buys a car about every three years and believes they’re experts at negotiating. Car dealers are professional players; how can you expect to win a game if you don’t know the rules?
Table of Contents
- How to buy a new car
- Car selling hasn’t changed; car buying has
- Dealership reputation is important
- Attitude is everything
- Additional new car buying tips
New Car Buyer’s Guide
New car dealerships are always in fierce competition and will do anything to keep you from buying a vehicle from the “other guy.”
Knowing this and using competition to your advantage will guarantee you get a new car and a great deal.
Getting the lowest price is only one aspect of ensuring you receive a great deal. There are several areas during the new car buying process where a dealer can take advantage of you.
Follow the five steps below to maximize your savings and guarantee you a great deal when buying your next new vehicle. These tips will allow you to find the dealer with the most significant discounts and get the best price on a new car, no matter the demand for new vehicles in the marketplace.
NOTE: If you don’t have time, need to buy a new vehicle right now, or want a ”dumbed-down” guide on buying a new car, please refer to my step-by-step new car buying cheat sheet on how to buy a new vehicle and avoid dealer scams.
Five Steps to Buying a New Car
Below are the five essential tips when buying a new car from a dealership. They will help you find the best deals and pay the lowest price for a new car in your local area.
- New Car Quotes – Research vehicles online and get several free, no-obligation quotes to get a feel of the market and demand for the car you’re considering.
- Negotiate With Dealerships By Email – When you work dealerships against each other by email or phone, guarantee you pay the lowest available price and avoid haggling with a salesperson.
- Get a New Car Loan – Arrange financing before contacting a dealer to protect yourself from costly car dealer finance scams.
- Extended Auto Warranty – Request a couple of free online quotes to use as leverage to negotiate a better warranty price with a dealership.
- Car Insurance – Check insurance rates on the vehicle you’re buying so you can budget the amount into your monthly budget.
You can complete the above steps from the privacy of your computer. Once completed, they will provide the information you need to level the playing field and protect you from paying too much for your next new vehicle. The only thing left to do is to take a test drive of the car and sign the paperwork.
Timing is Everything
If you buy a new car at the right time, the dealer may sell you a vehicle at a deeply discounted price or even well below cost.
Here are a few reasons why a dealer may sell a new car below their actual new car cost:
- The vehicle has been on the lot too long
- The new car may be an undesirable color or not desirably equipped
- Due to age, the new car may be costing the dealer money in interest and fees
- The dealer may be one or two sales away from a sales quota that pays a significant bonus
If you inquire about the right vehicle at the right time, you may be on the receiving end of a once-in-a-lifetime deal; you just never know.
Car Buying Hasn’t Changed; Car Buying Has
The way dealerships sell cars hasn’t changed much over the past decade. However, the way people buy cars has.
A few short years ago, if you wanted to buy a new car. You’d have to waste all day visiting one dealership after the next, spending endless hours looking at vehicles and haggling with salespeople in the hopes of receiving a good deal.
“The Internet Has Changed The Way People Buy New Cars”
Other than visually inspecting and test-driving the vehicle, you can do 95% of your new car shopping online from the comfort of your personal computer.
More and more people are using the internet and its vast wealth of information to research and compare new vehicles before visiting a dealership.
Savvy car buyers understand they can do their pre-shopping online, avoid the dealership, and not have to deal with the frustration and aggravation of haggling with salespeople and their managers.
New Car Shopping on Your Mobile Device
Your smartphone or mobile device can perform any task that your desktop computer can.
You can research and compare vehicles or even get new car price quotes sent to you on your smartphone, tablet, or iPad.
You can do your new car research online anywhere you have an internet connection.
Knowledge is Power
The uncertainty of the price they will pay for the goods causes some customers to hesitate as they visit car dealerships.
Customers don’t anticipate having to haggle over the price of a gallon of milk with a grocery store. However, they do expect to haggle over automobile costs.
Understanding some of the financial facets of the car-selling industry may help you better negotiate some of the more difficult purchasing conversations.
Please continue to read more about what car dealer’s don’t want you to know and how dealerships make money below to help you navigate the car buying process.
What New Car Dealers Don’t Want You to Know
Car dealers don’t want you to know that new cars are commodities. They must pay the same price for a new vehicle from the manufacturer. A dealer in Seattle will pay the same price as a dealer in Miami. It’s ultimately up to the individual dealer on how much they’re willing to discount the cost of the car.
If you live in an area where nine dealerships are selling the same vehicle brand, you’ll want to get more than just one or two prices from a few dealers. You will want to inquire with each dealer to determine which will be the most flexible with discounting the vehicle.
Car dealers know bright car buyers shop online; they also understand that if they compete with other dealers in the area, they must be aggressive when pricing their vehicles online.
How Dealers Make Money Selling New Cars
Receiving the lowest new car price is not your only goal when buying a new car.
In several areas, a dealer may attempt to make an excessive profit from you when selling you a car. Here are a few:
- The list price of the vehicle
- Lowballing or undervaluing the trade-in
- Adding interest rate points to the loan
- Insurance and maintenance packages
- Additional fees or bogus charges
- Dealer added options
- Extended auto warranties
- Manipulate the cash down payment
A dealer can secretly manipulate one or more of these areas during negotiating. For example, if you focus on one area, such as the “list price” of the car. The dealer may lower it and increase his profit in a different location, such as “undervaluing your trade” or “adding points” to your interest rate. Dealers are experts at this game and have fine-tuned their skills with decades of experience.
As you move to other areas, the dealer will play “cat and mouse” until you get tired and make a costly mistake.
This is why dealers and their salespeople drag out the car buying process hoping to wear you down.
Dealership Reputation is Important
Since there have been new cars to sell, the term “car salesperson” has come to mean someone dishonest. Whether justified or not, the profession has a bad image; in the past, it probably had a good reason.
Unreliable car salespeople would trick unsuspecting customers into buying vehicles with hidden issues, paying high costs, or adding needless extra services.
Nowadays, purchasing a car is much easier than a few years ago. First, automobile consumers are considerably better educated than they formerly were. Secondly, many car dealers have discovered that taking advantage of clients doesn’t help them establish a successful company.
You may choose a dealership with a solid track record regarding how it treats consumers, both as purchasers and as clients of the service department, now that you are more aware of how a dealership generates its money. Please read my article on how to choose a reputable car dealership to read more on dealer reputation.
Attitude is Everything
More flies will be caught with honey than vinegar, especially when buying a new car.
Even though purchasing a new automobile might be stressful and unpleasant, keeping a positive outlook and being composed will help.
Although it may be the salesperson’s duty to be kind to you, if you show them some appreciation in return, they’ll be more inclined to assist you in securing a fantastic offer.
Additional New Car Buying Tips
Additional new car buying tips and advice will save you time, money, and frustration when purchasing a vehicle from a dealership.
- Do your new car shopping online first
- Be prepared before visiting a dealership
- Gather new car price quotes from several local dealerships
- Keep it simple at the dealership
- Know how much your trade-in’s worth before the dealer appraises your car
- Do not bring up your trade-in too early in the process
- Get a preapproved car loan before car shopping
- Have at least 25% cash down towards the purchase price of the vehicle
- Be cautious of six and seven-year term extensions
- Don’t buy a car you cannot comfortably afford
- Beware of overpriced dealer add-ons