Buying a Car: 20 Tips Dealers Don’t Want You to Know
Before you head to the dealership, learn these car buying tips and tricks.
Published November 3, 2018
If you’re planning to purchase a new or used car soon, you want to learn all the car buying tips you can. Otherwise, you set yourself up to be taken advantage of while shopping. We’ve gotten some of the best car buying tips from dealers and placed them in this list for easy reference.
1. Determine How Much You Can Afford – First
Before you decide to purchase anything or even start looking at what’s available, you need to determine what you can afford. This should be your beginning step whether you’re a first-time car owner or you’ve had fifteen models throughout the years.
You should also figure out your budget before you even determine what body style you want. It’s important to remember that vehicles aren’t an investment. For the most part, you’ll find that purchasing used is a better decision than sinking money into a new car.
By determining what you can afford now, you’ll avoid temptations later.
2. Perform Plenty of Research
One of our top car buying tips requires you to do plenty of research before shopping. The more you know, the safer you are. You can do plenty of research online through popular sites such as Kelley Blue Book, Consumer Reports, and the IIHS.
As part of our tips on car buying, you’ll want to find out the invoice price. This isn’t the MSRP, but what the dealer actually paid for the car. This is going to be important when you proceed with number six on our list.
If you plan to purchase a used vehicle, then you want to find out what some other recent cars sold for which are comparable. This data gives you some leverage when talking to sellers.
3. Look at Your Pre-Financing Options
Most people just assume that they need to finance at the dealerships, but this is false information. Often, the dealership’s interest rates are higher than typical loan rates from the credit union or bank. In fact, your bank usually offers the best relationship discounts around because you already do business with them.
It’s also important to search online for the best rates as well. Just remember to get any of your quotes in writing. Then, use this to negotiate interest rates with the dealership.
4. Shop Multiple Places
Unless you need a car today, you’ll want to take your time and shop around. One of the best tips to car buying is to walk out of at least one dealership. Then, you know their rock-bottom offer because they tend to give it to you as you walk out the door.
It also doesn’t hurt to visit dealerships outside of your city. Different locations price cars based on the local area. After just a short drive, you might be able to save even more.
5. Evaluate New and Used Vehicles
If you look back a few years ago, buying a used car was the best way to save money. Today that isn’t always the case, so you’ll need to look at both to determine what’s best. The big downside to a new car is the depreciation that occurs when you drive off the lot.
When used car supply is down, prices rise making them a poor purchase. On top of that, people tend to hold onto their cars longer which also reduces the used car market. That’s why sometimes, a new car becomes a more realistic option for car buyers.
The bottom line is to keep an open mind and be prepared to buy new or used; whichever becomes a better deal for you.
6. Negotiate Terms
Look at your next car purchase as a chess match. This isn’t about making friends; it’s all-out war. Okay, maybe it’s not a war, but you get the point. This is a big purchase and it deserves plenty of attention. In reality, you might be paying for this car over the next five or six years.
Our car buying tips begin by letting the salespeople know you aren’t going to be taken advantage of. Try to get the purchase price as low as possible. In fact, start with an insanely ridiculous number. You should know what this would be if you did your research.
Once they offer you a monthly payment over the period of 60 months, tell them you want that same payment, but with a 48-month loan instead.
If you approach the dealer with confidence, they are less likely to push you around. Stick to what you think is right and never be afraid to say no. Before you head out, find someone to practice negotiating with so you’re prepared for what they might say.
7. Make Your Purchase Based on Price, Not the Monthly Payments
Car dealers are going to offer you an attractive monthly payment to get you to bite. Don’t allow this to lead you astray. This “exceptional” payment is often connected to a very long loan length, making it not attractive at all.
Always make sure you know what the purchase price of the car is, not just the monthly payment. They might have added in extra fees and costs that you weren’t aware of.
8. Don’t Mention Your Trade-In
Hold all of your cards closely until you’re ready to deal. This includes not mentioning your trade-in. You might wonder why this is a car buying tip, but it’s quite ingenious.
Let’s say you have your eye on a $20,000 car. The dealer is willing to sell it for $17,000, but they haven’t told you that yet. If you give them the trade-in worth $1,000, they might offer you the car for $19,000 plus the additional $1,000 for the trade-in. This makes your purchase price $18,000.
If you didn’t mention the trade-in at all, you might be able to negotiate your price down to $18,000 first. Then, when you tell them about the trade-in, you have another $1,000 to play with. This allows you to get the car for $17,000.
Take your time to negotiate the best deal first, then work out the trade-in details.
9. Evaluate Your Insurance Costs
It’s crucial that you factor in your insurance premiums when you figure the price of your car. Insurance can be a major factor depending on what kind of car you choose. Get an insurance quote by simply providing a few pieces of information.
If you plan to purchase a sports car, you’ll need to budget more for your premium. There are other factors that raise insurance prices as well. Your driving record plays a role on top of the make and model of the car. Some vehicles are prone to theft, like Toyota Camrys and Honda Civics. Because of this, many insurance companies will up the premium price slightly.
10. Don’t Impulse Buy
By doing all your research before making your purchase, you prevent the urge to impulse buy. Many people that make a split second decision about which car they want, end up regretting it later. Often, they buy something that they can’t truly afford or doesn’t meet their needs.
Research every aspect of the sale. Know which model, style, and make you want. You should also have your financing and insurance ready to go. Then, you have no choice but to follow through on your planned purchase.
11. Avoid the Add-ons
Purchasing a new car isn’t something to take lightly. You might have to pay for several years until you own it. To avoid making that payment any higher than it needs to be, you want to avoid all the add-ons. Yes, heated seats sound great, but do you really need them. How about a navigation system? It would be more cost effective to purchase a portable unit rather than have an expensive built-in model.
Some other add-ons you can do without include rust-proofing, VIN etching, and a maintenance plan.
12. Go Without the Extended Warranty
Dealership extended warranties aren’t cheap. Plus, the coverage tends to be limited and doesn’t cover everything that could occur anyway. If you’re purchasing a new vehicle, that car comes with a warranty already. This should be plenty of coverage for your needs. If you want to buy a decent used vehicle, try and opt for one that still has its manufacturer’s warranties for added protection.
If you’re truly concerned about the cost of repairs, take the money you would have spent on a warranty and place it into a savings account. Then, it’s there if you need it. If you don’t use it, you still have the money.
13. Get Competing Quotes
This tends to go hand-in-hand with number 6 if you do it right. You want the dealerships to compete for your business, so you have to come prepared with multiple quotes. In fact, you don’t have to actually go to the dealerships for this to work; you can also do it through e-mail.
Let them know exactly what car you want, options and color included. Then, show them the quote you’ve already received from other dealerships and ask them to beat it. Just make sure you’ve test driven the car you want before starting this process.
14. Test Drive the Car
You must test drive your car before you buy it. You need to make sure it’s comfortable to drive. In fact, if you plan on driving your children in this car, bring them with you as well. You want their feedback on how they feel. In addition, you should examine the car for the following traits:
- Quiet and smooth idle
- Clear view out the windshield and through your mirrors
- Play with the controls – air, turn signals, and windshield wipers
15. Consult the Mechanic if Purchasing Used
If you plan to invest in a used vehicle, you want to either bring a mechanic with you or take the car to them. Give them the time to inspect the vehicle before making a purchase and you’ll save yourself a lot of hassle. They can point out wear and tear to you, plus alert you to any sign of concern. All the car buying tips in the world won’t save you from a car that’s about to break down.
Even if you aren’t worried about the problems your mechanic finds, it might still provide you with some negotiating room. Take the full report with you when you’re trying to work out the price and see if the dealer is willing to go lower.
16. Factor in Rebates and Incentives
If you want to get the best deal, you need to think beyond just the invoice price. This is one of the most top-secret car buying tips out there. You must consider the incentives and rebates on a vehicle. Keep in mind that all of these aren’t always advertised, you’ll have to do your research and arrive prepared to deal.
Secret incentives are between the dealer and the factory. These could be up to $6,000 and the dealer simply pockets that money. Even if you end up paying the invoice price, the dealer still gets to make a profit thanks to these secret incentives. If you know about them in advance, it’s possible to recoup some of that back in the purchase price.
17. If it is Too Good to Be True, Trust Your Gut
Everybody wants a good deal, that’s why you’re reading car buying tips. You never want to overpay for something or feel like someone took advantage of you. When you shop for a car, you must be a savvy shopper. On the other hand, if something seems like it’s too good to be true, then chances are it is.
Dealers and private sellers might forget to disclose certain information in hopes that you won’t figure it out. It could be as something as simple as some repairs or maintenance which needs to be done. If it’s something more critical, they might refrain from telling you about accidents the vehicle has been involved in. The best way to fight back against this is to run a car check. This should show you the vehicle’s ownership history and if anything major has occurred.
If the deal feels off at all, you need to use your judgment and walk away. It’s not worth the headache you might endure later.
18. Don’t Take the Car Home Before the Paperwork is Complete
Here’s one of the car buying tips most people aren’t aware of. Despite the lack of knowledge, this is a common tactic used to make you pay more. The dealer will send you home with the car before all the paperwork is completed. This is referred to as “spot” or “yo-yo” delivery. Then, the dealer calls you back and claims that your financing fell through. This leaves you signing new paperwork with less favorable terms.
19. Walk Out When Needed
You always want to be prepared to walk out if you can’t get the deal you need. In fact, it’s often better to walk away anyway. Many times the dealer will offer their rock-bottom pricing as you get ready to open the door, making this one of the top car buying tips.
In addition, if anything about the sale makes you uncomfortable or the dealer attempts to raise the price on you after a verbal agreement, it’s time to walk away. The right car is out there waiting for you; there’s no need to do something that makes you uneasy.
20. Enjoy Your New Car
This is one of the best car buying tips we can offer. Once you’ve put in all the work to get the deal you hoped for, it’s time to enjoy your new car. Hopefully, you’ve followed our car buying tips and were able to score a great price on a high-quality automobile.
Final Thoughts on Car Buying Tips
This is certainly not an exhaustive list of car buying tips. You’re going to encounter instances where you need to take additional steps to ensure you purchase the right vehicle. When all is said and done, you can feel proud of the effort you made and reflect on how savvy of a shopper you truly are.
By making sure you get everything set up for a perfect purchase, you control the way things turn out. You no longer need to be a victim of the car dealership, but you have the power. This opens up a whole new world of possibilities to you as you embark on this journey.