So, Brian and I are taking our first steps toward grownup-land by hopefully buying a new car this week. It feels weird and exciting. Then I think about how most people my age are on their second or third car, and how some people buy new cars when they are 22 or get free new cars when they are only 16 and I feel like a dope again.
Alas. But then I think of the buckets and buckets of cash I have saved over the past nine years of not driving, and I smile.
Anyway, the point of this post is that I WANT ADVICE. Yes, those of you who have purchased cars from dealers, please help a girl out. I just need to know what to avoid, must-dos, stuff like that.
I saw this silly story on Dateline or something a couple years ago that was all about car dealer scams, and I actually TOOK NOTES on what to do during the process. Here is what I learned:
+ finance through a credit union, NOT THE CAR COMPANY.
+ read everything that you sign thoroughly and look for hidden costs! Make sure numbers add up.
+ if you feel you are being fucked with, stand up and make a move for the exit.
+ attempt to bargain on ripoffs like “delivery fee” and so on; they are nothing but a scam.
We’ll do our best, anything else will help.
Oh and since we are getting the incredibly in-demand Prius, I don’t think any negotiations on the sticker price will be possible.
Check out http://www.edmunds.com and http://www.autobytel.com for car buying tips.
If you have a Costco or Sam’s club membership, you can purchase the car through them at club prices rather than haggling with the dealership.
When we get our new car, we’re getting it @ Costco prices through the Costco rep at the dealership — so far I’ve been quoted about $250 over invoice via the Costco methodology. And, at least at the Ford dealership, the pricing would also apply to a car that we ordered — not just one that’s on the lot.
If you have a dealership in mind, check out their website as well — going through their Internet sales rep can sometimes smooth the experience. You can also request quotes through Edmunds & Autobytel — be prepared to get a pile of phone calls the next day from sales folks.
Thanks for those links, they were very helpful. We do not have a Costco membership, and I don’t think they sell cars in our area. But we still plan to get a membership there soon so that we can buy vast quantities of kitty litter.
Everyone has given lots of good advice, but the thing is that it’s kind of hard to get the Prius price to budge. Everyone here wants one. I am seeing quotes for USED Priuses that are only a grand less (at most) than a new one. So we are resigned to paying whatever we can negotiate, which won’t be much lower than sticker. I figure we will make up for it in low fuel costs and the fact that we will not be commuting with this car.
And Jane – don’t forget – tax breaks for Clean Fuel Vehicle…applies to Fed tax and I’m sure, CA tax…
Hey, I’m a long-time reader (since back in the Punk Planet days), but this is the first time I’ve had knowledge that might be helpful. I bought my first new(ish) car last year, and I found that I was able to talk down the interest rate on my loan by going back-and-forth between my bank and the dealer and basically making them compete against each other. I also cut my rate by 1/2 a percentage point by agreeing to electronic payments, which were great for me, anyway, because I am terrible about doing things in a timely manner.
i’ve never bought a brand new car, but i did buy a nearly new car a few years ago and definitely follow the advice of financing through a credit union. they make it sound like you have a good deal but when you look at everything, you realize you got this amazing low payments by them sneaking an extra year on the loan time or something like that. happened to me but i caught it and went with my credit union. sure the payment was a bit higher but at least i’ll pay it off in less time and it’s a lower interest rate. i think the only way it works through a dealer is if you get one of those amazing deals with 0% interest or something.
Priuses for the masses!
It might be advisable to buy a used car. A new car is fine, but is looses a lot of value the moment it is driven off the dealer’s lot. Even cars like the Prius can be found used. Better to let someone else eat the drive-off-the-lot ‘discount’.
If you buy a new car, going way out to the sticks will often yield lower prices. It is often possible to save several thousand dollars at dealerships the Central Valley (Stockton, Sacramento, etc.) That holds true even for in-demand cars. Bay Area prices are inflated to hell and back.
So what is a reasonable price for the car? The Kelley Blue Book (www.kbb.com) has been used as a standard for both buyers and sellers for many, many years.
If you decide to buy used, there are a couple of things that need to be addressed.
It is always a very good idea to go to http://www.carfax.com and check the vehicle’s history. The reports you get there can tell if the car has ever been in an accident, flooded, reported stolen, etc. All you will need is the Vehicle Identification Number (VIN), which is usually located on a little metal tag embedded in the dashboard. The seller can provide this over the phone, so it is not even necessary go and see a car before running a check on it. For $25, you get an unlimited number of reports for 30 days.
If you are seriously interested in a car, then taking it to a mechanic for an inspection should be considered. Offer to give the seller a refundable deposit as collateral. There may be problems that even he/she is not aware of. Or maybe not. The inspections are usually reasonably priced. An ounce of prevention…
Re: Priuses for the masses!
Priuses are in such high demand that their used price is actually very close if not equal to their new price. And they don’t often get sold used since their owners love them — they are usually sold used to make money, in fact. So a used Prius is not something we are interested in. Also again, due to demand, the regional price differential is moot. Just getting to the central valley would probably cancel out the savings in buying from there — we do not own a car presently. Not to mention I would rather my dealer not be hundreds of miles away. But thanks anyway!
Re: Priuses for the masses!
http://www.internetautoguide.com/usedcars/11-int/toyota/prius/
There might be some used ones in SF. In any case, good luck in your quest for automotive nirvana!
The car talk guys say never buy new. But, as you pointed out, that really doesn’t work for the Prius.
My dad says to never make payments, just buy the car outright.
I say break into a Prius and plant some drugs, then buy it outright at the police auction.
The only reason it matters where the purchase dealer is has to do with actually going to get the car. You can get a car serviced at any dealership, although going to a dealer for anything but the car itself is a huge ripoff, and despite what they say, you don’t need to take it to a dealer to protect your warranty. If you can really get the car cheaper by travelling an hour or two, it’s worth it. We had to wait a month for our car, but got it about four weeks sooner than we would have had we used the dealer closest to us.
With a hybrid, you may run into issues where normal honest and reasonably-priced mechanics (dealers are none of these) don’t really know how to deal with the car. So, while you hope that new cars don’t require much maintenance, even a few years down the road, regular mechanics are going to have limited experience with hybrids, so remember that part of your cost overall isn’t just interest, but might be returning to a dealer for repairs, which can literally cost twice as much (or more) as elsewehere.
If you get your loan elsewhere (like a credit union), you are essentially purchasing the vehicle in cash. There may not be much to haggle for over the sticker price, but there is value to them in getting your cash up front, so make sure to ask whether or not there is a cash discount, or if you can have some kind of cash discount. Asking for it won’t likely get you one, but all the delivery fee whacko charges might get tossed in gratis.
And remember, too, that if the car is in such high demand, you give up a certain amount of control over the transaction. They can get all those crappy throwaway fees from someone else, after all, so your business might not be so crucial to them at this moment. Also, remember that these guys do this for a living. If you are really not going to walk out of there without buying the car? If those little fees are not a dealbreaker for you? They know it. If you really want to get rid of certain costs, be prepared to walk away.
I have also found that it isn’t the $100 delivery fee that is the big deal, it’s cars coming in with features you don’t want but have to pay for because that is what is available. When we bought our most recent car, the option package that had the safety features we wanted also had a lot of other crap we didn’t – but the safety features were not available without the other crap in the package. We decided the safety features were worth it to us. Because the car we bought was in high demand and had a long waiting list (we waited more than a month for our car), they were simply not making custom feature lists. So, we ended up paying a chunk more than we would have otherwise. Also, the model they got in with our feature had some kind of fancy car mat added in for another $400 that we didn’t want. But our option wasn’t to turn it down, it was to wait another three to four months for one that came in without the mats, because the one that came in was going to sell, whether it was to us or not.
If you choose to buy a brand new and highly in-demand car for the benefits it has to you, that’s fine, but you do lose a certain amount of control over the purchase, because you lose a significant amount of bargaining power when there is someone right behind you happy to slap down the cash for the car as soon as you leave. The biggest advantage you have is that you are paying cash. And it’s none of the dealer’s business how you are financing the car. If financing comes up, or they suggest making payments on your credit card or anything else, just say “no thank you,” and don’t offer details about where the money is coming from. It actually makes them uneasy not to know things about you, which can help to give you some kind of mental advantage.
We also got money off the sticker price by letting the dealers know we were comparing prices from three dealerships. It ended up being about $1000 off of a $25,000 car, which is pretty good.
Ugh I hate going to dealerships. They’re always so slimy. Just try not to get taken in by the awe and glamour of the car that the dealership will proclaim. If it seems shady, it probably is, leave. Attempt to get them to lower the price, even if you don’t think its possible. It can’t hurt to ask and they usually post the sticker price above what they want to sell it for.
I would add that it helps to go pre-approved from your bank/credit union to the dealer. I bought a new Honda (in 1992) from a dealer thinking I would buy from my credit union, but the dealer came back with a better rate (same terms as the credit union).
I would also research hybrids NOT made by Toyota and tell them you’re considering those other hybrids as well.
Remember that as soon as you give them your Social Security #, they’re doing a credit check on you to then know how to “play” you financing wise. They’ll tell you it’s to “just do a background check, haha, just to make sure you’re not wanted, haha…” but they don’t care if you’re a criminal, unless you can’t PAY….and they can then play you payments wise.
Good luck, you guys.
from jlist.com:
“Japan has an annual tax on cars that’s
based on engine size that makes a lot of sense — if you drive a car with a
huge, inefficient engine, you’ll pay around $800 a year, but for drivers
with small, efficient engines the tax is just $30, and hybrid cars are
free.”