How To Buy A Car

How To Buy A Car

My first advice is to buy a car you like. Seriously, because I’ve owned nine cars and I didn’t like all of them, just because a car is a deal or even really practical, doesn’t mean you will like it.

I’m not saying buy a car you can’t afford just because you really like it, but try not to compromise too much, you’re going to spend a lot of time in this car.

Second, test drives are not enough to see if you really like a car.  Even dealerships with “test tracks”, that’s not every day driving and living.

Yes always test drive a car to make sure there are no obvious issues (especially a used car), but every time I test drove I car, I felt pressure and was more concerned not to crash it.

My advice to really try a car out is to rent one if possible. And rent it for several days, take the car to work, go to the store, pick up your kids, do regular stuff and really see if it works for you.

Or what I’ve done is ask a good friend or relative to drive or borrow their car if they have a car you like. Your comfort level will be better, you can have more time with it (than a test drive), and they can give you all kinds of insight on the car.

Now the big thing is to do your homework on the car, know the options, and check out any websites (especially owner forums), reviews and prices. That way you know what you want and when a dealer tries to railroad you into a car (and they might), you know what that model is.

I spent a short time last summer as a new car salesman, despite my love & knowledge of cars, selling new cars is not for me but I learned a lot.

Buying a car is a numbers game, salesmen will ask you about monthly payment but know what a car costs and know your credit and what your budget is.

Most new cars don’t pay sales guys a lot (i.e. mini deals), unless there’s an incentive, the money is in warranties and used cars.

The car should come with some kind of basic warranty and you should buy an extended warranty if the car is newer (say within 3-4 years), other than that unless you plan to keep this car forever think hard about any other warranty they offer you.

Some dealers offer paint protection, interior protection, pre-paid service work and other upgrades, especially on trucks and SUV’s. Like I said, if you will keep this car a long time, maybe but also realize this will raise your monthly payment.

Speaking of monthly payment, you are going to have to make that payment for a while, some dealers have financing for new car loans for over 6-7 years.

Think about that, the car may not be worth anything close to the loan by then (it’s called being “upside down”), and trading the car in at that point causes “negative equity”.
Which means the next car’s loan will reflect that money left over from the first car, hence a bigger note. Unless you have a large down payment.

Biggest thing in the car business is the proverbial “Cash is King”, the more you put down or can pay it all in cash gives you power. Negotiating power, choosing power & power over your loan if you choose to take one.

If you come to dealership with a low down payment (under 10%), with an upside down trade in you are at the mercy of the salesman and they may simply pick a car out for you and then your choice of financing is limited.

If you come in and can put more than 25% down or more, you can choose your car, more banks will want to finance you (at better rates), and your overall deal will be better.

I have no secrets to negotiating a deal, car salesman usually sell cars five days a week (9 or 12 hour shifts), and they know the cars, options packages and what you qualify for.

If you know all of that and have cash, the playing field is almost level. Virtually every car deal has to be approved by a sales manager and then goes to financing, you have to go with what’s available on that. But feel free to leave if you haven’t signed anything.

Now there are car buying services like True Car or Consumer Reports that tell you what people are paying and get you in the door. What dealers do to work around that is get you to buy more car, meaning options so be aware.
That’s for new cars in used cars you are on your own, so know your prices, what a car is worth and what you are willing to pay.

Most dealers have “internet managers” who handle emails of people who ask about prices and want quotes. Their job is to get you in the dealership with a “good price” so be aware of that too.

Also for used cars, call ahead to the dealership to make sure the car you want is still here and then make an appointment to see it that day, you don’t want to get caught in “bait & switch”.

They may ask you if you can pay $ 500 a month and you say sure but if the car is $ 22,000 and you have good credit and a decent down payment, that’s a bad deal.

Know the interest rates, get pre-approved if you can through your bank or credit union but be careful handing that check to the dealer.

In some cases the dealer will want to “prequalify you” meaning run your credit (and too many credit inquiries hurts your score), and have you do a finance application, possibly even prior to a test drive. They want to see what kind of car to put you in.

You should be able to test drive without going that far, just have your driver’s license and proof of insurance.

Also you may have your heart set on one car and the salesmen will want you to try something else, this is when having cash counts. If you really want a Chevrolet Cruze and they want you to look a Chevrolet Malibu (which costs more), then walk out.

Lastly there are used car options such as buying a rent a car or one of the used car superstores that have “fixed pricing”, meaning the price on the sticker is what you pay. It’s more cut and dry and price might be slighter higher but a less intimidating atmosphere, check them out too.

Remember this will be your car, your payment and your credit, so own it and get the best you can get.

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Filed under: Cars

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