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8 Posts
Ok first post here so bear with me. I recently bought my Mazda Speed3. When I was shopping I was doing my best to figure out how to get taken at the dealership. I learned alot and made a few mistakes along the way, and now would like to share the finer points with you.
First there are realy only two times you should physicaly be at a dealership. When you want to test drive a certain make of a car so you can make sure you enjoy the vehichle, and again when you are ready to purchase. The first time dont talk to the dealer about anything other than the spec's of the car. Let him know your just trying to get an idea of whats on the market and you still have some time before you want to purchase. Ask if you can take the car out for a few hours to get a feel for it. You typical spin around the block isnt going to tell you much about a car you need to drive it for a while. Most dealers will happily let you. Now he's going to need a copy of your license. Dont give you physical license to him instead give him a copy you have already made witht he words "I do not authorize a credit check, For Use Only at "Dealer Name Here" for test driving purposes" Written on it in large letters. Some dealers like to run your credit while your taking it out on a spin and this hurts your credit by an average of 5 points per check. Some more nefarious dealers will run you against up to ten different lenders. I dont know about you but I dont want that kind of hit for nothing. After you get back from your test drive retrieve your copy from them.
Second now that your starting to narrow in on what kind of vehichle you want its time to start looking into financing. I highly recommend that your first step here is to check your credit report. I used freecreditreport.com (Liars its not free) but none the less its still a great tool. There are at least 3 good reasons to use a site like this. First you get your credit score from all 3 major agencies. Second you get to look over everything on your report and can start a dispute if somethings wrong. Perhaps a stolen identity? (yikes!) Third it will let you know, via email, everytime something changes on your credit. Remember the nefarious dealer from before? If he checks your credit you will know and since you kept your copy you can dispute it.
Next you want to check with three different lenders. First apply with your bank or credit union. Credit Unions will typicaly give you the better rate. Then check with an online lender I suggest e-loan or capitaloneautobuying.com. The last place you will check is at the dealer the day you buy the car. There can realy be some huge differences here. When I checked with my bank they offered me 13% interest! Capital One on the other hand gave me 6.66%. The dealership gave me 6.66% as well (more on that later). Now if I would have stuck witht he first offer of 13% I would have paid an extra 4 grand in interest.
Third find out how much your trade in is worth. This can be tricky because dealers can vary widly on this. So dont trust what they say. Instead go to http://www.autocalculator.org/MileageAdjustor.aspx and get a rough estimate for yourself. If the dealer is close to this then your doing ok. If not then dont be afraid to walk away. Its your money and you can spend it anywhere you so choose. Your doing the dealer a favor by spending it with him. Dont let him think hes doing you a favor by taking it.
Fourth now that we have some figures in our head its time to shop for a car. Ahh the dreaded dealership haggling. Where you get to go to a dealership and spend hours of your day for several days until a salesman finaly breaks your will and you buy just because you cant take it anymore. Heh no were not going to play that game. Instead grab your trusty keyboard and your off to the wide world of online shopping. Yahoo Autos, BeepBeep.com, cars.com, autobytel.com, autotrader.com just to name a few. Hit these places and hit them hard. New or Used cars in any make and model. If nothing else you will come away knowing the rough price of whatever the car of your dreams may be.
Now if we arent looking at a new car then you should check out the manufactures web site of the car you are looking for. Check to see what specials they have for that month. 0% financing? 3k in dealer incentives? This is all money in your pocket that some dealers will try to instead put in their own. Example I bought a new 2008 Mazda Speed3 Sport. I paid 19k for mine. The reason why is that mazda had a 3k dealer incentive on the 08 models that month so they could move out the old stock. Well one of the dealers tried to sell me the same car for 25k and refused to even admit those incentives were there. Invoice on this car is about 20.5 to 21k. So we will say he paid 21k for it. So he was making 4k profit plus another 3k in incentives. Thats 7k he tried to make off that sale! Heh no thank you, and I walked away.
Step five. Now we start calling dealers in our area. Go to yahoo.com type "mazda dealer in "your city here" and bingo all the numbers at your finertips. Dont be afraid to drive a ways to get the best deal. If I was 2-3 hours away and told you I would give you 5 grand if you would come get it from me, wouldnt you jump on the next thing moving to get it? Ask them point blank whats the best deal you can give me on whatever car it is you want. You want the OUT THE DOOR price. You dont need to haggle the other dealerships will do that for you. Now they might ask about trade in, or how much you want your payments to be, or what do you want to pay for the car. Dont answer any of this. Its all a trap. All you want to know is how much they can get you out the door for. When they would ask me how much I wanted to pay my response was always "as little as possible" Write down the dealership, phone number, who you spoke with and what the offer was and move on the next one. Keep going till you have them all. Now look at your list and find the best price. Now call all the other dealerships back and ask if they can beat that price. Rinse repeat until you have them at the lowest offer you can get. A tool you want to use during this process is http://www.bankrate.com/brm/calculators/autos.asp this is an interest calculator. It can give you your monthly payments as well as tell you how much total interest your going to pay for the car.
BEWARE THE BAIT AND SWITCH! So a dealer has offered you a price that is 3 grand below anybody else's offer. This may be a trap. Some dealers are just trying to get you there. When you show up they will say "Aww sorry we just sold it, but there is this other car for 5 grand more. Lets look at it." SO to protect yourself ask the dealer to send you a "buyers order" for the car. If he stalls or cant then you probably just beat the scam. Also if he does send and your ready to go down and buy it, ask him to send you an e-mail saying he will hold it till you get there. If you get there and its gone get back in your car and call the better buisness burea when you get home. Yeah you made the trip for nothing but at least hes going to get some shit for it too. Now on the other hand if he does send you the buyers order but he's like 3 hours away and you dont want to take the chance call the other dealerships that are closer and send them the buyers order. 99% of the time if you have that they will beat that price just to say "they will not be undersold"
Step 6. Ok so you have found your perfect car. You've got the price where you want. Youve got the interest rate you want. You've got your buyers order and its time to pull the trigger and head down to the dealership and buy your car. First things first. Test drive the car. Look it over and make sure you like it. Dont worry about acting cool you've already done your haggling. You know what your paying for this car and you have a loan already set up. If everything is good then start the process of the paperwork.
Step 7. Or as I like to say the step I messed up on. Since you have already gotten a loan from either your bank or an online provider you only have one left to check with and thats the dealership. Tell them you already have financing from another bank and would liek to see if they can beat it. They are going to ask you what the rate is so that they can try. DONT TELL THEM THE RATE!!!!! Just say that doesnt matter I just want to see what rate you can give me. I told them the rate and they came back to me with the EXACT SAME RATE. And they wouldnt budge on it cause they knew I couldnt beat it. Soon as I saw that I was sick to my stomach. Oh maybe my loss will be your gain. Also while finalizing the paperwork they are going to offer you gap insurance, extended warranty, and probably some service package that the dealership takes. Gap insurance in my opinion is a must it protects you in case you total the car. Your regular insurance is only going to cover what the car is worth. If you owe more than what its worth then you pay the difference. If your buying a new car as soon as you drive it off the lot your going to owe more than its worth. Its about $250 and could save you thousands. And you can only get it at the time of purchase. Now extended warraties on the other hand decline. Take note of the options but after you buy your car check with other dealerships in the area and see if they offer one cheaper. Most times they will try and beat the one you had been offered. Finaly the special service package. You cant realy shop around to much on these so look it over. Some times they will be well worth the money. Other times its a complete rip-off. They might also try and sell you aftermarket accessories say add a nav package or sun-roof. NEVER take those. 99% of the time you can buy those somewhere else for a whole lot cheaper. If you cant beat there price you can always go back and have them do it later.
Step 8. Now your going to sign what seems like a hundred different forms. Your probably going to be a bit tired at this point and anxious to drive your new baby. Dont lose your focus here. You can screw this up and negate everything you did up until now. Read every line of every piece of paper they ask you to sign. Have them explain any part that you dont understand. If something still sounds fishy ask if you can have a copy of it before you sign and go have a lawyer check it out. If you cant afford that then just have friends an family look at the confusing parts. Most of it is stupid simple once you read it. If its written in a very confusing manner then you can take that as a sign that something might be up. Make sure you look on the back of all of it before you sign too. When your happy sign and move on the next one.
Step 9. Drive Your New Baby Home!!! be happy knowing that you got what is probably the best deal you can get.
Final thought. Buy your car on the last day of the month. The reason for this is right before you head out to the dealer that has given you the best price. Call the other dealers one last time. Tell them your buying today and want to know their best out the door price. If they come back with something higher than what youve been offered tell them and see if they can beat it. The reason you do this last check is because if a dealership hasnt made its numbers yet then they are a whole lot more giving in price. I actualy had my wife make these calls while I was driving to one dealership. Half way through the drive I was turning around to head to a different one that was saving me even more money.
Well if you managed to read this whole thing then I hope you learned something. Good luck with your future purchase, and ZOOM ZOOM...
*edit* Here is a great wealth of information that goes into a ton more detail than I did. I actualy got alot of the information I posted here from there.
http://www.bankrate.com/brm/green/auto/basics-toc.asp?caret=1
First there are realy only two times you should physicaly be at a dealership. When you want to test drive a certain make of a car so you can make sure you enjoy the vehichle, and again when you are ready to purchase. The first time dont talk to the dealer about anything other than the spec's of the car. Let him know your just trying to get an idea of whats on the market and you still have some time before you want to purchase. Ask if you can take the car out for a few hours to get a feel for it. You typical spin around the block isnt going to tell you much about a car you need to drive it for a while. Most dealers will happily let you. Now he's going to need a copy of your license. Dont give you physical license to him instead give him a copy you have already made witht he words "I do not authorize a credit check, For Use Only at "Dealer Name Here" for test driving purposes" Written on it in large letters. Some dealers like to run your credit while your taking it out on a spin and this hurts your credit by an average of 5 points per check. Some more nefarious dealers will run you against up to ten different lenders. I dont know about you but I dont want that kind of hit for nothing. After you get back from your test drive retrieve your copy from them.
Second now that your starting to narrow in on what kind of vehichle you want its time to start looking into financing. I highly recommend that your first step here is to check your credit report. I used freecreditreport.com (Liars its not free) but none the less its still a great tool. There are at least 3 good reasons to use a site like this. First you get your credit score from all 3 major agencies. Second you get to look over everything on your report and can start a dispute if somethings wrong. Perhaps a stolen identity? (yikes!) Third it will let you know, via email, everytime something changes on your credit. Remember the nefarious dealer from before? If he checks your credit you will know and since you kept your copy you can dispute it.
Next you want to check with three different lenders. First apply with your bank or credit union. Credit Unions will typicaly give you the better rate. Then check with an online lender I suggest e-loan or capitaloneautobuying.com. The last place you will check is at the dealer the day you buy the car. There can realy be some huge differences here. When I checked with my bank they offered me 13% interest! Capital One on the other hand gave me 6.66%. The dealership gave me 6.66% as well (more on that later). Now if I would have stuck witht he first offer of 13% I would have paid an extra 4 grand in interest.
Third find out how much your trade in is worth. This can be tricky because dealers can vary widly on this. So dont trust what they say. Instead go to http://www.autocalculator.org/MileageAdjustor.aspx and get a rough estimate for yourself. If the dealer is close to this then your doing ok. If not then dont be afraid to walk away. Its your money and you can spend it anywhere you so choose. Your doing the dealer a favor by spending it with him. Dont let him think hes doing you a favor by taking it.
Fourth now that we have some figures in our head its time to shop for a car. Ahh the dreaded dealership haggling. Where you get to go to a dealership and spend hours of your day for several days until a salesman finaly breaks your will and you buy just because you cant take it anymore. Heh no were not going to play that game. Instead grab your trusty keyboard and your off to the wide world of online shopping. Yahoo Autos, BeepBeep.com, cars.com, autobytel.com, autotrader.com just to name a few. Hit these places and hit them hard. New or Used cars in any make and model. If nothing else you will come away knowing the rough price of whatever the car of your dreams may be.
Now if we arent looking at a new car then you should check out the manufactures web site of the car you are looking for. Check to see what specials they have for that month. 0% financing? 3k in dealer incentives? This is all money in your pocket that some dealers will try to instead put in their own. Example I bought a new 2008 Mazda Speed3 Sport. I paid 19k for mine. The reason why is that mazda had a 3k dealer incentive on the 08 models that month so they could move out the old stock. Well one of the dealers tried to sell me the same car for 25k and refused to even admit those incentives were there. Invoice on this car is about 20.5 to 21k. So we will say he paid 21k for it. So he was making 4k profit plus another 3k in incentives. Thats 7k he tried to make off that sale! Heh no thank you, and I walked away.
Step five. Now we start calling dealers in our area. Go to yahoo.com type "mazda dealer in "your city here" and bingo all the numbers at your finertips. Dont be afraid to drive a ways to get the best deal. If I was 2-3 hours away and told you I would give you 5 grand if you would come get it from me, wouldnt you jump on the next thing moving to get it? Ask them point blank whats the best deal you can give me on whatever car it is you want. You want the OUT THE DOOR price. You dont need to haggle the other dealerships will do that for you. Now they might ask about trade in, or how much you want your payments to be, or what do you want to pay for the car. Dont answer any of this. Its all a trap. All you want to know is how much they can get you out the door for. When they would ask me how much I wanted to pay my response was always "as little as possible" Write down the dealership, phone number, who you spoke with and what the offer was and move on the next one. Keep going till you have them all. Now look at your list and find the best price. Now call all the other dealerships back and ask if they can beat that price. Rinse repeat until you have them at the lowest offer you can get. A tool you want to use during this process is http://www.bankrate.com/brm/calculators/autos.asp this is an interest calculator. It can give you your monthly payments as well as tell you how much total interest your going to pay for the car.
BEWARE THE BAIT AND SWITCH! So a dealer has offered you a price that is 3 grand below anybody else's offer. This may be a trap. Some dealers are just trying to get you there. When you show up they will say "Aww sorry we just sold it, but there is this other car for 5 grand more. Lets look at it." SO to protect yourself ask the dealer to send you a "buyers order" for the car. If he stalls or cant then you probably just beat the scam. Also if he does send and your ready to go down and buy it, ask him to send you an e-mail saying he will hold it till you get there. If you get there and its gone get back in your car and call the better buisness burea when you get home. Yeah you made the trip for nothing but at least hes going to get some shit for it too. Now on the other hand if he does send you the buyers order but he's like 3 hours away and you dont want to take the chance call the other dealerships that are closer and send them the buyers order. 99% of the time if you have that they will beat that price just to say "they will not be undersold"
Step 6. Ok so you have found your perfect car. You've got the price where you want. Youve got the interest rate you want. You've got your buyers order and its time to pull the trigger and head down to the dealership and buy your car. First things first. Test drive the car. Look it over and make sure you like it. Dont worry about acting cool you've already done your haggling. You know what your paying for this car and you have a loan already set up. If everything is good then start the process of the paperwork.
Step 7. Or as I like to say the step I messed up on. Since you have already gotten a loan from either your bank or an online provider you only have one left to check with and thats the dealership. Tell them you already have financing from another bank and would liek to see if they can beat it. They are going to ask you what the rate is so that they can try. DONT TELL THEM THE RATE!!!!! Just say that doesnt matter I just want to see what rate you can give me. I told them the rate and they came back to me with the EXACT SAME RATE. And they wouldnt budge on it cause they knew I couldnt beat it. Soon as I saw that I was sick to my stomach. Oh maybe my loss will be your gain. Also while finalizing the paperwork they are going to offer you gap insurance, extended warranty, and probably some service package that the dealership takes. Gap insurance in my opinion is a must it protects you in case you total the car. Your regular insurance is only going to cover what the car is worth. If you owe more than what its worth then you pay the difference. If your buying a new car as soon as you drive it off the lot your going to owe more than its worth. Its about $250 and could save you thousands. And you can only get it at the time of purchase. Now extended warraties on the other hand decline. Take note of the options but after you buy your car check with other dealerships in the area and see if they offer one cheaper. Most times they will try and beat the one you had been offered. Finaly the special service package. You cant realy shop around to much on these so look it over. Some times they will be well worth the money. Other times its a complete rip-off. They might also try and sell you aftermarket accessories say add a nav package or sun-roof. NEVER take those. 99% of the time you can buy those somewhere else for a whole lot cheaper. If you cant beat there price you can always go back and have them do it later.
Step 8. Now your going to sign what seems like a hundred different forms. Your probably going to be a bit tired at this point and anxious to drive your new baby. Dont lose your focus here. You can screw this up and negate everything you did up until now. Read every line of every piece of paper they ask you to sign. Have them explain any part that you dont understand. If something still sounds fishy ask if you can have a copy of it before you sign and go have a lawyer check it out. If you cant afford that then just have friends an family look at the confusing parts. Most of it is stupid simple once you read it. If its written in a very confusing manner then you can take that as a sign that something might be up. Make sure you look on the back of all of it before you sign too. When your happy sign and move on the next one.
Step 9. Drive Your New Baby Home!!! be happy knowing that you got what is probably the best deal you can get.
Final thought. Buy your car on the last day of the month. The reason for this is right before you head out to the dealer that has given you the best price. Call the other dealers one last time. Tell them your buying today and want to know their best out the door price. If they come back with something higher than what youve been offered tell them and see if they can beat it. The reason you do this last check is because if a dealership hasnt made its numbers yet then they are a whole lot more giving in price. I actualy had my wife make these calls while I was driving to one dealership. Half way through the drive I was turning around to head to a different one that was saving me even more money.
Well if you managed to read this whole thing then I hope you learned something. Good luck with your future purchase, and ZOOM ZOOM...
*edit* Here is a great wealth of information that goes into a ton more detail than I did. I actualy got alot of the information I posted here from there.
http://www.bankrate.com/brm/green/auto/basics-toc.asp?caret=1
