Tuesday, July 12, 2011

My Mildly Bitter but Informative Car Buying Tips

After a good 5 car payment free years, the Hubs and I decided to both buy new cars this past Spring. I’m still not quite sure how he ended up getting a new vehicle because his was just fine and I do remember him loving it ALOT. He did, however, despise mine with a passion. I had a love/hate relationship with it.

It was a 2001 Hyundai Elantra. I am convinced that I could have filed for Lemon Law on this vehicle, even though it was purchased brand new, given all the problems I had with it over the years: resealed/repadded/recarpeted, repainted, 3 rounds of brakes and roters (I don’t really know what those are), 4 recalls, 2 air conditioning recharges (is that right term??) and a partridge in a pear tree... and that was just in the first 2.5 years of it’s life! No lie. Except for maybe the pear tree, but I do believe there was a bird inside at one point. 

Anywho, my goal was to pay off my student loans and buy a new car. After just two post-graduate school years I paid my final loan payment and was FREE! (But don’t tell my Alma Mater because I’m still using the “I’ll make a donation when I’m done paying for my education” excuse to the Alumni board.) I’m going to pause for a round of applause now. I am VERY proud of getting my loans paid off as early as I did!

So, the Hubs fell in love with a beast of a vehicle, a JEEP Wrangler. Here is how the conversation went, verbatim, at the dealership:

Me: Do you really need such a large vehicle? It’s like Hummer-sized. I’m not even sure it will fit in the garage!
The Hubs: It will fit in the garage and yes, we do need it. I need it to tow the boat.
Me: What boat?
The Hubs: Our boat.
Me: We have a boat.
The Hubs: No.
Me: We need a vehicle to tow an imaginary boat.
The Hubs: <silent with a look on his face as if he doesn’t know what the problem is>
Me: You are going to buy it anyway, aren’t you?
The Hubs: Yep
Me: <sigh>

Now, back in 2002 when I bought my Lemon I remember quite enjoying the car buying experience. Call me a wheeler & dealer at heart, but I got such a rush from the negotiating. I know many people hate that part, but to me it’s an opportunity to save my family money. Money we work hard for. Money we have other uses for. Money we have BETTER uses for. Believe me, if car companies distributed coupons I'd be all up on that!

I remember telling my husband once that I am good at negotiating with car dealers. So, when it came time to talk numbers on his JEEP, he pretty much walked away and let me do the dirty work. When he rejoined the salesman and I the first thing the salesman said was, and I quote, “You’ve got a ball buster on your hands here, don’t ya?”

The Hubs: Yep.

A couple months later when it came time to buy my car I did all the negotiating too. I know my husband would have done a great job at it, but he doesn’t really care for talking about money with other people and it doesn’t really bother me (perhaps because I spend my days blogging to the world about how frugal I am??). The Hubs would much rather talk about the vehicle itself, which is great because I couldn’t tell you the first thing about how a car operates. <Dramatic flashback to the day my husband unsuccessfully attempted to teach me how to drive with a stick shift.>

I had my heart set on a Volkswagen Tiguan. For years I wanted this sporty little crossover of Awesomeness. Unfortunately, the dealership didn’t want me to have it. They seemed to think that it was perfectly acceptable for someone to walk into a car dealership, look at the price tag and say, “That sounds good, I’ll take it!” Do people do that?? I don’t think they do. At least, I don’t think they should. Why give someone money you don’t have to? Haggling for a car is an American tradition and I take full advantage of it!

VW Salesman: “What will it take for you to buy this car today?” (I hate that question. It will take a 100% off coupon and a back rub. What, not the answer you were expecting??)
Me: “A fricken awesome deal, is what it will take.” (Apparently car shopping turns me into Yoda.)
VW Salesman: “Ehhh, I can take $300 off the sticker price.”
Me: “Excuse me what?”
VW Salesman: “I can knock $300 off for you if you buy today.”
Me: “$300. $300? Off an over $30,000 vehicle? I don’t math on Wednesdays.. oh, today’s Thursday? Well, I don’t do math on Thursdays either but if I did I would say that was a 1% savings. I think you and I have very different opinions of the definition of ‘awesome’.”

I’m rambling. This is suppose to be a post about car buying tips. Anywho, I ended up buying a JEEP too and did the best I’d ever done on talking them down. Yay! So, here are my tips:

I can’t tell you how to pick the right car for you but I’m sure you already have a few ideas. So, before going into a dealership do yourself a favor and do your homework. You should never walk into a dealership without knowing:

  • A priority list of features. Like buying a house, have a list of wants and needs and know how each make/model you are considering compares for each of those items.

For instance, I wanted a vehicle that had a decent amount of cargo space. So, while looking at the different models I was considering I could say, “I like that this has Bluetooth, but I really need to be able to haul massive amounts of crap back and forth to Ohio and the (insert other make/model here) has more cargo space.” This will not only allow you to rate the different vehicles in your head but will also say to the salesman, “You haven’t won me over yet so do better!”

Even if you aren’t planning to trade-in your current vehicle, you should know this number anyway. Chances are it will come up in conversation at some point and you don’t want to be caught off guard. The dealership who sold us the Hubs JEEP, for some reason, didn’t want to go down much on the sticker price but was willing to offer above value on his trade-in. It ended up being the smartest decision for us to trade it in, in order to get the best overall value. It’s a free tool online, so just do it.

  • What that vehicle has sold for in your area.

AAA has a tool online that will tell you what a certain make/model has sold for in your area, as well as regionally and nationally. I still don’t get the whole invoice price vs. sticker price vs. cost business. Knowing what other people paid for that car out the door will help you set a fair price to start with when they ask what you want to pay and will help you know when their counter-offer is too high. This is just straight up ammo!

  • Know what interest rate and financing offers you can get from your bank(s).

They will want you to finance through them and that’s fine, if it’s the best deal for you. Don’t find yourself in a position of agreeing to finance through them without knowing that they are giving you the best available deal.

Now, I know not everyone can be as rude... ahem, honest... as I can be to a stranger- even to a salesman- so maybe these suggestions won’t work for you but here is how I did or would respond to things car salesman like to say/ask:

“What will it take for you to buy this car today?”

As I’ve said before, “A 100% discount and a back rub.” That is sort of a stupid question but they always ask it. They are never going to say yes to your answer so your response will be where the negotiating starts. I’ve been treated like a naive girl who they could take advantage of before so I like to start with a clear statement that it ain’t gonna happen this time! If they want a starting point for negotiations, then why not let it be $0?

Okay, okay.. this obviously isn’t going to happen so this is where that AAA tool you used before comes into play. If you know what people on average pay for the car, and you know the lowest & highest paid for it, then set a few price points. My husband and I picked a fair but low price we wanted to shoot for but knew we probably wouldn’t get; an average price we thought we could get & would be happy with; and a maximum would-rather-walk-away-than-pay-$1-more price. Anyone who is with you & helping with the negotiating should know these 3 prices and be on the same page!

When they ask what it will take, give them your lowest price point. If they say okay, you’ve clearly not followed directions and tell them you’ve changed your mind and bump that number down some more!

“I want you to know that I’m doing you a favor by giving this much for your trade-in.”

Yea, yea. Remember- they aren’t doing you a favor by taking your trade-in. You have an item of value and they are buying it from you. You may roll this into the new car deal but negotiate it as if it’s a separate deal entirely. Why would you give the dealership a break that you wouldn’t give someone if selling it privately? It’s still money in exchange for a car.

When buying our JEEPS, we didn’t just know the blue book value but we also looked up what comparable used cars in our year/make/model had sold for or were listed for nearby. The dealership will likely tell you what they will have to put into the car before they can sell it (repairs, cleaning, etc.) and they will likely tell you what they are planning to relist it for. Bet you a dollar that won't be the truth. I know for a fact that my husbands trade-in was listed for $1000 more than what they told us they could list it for. Now maybe they will end up taking less for it, but how well they do on the negotiations for reselling your trade-in isn’t your problem! What they do with it after you sell it to them is irrelevant to this transaction.

“Why don’t you tell me what monthly payment you are hoping for and I’ll see what I can do to get you there?”

The appropriate response to this is, “No.” 

With the right financing terms, you can get a $10 monthly payment on a million dollar loan but your great-great-great grandchildren will still be paying for your debt. What you want and care about is getting the best value for what you are getting. I knew what I could afford to pay comfortably each month given my budget, but I am a couponer and I want VALUE! 

At the end of shopping, my choices came down to a $20,000 low end trim package with little amenities and a $32,000 high end trim package with all the amenities. It wasn’t about the monthly payment. I had to decide if I wanted to pay more per month for the features I was getting or would I rather have a lower payment and live without those luxuries. (FYI, I went for the luxuries.)

We ended up completely negotiating the prices on both those vehicles. I needed to know at the end of the day which was going to be the best value and that included all features, financing options, taxes/title costs and all those other annoying little fees.

“Now, let me go run all this past of manager.”

To which you reply, “If you aren’t the person who can finalize this deal I want to speak to who can.” Do you like spending time at car dealerships? I don’t. They make the worst coffee. There is no reason why buying a car should take 5 hours. Salesmen shouldn’t make offers they aren’t authorized to give. I guess they enjoying wasting other people’s time. Managers, on the other hand, value their time a little more and tend to cut to the chase with you- which is all you ever wanted in the first place. If it isn’t going to happen, cut your losses and go get a beer. If it is, then just get ‘er done! (And the go get a beer to celebrate!)

“If I meet that price, I’ll only take home $100 total on this deal.”

“Wow, that’s $50 an hour for your time- high five!” Seriously, I know that salesman are people too with families and bills and they need to earn a living too. BUT, if they cannot afford to pay their bills working that job, than they need to find another job. This truly isn’t your problem. My typical response to this statement is, “I don’t mean to me rude, but how much money you make today is completely irrelevant to my situation.”

When buying the Hubs Jeep, I continued, “Every dollar I give you is one less dollar we have to refinish our basement and we need to refinish our basement before we can have kids so right now you are standing in the way of me having babies and my mom having grandchildren. How do you feel about that?” Immature, I know but what I said was as silly as what he said. He doesn’t care if we have children ever and I don’t care if he eats Ramen noodles tonight. We all have a Ramen noodle phase in life.

And I bet you another dollar he’s lying about this too. Sure, he may only make a $100 commission check for this deal but he’s probably also going to get a bonus if he meets his monthly/quarterly quotas. And the dealership may not make $1 on the deal but they will also receive incentives and kick backs from the manufacturer. The truth is if dealerships really sold cars without making a profit they would be out of business and if salesmen sold cars without making an income they’d be working another job.

Okay, I’m ranting enough. Here are just a few more tips:

  • Ask for time to speak alone at any point you need to. Don’t show them any cards they don’t need to see. It will also make them sweat. Besides, probably half the time they are back “checking with their manager” is probably spent around the coffee pot talking about last night’s game just to make you think they are working really hard for you. Let them think you aren't already writing out your new car Facebook status in your head.  
  • Go to the dealership on a weekend morning and give yourself a break for lunch. It will allow you to clear your head and once again, make them sweat. But whatever you do, don’t agree to drive the vehicle to lunch... or else you’ll start to see yourself owning it and daydream about baby seats in the back and then end up buying it. Unless you really want to buy it anyway... and then why not use their gas for your lunch date.
  • If you are waiting on optional features you worked into the deal, get in writing a date they expect to have them in for you before signing on the dotted line. Or risk waiting 2 months for your fricken bluetooth install! GRRRR!
  • And last but not least, a little trick I learned from our Best Man: When all deals are decided on and everyone is happy... say, “Sounds good, now all you need to do it throw in a set of mud flaps and we’ll call this a done deal!” Works every time!
Does anyone else have any good car buying tips? I'll also settle for just funny ones. :)


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