First Time Car Buying

Flag and Safe are both missing it. Once you have picked out exactly the car you want (color, options, etc.) you can do the whole thing on-line, price negotiations, financing, everything. No need to even go into the dealer. I did my research, knew what invoice was, then told five dealers within 50 miles to give me their best offer. All five had a detailed offer on the table within 24 hours. The closest local dealer came in a few hundred bucks higher than the low bid, so I emailed them back and told them a competitor 30 miles away had beat them by $500, a good offer below invoice. They dropped their offer by $750 within 30 minutes. Then we did the financing deal, again via email. Everything was all set up when I came in. Signed the papers in 15 minutes, they made a half-assed attempt to sell me extended warranty and I was out the door with my car. No need to even set foot on the lot after you've done some test drives.

Safe and Secure wrote:

I only visited 2 dealers.

Granted, I had to drive over there numerous times, but I believe I saved a good deal more than $200.

If you are impulsive and need to have a car THAT day, you will not get the best price. I'll say it again, the ability to walk is what gets you the best price.

Honestly Flagpole, we are talking tens of thousands of dollars. You drive to the CVS for a $20 purchase, I think you can make 2 or 3 visits to the dealership to save a few thousand.

Nah. Dude, your way does NOT save tens of thousands over my way...no freakin' way. Go in with the invoice, tell them you know about the hold back, make a decision on what you will pay based on all that, and it is well below invoice every time, so no way are you getting tens of thousands of dollars better than that. You should have stopped before after I already told you that if you want to do what you did to maybe do $200 better than what I would get (because I was agreeing with you there that if you want to do that that it would work), but now that you've said you will save tens of thousands over what I could get...nah...now you and I are in disagreement for the simple fact that you are wrong.

Also, I agree that you have to be prepared to walk away. The thing is that when presented with the facts (that you know how their pricing works and they see you holding the invoice and that you know about their hold back) and you make them a fair offer based on that (I WANT the sales guy to make a LITTLE bit off the sale) then they would be foolish to balk on that offer. You want to spend all that extra time getting MAYBE $200 less than just going in there with a fair yet advantageous offer, then go right ahead. As I said earlier, that isn't worth it to me. Car buying is simple:

1) Do the research on what you should be paying.

2) Tell them you want car X on the lot (the car has to be on the lot to get the best deal).

3) Show them the invoice and tell them you know about their pricing and hold back and then make a fair offer (this will always be well below invoice price).

Anything more than that is too much work for too little gain in my opinion.

You guys are idiots. If you can borrow money at 0%, then you can take the savings you would have spent to buy the car outright, invest it, and make money off of it that you couldn't have made by investing it in a car. If someone wants to give you money at 0%, and will negotiate a good price on the car, take it.

Bikers need to tone it down wrote:

X-Runner wrote:

Depreciable assets can still be purchased by loans.

A car has long term value and is expensed over time.

Like when businesses lease equipment.

Woah... Woah... Woah...

Hold on a second here. Do you see the flaw here?

Businesses lease equipment why? To have fun with it and look cool? No. They lease equipment to do more business and make more money. If the equipment cost more than the revenue they were making, they would go out of business.

Unless OP is planning to make money with his car in some way, financing is a losing option.

Yeah, I'm ok with doing it online if you like. As is crystal clear here at Letsrun, I'm a people person, so I like to see the salesman face to face. I just won't get into any haggling with one. It's my price or the sale doesn't happen.

[quote]X-Runner wrote:

Depreciable assets can still be purchased by loans.

A car has long term value and is expensed over time.

Like when businesses lease equipment.

There is nothing wrong with borrowing money if you pay it back.

quote]

You are a total idiot and fool. Tell me how much you love that car payment 5 years later when the care is no longer "new" and you happen to lose a job.

Can you live this way? Sure, but it's very risky and leaves you too exposed to risk and limited in opportunity. A very dumb plan.

CRV wrote:

You guys are idiots. If you can borrow money at 0%, then you can take the savings you would have spent to buy the car outright, invest it, and make money off of it that you couldn't have made by investing it in a car. If someone wants to give you money at 0%, and will negotiate a good price on the car, take it.

I can agree with this, as long as you know exactly what you are doing. Slimy sales guys have all kinds of tricks.

Personally, I would rather pay it outright and not deal with it. In understand your point, and it is a good one.

Flagpole, I think we are in agreement. To be clear, I meant the purchase itself was tens of thousands, so it is worth a little time. No need to rush it. Walk out if they won't take your price. They will likely call you back.

To the other guy, I did do 99% online. My point was that when you show up, they try to tack things on, fees, etc. That is when you need to walk.

Squid is exactly right, it can all be done online. Just go to Cars.com or Autotrader and put in exactly what you want (color, options, etc.) and the radius you are willing to travel. The dealers will compete for the best price. If you don't like the price don't buy the car. I know a few people who have had great results this way.

Horacio wrote:

Squid is exactly right, it can all be done online. Just go to Cars.com or Autotrader and put in exactly what you want (color, options, etc.) and the radius you are willing to travel. The dealers will compete for the best price. If you don't like the price don't buy the car. I know a few people who have had great results this way.

You can take it further though, by taking the 5 best prices and emailing them all in one "reply all" from your personal account. That is what I did.

How do you recommend finding a fair price on a used car? A little harder seeing there are so many variables (year, mileage, condition). It’s too late for me now because I just bought a used car from the dealer over the weekend. I used the Edmondus.com True Market Value pricing to help find what I thought was a fair deal.

It is amazing how much you can save with just a little time. Went to three local dealerships on Saturday looking for a used Toyota Sienna with under 30k miles. All of them laughed at me when I asked for the Edmunds true market value (TMV) for the van (their prices were about $2,000 higher than the TMV). Then I called a dealer about an hour away where I used to live and had previously bought a car from. They asked "what would it take to get you to drive in" I gave them a number about $200 less than the TMV and they said if that’s what it takes we'll do it.

I said no to all the extended warranties but can still add them. The whole reason I bought a Toyota is for their reliability. Seeing the original factory warranty expiries in about 3 months should I invest in an extended warranty?

One thing that people seem to be missing here is the purpose of money, once you're beyond the "safety and security" zone, is to buy things you enjoy. So if you're a guy who enjoys nice cars, and the added enjoyment you'll get out of a nice, new car is worth it to you relative to the lesser amount of money you'll have down the line, go for it as long as you're not taking out a loan that's over your head. Money can have a purpose in your life besides making more of itself.

TK1451 wrote:

One thing that people seem to be missing here is the purpose of money, once you're beyond the "safety and security" zone, is to buy things you enjoy. So if you're a guy who enjoys nice cars, and the added enjoyment you'll get out of a nice, new car is worth it to you relative to the lesser amount of money you'll have down the line, go for it as long as you're not taking out a loan that's over your head. Money can have a purpose in your life besides making more of itself.

I totally agree with you. I am much more aligned with your opinion than that of most of Flagpole Willy's posts, which seem to advocate against enjoying the nicer things in life.

The issue comes when people think they can enjoy those things without earning the money to do so. If you have the money abnd think it is worth spending, go for it. If you do not have the money, well, you need to earn the money first.

Why do you have to earn the money now for future expenses?

The car's value does not fully depreciate in one month or one year. The cost is less then 10% of his income.

I know you don't like the obligation but it is a future obligation against future income.

Just say you don't like the interest expense.

It'll cost $50 a month to have it now vs later. That's samll compared to the cost of insurance gas and maintenence that goes with it.

If you lose your job you can sell the car, pay off the loan and be back to square one.

X-Runner wrote:

Why do you have to earn the money now for future expenses?

The car's value does not fully depreciate in one month or one year. The cost is less then 10% of his income.

I know you don't like the obligation but it is a future obligation against future income.

Just say you don't like the interest expense.

It'll cost $50 a month to have it now vs later. That's samll compared to the cost of insurance gas and maintenence that goes with it.

If you lose your job you can sell the car, pay off the loan and be back to square one.

Proof you are a fool... and we know what happens to fools and their money.

You go buy that $30,000 car finance it, then try to sell it once you are upside down. Then you are in that great position of a) making a payment on a car you no longer own

b) still having to buy SOME type of car to get from point A to B.

Safe and Secure wrote:

Flagpole, I think we are in agreement.

On that I agree.

You are assuming that car salesmen are actually people. That's a leap.

I went to the online method after a particularly bad experience at a VW dealership in Santa Cruz. Told me they needed my drivers license to give me a quote and then when I decided to walk, they would not return my license. I'm a people person too, but some of these outfits don't treat you like a human being.

If you are going to meet somebody face-to-face, you should check out the guys in the service department. Those are the ones you'll be dealing with in the future and need to get along with/trust. You'll never see that salesman again in this life.

I went about buying my car similar to how safe and secure bought his. I had a few more restrictions on what I could get because I took advantage of cash for clunkers (i.e. i needed a manual because the mpg was just enough to get an extra 1000 credit).

I searched every dealer website within 2-3 hours of me to (probably close to 100 dealers) find those that had an acceptable car in stock. I e-mailed or called all of those (15-20 dealers) asking for the lowest price they could sell it for. Many would not budge below their listed price, but some gave me pretty good offers. I e-mailed the best offers to the other dealers asking them to beat that price, and kept doing this as the offers improved. A couple dealers were able to lower their price when I e-mailed them a better quote from another dealer on an identical car. A few seemed insulted that I would ask for such a low price and I no longer dealt with them.

One thing you may want to do is check out dealers in other nearby states. Dealers in two nearby states were able to offer much better prices than any dealer in my state because there were different dealer rebates available from the manufacturer.

I ended up getting the car I wanted for over $2500 less than invoice. After the cash for clunkers rebate i ended up paying 10,900 on a car with an msrp of 20,500.

The only times i stepped in a dealership were to test drive different models and when I actually purchased the car.

I would suggest joining a credit union because they have great deals on loans some times. My girlfriend joined with a $5 deposit in a savings account and got a 3.2% loan on a new car. Pretty good deal.

To plug a car, I love her Honda Fit. It is cheap, gets good gas mileage, and is proven in Europe. The fold down flat rear seats allow you to fit 2 bikes in the back or a ton of cargo.

Good Luck.

Mike

Are you willing to consider giving me a tip for answering your questions in an intelligent manner?

I'll give you a tip for being the only person to answer the 4 questions I listed. Thank you.

Very frustrating to do so much research to find out that every car has problems and nothing is a true standout, especially if you read these forums. Terrifying.