My first ever car happened to be new Toyota Corolla which I purchased at a local dealership. Sure enough as I came there to negotiate the price I became a target of every possible rip-off technique that the dealers are very good at. Well, I was young and green.
My next two cars were 2-3 year old used models which I think is the best deal value-wise. Cars depreciate the most during the first year or so and if you are a frugal shopper you absolutely don’t want to pay that premium.
Unfortunately buying a used car has some specifics that add a lot of overhead to the shopping process and often make the end result unpredictable.
Never trust the dealer
One such thing is that you can never be sure that what the dealer claims about the used car is truth. The better the bargain looks the more chances are that there is something wrong with it.
My last car buying experience is a good example. As soon as I brought the car home I discovered a bump on the side which I didn’t noticed before. Another surprise came later when I found that the car, despite the dealer claims, was in-fact in an accident. I found out about it when I myself damaged the car bumper and saw another layer of paint.
Things like these amplify my desire to go shopping for a new car after I run down my current one. And there might be not long before I will have to do so. :-(
Do your shopping online
Another advantage of buying a new car compared to used is that you can do all the shopping online. Well, sure thing you have to test drive the model you intend to buy, but you don’t have to buy that particular car at the spot. In fact you must not if you want to get the best deal. Instead you should ask the dealer to send you a quote by email and then do all the negotiation online.
Don’t just request a quote from one place. Call to a few dealers of your choice and ask them all to send you a quote. In addition go to Edmunds and use their Get Dealer Pricing service. You will be asked to enter your phone number as well however selecting the Contact Preference as “Email Anytime” should prevent most of the annoying phone calls (yes, I do hate talking to dealers).
Use shopping tricks
Now comes the most interesting part (and I learned this trick just recently). As you start receiving the offers reply every single one with something like this:
Sorry, while I really want to buy this car, I’m afraid your bid takes you out of the running. If you want to make another offer today, I’ll look at it.
This will bring you to the second round of bidding. In case some of the dealers drop out you will know that they have offered the best price. But more likely you will see new better offers coming in. They do want your sale!
At the end simply choose the best price and accept it. Even if it happens to be one of the offers you rejected — nothing prevents you from replying with another email explaining that circumstances changed (e.g. the competitor didn’t have the right color) and you do want that price after all. ;-)
Bonus tip!
To completely avoid having to talk to the sales people you can get a temporary number from a free service like www.7k.net (no longer in service) or www.privatephone.com and have all incoming calls redirected to a voice mail. You can then listen to the messages at your convenience and return the calls you like. Some of these services will receive faxes as well.
This article includes some great tips… thanks! One question… I’ve never attempted to get a quote from a dealer via email. Is it safe to assume any given quote will be the bottom line including all taxes, fees, etc.?
The quote will usually include everything except:
1) Tax
2) Document fee
3) License place fee
You cannot assume this is the bottom line price and that is why the shopping tricks like above make sense.
Here is another useful tip. Instead of giving out your phone number (in addition to your email), use http://www.k7.net which is a free voicemail/fax kind of service. They will forward incoming calls and faxes to you by email. If you do so you will not have to talk to anyone unless you want to, and that is exactly the way I like it!
For me if I am going to get a new car, I will definitely get a car broker, who will ring up all the dealers and do all the bargaining for me. People don’t buy cars everyday so it is quite common to be clueless in front of a salesman (I know I would). I rather out-source that bit than doing everything myself…
They are not cheap (around AUD$500 here in Australia), but could save you thousands of dollars and you don’t have to buy from them if you don’t think they find you the best offer.
Maybe Australia is different but buying a new car in US is pretty easy. You can find a lot of help online. You can even get the car invoice price (which is supposedly the price dealers pay) so you know what the ultimate goal is.
$500AUD ($400USD) is a lot of money for me and I will think twice before paying it to anyone. Besides, to some extend I enjoy this stuff, as long as it doesn’t mean I have to sit at the table and do the bargaining face to face. ;-)
Yup Australia can be very different, and cars here are actually more expensive than US because of tariff imposed by the government.
I don’t think there’s a way to obtain invoiced price here, but with car brokers they do have access to wider range of dealers, get more quotes from them, and in theory obtain a lower sale price. AUD$500 is really the high end I think, and you certainly can get brokers online. BetterDeal.com.au is doing price auction to dealers for AUD$150, and from what I heard they are pretty good.
Of course, dealing with the car dealers can be an enjoyable game to some. I just can’t see myself having fun with it, yet :)
I went through this exact same process 2 years ago in buying a new 2004 Nissan Quest, and CarsDirect.com ended up beating the best dealer offer by just over $1,000.
Yan, I like your other posts but I am sorry I don’t see anything useful here. You’ve bought 2 used cars but it seems you don’t even know carfax? Also buy used car from a dealership is not a price saving idea :-)
My dear friend, I would not be ProBargainHunter if I did not run a report on that car. ;-) However Carfax will not have a record if the accident is minor and not reported to police or insurance.
Besides, according to the insurance rep. who assessed the damage on my current car (see my birthday gift post) some shady insurance companies will not report it either. He also mentioned that any more or less seasoned mechanic will be able to tell you a car history by different minor clues (mostly looking underneath at how screws sit and paint applied). The guys at dealership said that the wife of the owner was driving it for a while before they sold it to me and there was no way they didn’t check it.
Anyway, this post wasn’t really about my past mistakes and wasn’t meant to be a guide to buying a used car. I gave the example only to show that buying used cars is much more complicated process and as such requires much more of your time. As an alternative I have attempted to find a hassle free and yet sure way of obtaining a good price on a NEW car (thus the heading), which I will likely to follow, unless you have other better ideas… do you?
Such great advice! My friend just bought a new Toyota Tacoma via the Internet. After hours negotiating in-person at another dealer, he scored a great deal on the truck he wanted via email at another dealership.
Consider that this advice also applies to people shopping/negotiating in person as well. Most importantly, make sure you are negotiating with separate dealers for similar cars. Your response to an offer becomes: “Sorry, while I really want to buy this car, I’m afraid your bid isn’t as competitive as the one I was offered at _____. Can you do any better?”
When you negotiating with a dealer via email it’s nice to talk about both:
1. Car price, not including TTL (tax,title,license)
2. OTD price (out the door) this is what you will actually pay for the car, that included TTL
Usually after you negotiated part 1, part 2 will bring another round of negotiations because dealer will try to throw in some additional fees that you don’t have to pay. I negotiated 2 cars recently via email and it’s been fun and enjoying process! Great article!
Do You Know Anybody Who Got Ripped Off By a Car Dealer? I need storys for my new book. Can you ask around. My new book will be out with in 4 weeks. Just go to my website to submit story if you got ripped off.
Thanks,
Bob
http://www.CarDealersExposed.com
i read an article recently about buying via email and fax from home. the article suggests dealing with the fleet manager at dealerships. they do not receive commission based on profit, rather on quantity of cars sold. because of this they are not able to compete with the dealer sales staff therefore you must specifically request to speak/communicate via email with the fleet manager.
If u want low price car, u will buy something which only look like a car…
“If u want low price car, u will buy something which only look like a car…”
lol @ CRASHER’s comment..Wat ELSE U WANT A DAMN AIRPLANE…lol we all r talking about cars here!
Generally dealers do sale their Used cars which are 1 year old and thus it will be great advantage in buying as you save 20-40% off on Used cars