Car buying basics--walk me through please

[maize]

I've only once bought a car from a dealership, and that was an inexpensive used car about 14 years ago. We had the money and paid for it outright.

 

Now we're looking to buy a new-ish full-size van, and we're going to have to finance. I'm clueless and don't know what I'm doing. Someone in the other car thread mentioned using the USAA car buying service, we're members so if that is a good deal I can do that but I admit to not really understanding how it works.

 

I have an appointment to go drive some vans on Saturday.

 

I really don't want to be doing this, I hate spending large amounts of money and I hate shopping in general.

[Carol in Cal.]

You get the amount the dealer pays from Consumer Reports.

You avoid options--the markup on those is bad.

 

You negotiate UP from the dealer price rather than DOWN from the utterly fake sticker price.

 

Beware of the good cop/bad cop strategy, very common with dealerships.  

 

Be ready to leave if you don't get your price.  Nicely though.  Say, "On a hot day in July when you need to sell one more car to make your quota, give me a call and match this price, and if I don't have a new car yet, I'll buy yours."  

[Guest]

Be ready to walk away. That is the most important thing. My dh did this on our first mutual purchase. I about had a stroke!!! This wasn't NICE!! But two days later they called back and offered the car at the price we had stated. And my dh said something like , "Well, OK. IF you throw in the floor mats." I'm having another stroke--but they did it. It was an eye-opening adventure for me. This is BUSINESS, not RELATIONSHIP. They--all people who are trying to separate you from your money--use relationship words to confuse you. Don't be confused.

 

And never ever "fall in love" with the object of a business deal. Not a house, a car, a dress, or a steak. You don't NEED it. All the bad decisions I have made in my life have been based in fear or in inappropriate understandings of the situation. A thing is a thing. It has a price. Love people. They are priceless.

[Catalytic]

Have your loan BEFORE you go shopping.  Navy Federal tends to have cheaper rates than USAA, if you're not a member, give them a call.  USAA will give you the paperwork online to buy the vehicle after the apply for a loan with them, you just print it out (they'll also mail it, if you prefer that), NavyFed mails it.  Dealers make good money off the interest rate they sell you, know your credit score/history before you go if you are going to try financing through them.

 

Know what you are willing to pay for the vehicle.  If you're financing through them, do not bargain a monthly payment, look at the term of the loan and the interest rate.  If they won't tell you that up front, walk away.  (Seriously, save yourself a lot of headaches and go in with your loan.)  USAA automatically approves you for 25% more than you ask for, so you have some dicker room if needed.  (Mind you, that is if USAA approves your loan request, the loans aren't automatically approved, but I believe the leeway part is, and I'm pretty sure that is 25% but you can call and ask them.)  

 

I have not used their car buying service to actually buy a car (USAA's) but I used it when I was *considering* buying a new car back in November.  I wanted an all-wheel drive Honda Odyssey.  Tried to price it out through USAA's thing, couldn't find AWD as an option.  Let them send it through anyway.  About 8 local dealers started calling me within SECONDS of hitting submit.  They have not stopped calling yet...7 months later.  Mind you, I found out from the first one that the Odyssey doesn't come in AWD, and that ceased my possible vehicle purchase immediately.  If I hear how awesome and BIG the 2016 Pilot is one.more.freaking.time. I may have to go beat up a salesman, seriously.  (All of their numbers go straight to voicemail on my cell, thankfully!)

 

Absolutely be prepared to walk away.  Knowing your price beforehand helps a lot.  I am upfront with salespeople, I haven't even test driven the last two vehicles before I bought them.  I look the vehicle over, if it suits what my need is, I tell them to give me their best offer, and I tell them flat out they only get one chance.  I make sure to tell/show them my blank check from the bank for the purchase, or let them know I'm paying cash, so they know I'm serious.  I have given a deadline of when I was leaving and going to Dealer B to see what they could do for me (I usually give them 10 minutes to come back with bottom line, unless the dealership is super busy)

 

And, I do what I say.  I NEVER tell them how much I am willing to pay, they either meet my price or they don't.  If they don't, I leave.  My last purchase, I was paying cash, it was a GREAT deal, even if they didn't dicker, but it didn't have floor mats, and I have kids.  Since the interior was a light color, there was no way I was going without floor mats.  I gave the guy 15 minutes to give me bottom line, and went and sat in my vehicle.  He came out and their bottom line was a couple thousand cheaper than what I'd been willing to pay, told him I'd be happy to make a deal for that price if they included floor mats, as well.  He hemmed and hawed about the floor mats for a second, I cranked my van, and put it in reverse.  He said they'd include the floor mats.  I went in, signed the paperwork, and wired the money to their account.  I was at the dealer about 45 minutes total.

 

[Guest]

Have your loan BEFORE you go shopping. Navy Federal tends to have cheaper rates than USAA, if you're not a member, give them a call. USAA will give you the paperwork online to buy the vehicle after the apply for a loan with them, you just print it out (they'll also mail it, if you prefer that), NavyFed mails it. Dealers make good money off the interest rate they sell you, know your credit score/history before you go if you are going to try financing through them.

 

Know what you are willing to pay for the vehicle. If you're financing through them, do not bargain a monthly payment, look at the term of the loan and the interest rate. If they won't tell you that up front, walk away. (Seriously, save yourself a lot of headaches and go in with your loan.) USAA automatically approves you for 25% more than you ask for, so you have some dicker room if needed. (Mind you, that is if USAA approves your loan request, the loans aren't automatically approved, but I believe the leeway part is, and I'm pretty sure that is 25% but you can call and ask them.)

 

I have not used their car buying service to actually buy a car (USAA's) but I used it when I was *considering* buying a new car back in November. I wanted an all-wheel drive Honda Odyssey. Tried to price it out through USAA's thing, couldn't find AWD as an option. Let them send it through anyway. About 8 local dealers started calling me within SECONDS of hitting submit. They have not stopped calling yet...7 months later. Mind you, I found out from the first one that the Odyssey doesn't come in AWD, and that ceased my possible vehicle purchase immediately. If I hear how awesome and BIG the 2016 Pilot is one.more.freaking.time. I may have to go beat up a salesman, seriously. (All of their numbers go straight to voicemail on my cell, thankfully!)

 

Absolutely be prepared to walk away. Knowing your price beforehand helps a lot. I am upfront with salespeople, I haven't even test driven the last two vehicles before I bought them. I look the vehicle over, if it suits what my need is, I tell them to give me their best offer, and I tell them flat out they only get one chance. I make sure to tell/show them my blank check from the bank for the purchase, or let them know I'm paying cash, so they know I'm serious. I have given a deadline of when I was leaving and going to Dealer B to see what they could do for me (I usually give them 10 minutes to come back with bottom line, unless the dealership is super busy)

 

And, I do what I say. I NEVER tell them how much I am willing to pay, they either meet my price or they don't. If they don't, I leave. My last purchase, I was paying cash, it was a GREAT deal, even if they didn't dicker, but it didn't have floor mats, and I have kids. Since the interior was a light color, there was no way I was going without floor mats. I gave the guy 15 minutes to give me bottom line, and went and sat in my vehicle. He came out and their bottom line was a couple thousand cheaper than what I'd been willing to pay, told him I'd be happy to make a deal for that price if they included floor mats, as well. He hemmed and hawed about the floor mats for a second, I cranked my van, and put it in reverse. He said they'd include the floor mats. I went in, signed the paperwork, and wired the money to their account. I was at the dealer about 45 minutes total.

This.

And I repeat: this is business. Not a relationship.

[Pawz4me]

I'd do a lot of online research first.

 

As mentioned above, Consumer Reports' car buying report is well worth the cost.

 

I would NOT recommend automatically getting a loan through your bank or credit union before you check to see what the manufacturer is offering. If your credit score is good it will often be a very, very good rate that will be unbeatable by a bank or credit union. Like 0 to 0.9 percent interest. Of course make sure to check if there are any fees involved wherever you go for a loan.

 

Bargain on the price of the car, not on the monthly payment amount.

 

And yes, be willing to walk away.

[Happy]

A couple of years ago, I bought a car via an authorized Car Pro USA dealer....it's hard for a dealership to earn the right to be a CarProUSA shop.

 

What a difference! I dealt directly with a manager, not some sales person. I LOVED that. The price was discounted off the sticker--it's a standard for CarPro dealers. The entire discussion was entirely professional.

 

The manager was very respectful of my first thoughts of 'no bells or whistles' extras. After a bit, I realized I DID want a few fun things--back up camera, GPS, and blue tooth.

 

A day or two after test driving a few cars, I called the manager asked for a specific color, interior style, and all the things I wanted. He confirmed the price and I drove it home that afternoon.

 

I used their financing--I got a few dollars extra off and zero percent financing.

 

It was the most FUN car purchase ever. (And my dh and I have purchased a number of used and one other new car in the past.)

 

To see if their is a dealership close to you with the CarPro endorsement, hit the CarProUSA website.

 

Either way, if a dealership is not treating me with respect, I will promptly take my business elsewhere.

[OneStepAtATime]

Agree with the above posts...

 

1.  Have your loan approved first.

2.  Know your credit score before you go in.

3.  Be prepared to walk away and DO NOT treat this as a friendly exchange, no matter how friendly they seem.  This is business.  They may be the sweetest person on the planet but this is still business.

4.  Call USAA and have someone walk you through the process.  They are usually very helpful.

5.  Shop around on line first.  

6.  Make a list of your absolute must haves, your this is would be very helpfuls, and your I would like this if it is feasibles.  Keep that list in mind so you are comparing apples to apples, staying focused on what you really want, and are shopping with a clear head.

7.  Don't let yourself get talked into something you are not comfortable with.  If you have doubts, walk away.  There will ALWAYS be vehicles for sale.  This is not a finite item.

8.  Find the blue book value of all the vehicles you are considering and write it down so you have a more accurate idea of price.

9.  The sticker price has no relation to value.  Work from the dealer's price up not the sticker price down.

10.  Get EVERYTHING AGREED TO IN WRITING.  If they agree to those extra floor mats and another set of keys, have it written into the contract before you sign.

11.  Shop around for interest rates and terms.  

12.  Keep a folder or notebook with your notes, information, thoughts, concerns, useful advice and keep it with you.

13.  Do research through Consumer Reports and other resources on which vehicle make/model/year has the best track record for longevity and limited repairs.  Keep in mind that while a car company might have a vehicle make with a solid reputation specific years/models may not.  Make sure you have researched the make/model/year you are thinking of purchasing.

14.  Don't get distracted by bells and whistles.  If the vehicle make/model/year has a lousy track record for longevity and repair bills, it isn't worth it.

15.  Be polite but don't let politeness prevent you from clearly communicating what you want/need and from saying no.

 

[Lady Marmalade]

I had to purchase a mini van last December.  I got my financing FIRST, and I think that made all the difference.  I spoke with a salesman over the phone, told him the terms of my financing, the type of vehicle I was looking for- as well as any specifics that were important to me.   I didn't have a big list, I just wanted a mini-van that was not a Toyota, with reasonably low mileage and if it had a trailer hitch, I would be thrilled. 

 

The first van I drove was the one.  The salesperson listened to me over the phone and searched through their inventory until he found the one that matched my very minimal criteria.  Then they had to drop the price to fit my financing requirements.  There was no haggling or price negotiations.  My bank would finance for me with a very specific set of criteria, and they had to drop the price to meet it.  The whole process was SO much easier than I thought it would be.  It took less than a week, but most of that was over the phone.  I test drove right before the close of business on a Tuesday, and then went back and picked it up Wednesday morning.  I could have brought it home Tuesday night, but because they brought it in from a different location, they had to first get ownership transferred to their location.

 

This is also the time to ask your circle of influence if there are any car dealerships in your area that they recommend- or that they recommend you stay away from.  

[OneStepAtATime]

Oh, and go to different car companies and let them know you are shopping around.  My dad was great at getting into bidding wars.  He would shop at one place, drive the used vehicles he was interested in, go to the next place and drive those vehicles then see which company was willing to offer him the best price/extras/financial deal.  He would clearly communicate what the other dealership was offering, not in a combative way but as a business transaction, to negotiate the best deal he could.  He didn't lie, either.  They respected him for being honest and clear about what he was wanting.

[Carol in Cal.]

Re those 'options'--there are a lot that are nice to have but if you don't want them, say that.

Then if the dealer has a car that has them, say that you're willing to accept it but not willing to pay extra for these options that you don't want in the first place.  Then haggle, be ready to pay like 100 for 1000 worth of those options--the markup on them is pretty high, but if you actually would enjoy having them, getting them for ten cents on the dollar is pretty good.

[maize]

I went and drove a Ford Transit yesterday, fifteen passenger high roof model.

 

I liked it, twenty years newer makes a difference!

 

We'll be trying a Nissan NV next.

[TranquilMind]

Agree with the above posts...

 

1.  Have your loan approved first.

2.  Know your credit score before you go in.

3.  Be prepared to walk away and DO NOT treat this as a friendly exchange, no matter how friendly they seem.  This is business.  They may be the sweetest person on the planet but this is still business.

4.  Call USAA and have someone walk you through the process.  They are usually very helpful.

5.  Shop around on line first.  

6.  Make a list of your absolute must haves, your this is would be very helpfuls, and your I would like this if it is feasibles.  Keep that list in mind so you are comparing apples to apples, staying focused on what you really want, and are shopping with a clear head.

7.  Don't let yourself get talked into something you are not comfortable with.  If you have doubts, walk away.  There will ALWAYS be vehicles for sale.  This is not a finite item.

8.  Find the blue book value of all the vehicles you are considering and write it down so you have a more accurate idea of price.

9.  The sticker price has no relation to value.  Work from the dealer's price up not the sticker price down.

10.  Get EVERYTHING AGREED TO IN WRITING.  If they agree to those extra floor mats and another set of keys, have it written into the contract before you sign.

11.  Shop around for interest rates and terms.  

12.  Keep a folder or notebook with your notes, information, thoughts, concerns, useful advice and keep it with you.

13.  Do research through Consumer Reports and other resources on which vehicle make/model/year has the best track record for longevity and limited repairs.  Keep in mind that while a car company might have a vehicle make with a solid reputation specific years/models may not.  Make sure you have researched the make/model/year you are thinking of purchasing.

14.  Don't get distracted by bells and whistles.  If the vehicle make/model/year has a lousy track record for longevity and repair bills, it isn't worth it.

15.  Be polite but don't let politeness prevent you from clearly communicating what you want/need and from saying no.

All of this, and make sure you mention how you mention to your spouse that you really are conflicted and LOVE that blue one down the road but would you really rather have a (insert similar model), while you are sitting "waiting for manager approval". 

 

They are listening every second.  Say nothing about this particular deal.

 

Have your own notebook to write down every agreement too, because they are masters at deception and redirection and conflating various ideas.  You need to write everything down.  Read every single word of anything you sign.  Make sure every single agreement is in writing.  Make sure you know the best interest rate for which you can qualify before you get there, then if you strike a deal, then demand that they meet the rate you already got, or you will need to come back. 

 

Edmunds, for research.

 

They don't even bother with sticker prices around here.  The cost is whatever you can get someone to cough up. 

 

 

[Catalytic]

I'd do a lot of online research first.

 

As mentioned above, Consumer Reports' car buying report is well worth the cost.

 

I would NOT recommend automatically getting a loan through your bank or credit union before you check to see what the manufacturer is offering. If your credit score is good it will often be a very, very good rate that will be unbeatable by a bank or credit union. Like 0 to 0.9 percent interest. Of course make sure to check if there are any fees involved wherever you go for a loan.

 

Bargain on the price of the car, not on the monthly payment amount.

 

And yes, be willing to walk away.

 

If you want those manufacturer 0% loans, you better have darn near perfect credit.  I'd *still* have a loan in hand when I walked in.  FWIW, my last loan through Navy Federal was 1.9% on approval, 0.9% after the senior AD rank discount.

 

Personally, my credit is between me and my bank, I see no reason for allowing a car dealer to see what my annual income is, what my debt may or may not be, nor what my credit score is.  It's worth an extra percent or two on a loan to keep their nose out of it, imo.