BUYING A CAR > How to Buy a New Car

How to Buy a New Car

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When was the last time you bought a new car? It really can be a pain. I’ve gone through this torture a lot. Having bought dozens of cars, I will share my experiences at new car dealerships – and the mental toughness you need to have. Buying a new car isn’t for the timid. Sometimes a trip to the dentist can be more pleasant.

There is a good deal of psychology being deployed by the salesperson at a car dealership – the more you know about their techniques the more likely you are to get the best price possible. If you do your research, you can learn how to buy a new car at or below invoice. Car dealers play mind games – it’s almost like brainwashing! Get ready, because this can be an all-day adventure and you need to be in control. Have no fear and bring a snack.

The New Car Buying Experience

Buying a new car can be a quite an experience. This is very different than buying a new computer or leather sofa. A car is often the single biggest purchase you can make after buying a house – not counting putting those kids through college. So you need to take it seriously and not worry about hurting a salesperson’s feelings. More than likely you will never see them again – you are not at a dealership to meet your next best friend. You are there to make a major purchase at the lowest price possible.

Car salespeople work on commission for the most part, and their job is to squeeze every last penny out of you. I did this myself when I was selling cars professionally. You need to keep a clear head and focus on the goal of getting what you want for the very lowest price possible. With this in mind, you need to do some groundwork. I didn’t like doing homework in school, but studying up here will make all the difference.

Doing Your Research on Prices

First of all, you need decide on the model, accessories and colors you want. (Always have more than one color in mind because you might not be able to get your first choice.) Next, it is time to get on your computer or go to the library. The first thing you want to do is get ahold of some reviews about the car you want to buy. Check out sources like AutoTrader and Edmunds, some of the larger car magazines (think Road & Track, Autoweek and Car and Driver), and any other publications you can find in your new car search.

Most publications like these will take a car for a long-term test period – usually a year. They keep track of things like real-world gas mileage, repair and maintenance costs, performance, and drivers’ impressions. You need to see if the car you have your heart set on is a good one – or a problem child. Take advantage of other people’s experiences to get a feel for what your new car will be like. This can save a great deal of time and heartache if you discover that a red convertible dream machine is really a nightmare! And who wants that to happen during a midlife crisis? Another thing I have seen people do is go out and rent a car they are considering and drive it for a few days to see if they really like it.

Getting Your New Car for the Lowest Possible Price

The next thing to look into is pricing. With the advent of the Internet, the price that a dealership charges for a car can be readily found out. If you look deeply enough, you can even find out the true invoice price of the car. Don’t hesitate to offer a price below invoice. Car dealers get backend money from the manufacturer for every car sale – so they are not really losing money selling you the car. This pricing information is powerful to have when you get to the negotiation phase. Spend some time on this because it can help save you a good deal of money when you are finally ready to sign on the dotted line. Don’t pay too much – it’s your main goal.

At this point, you are armed with a great deal of knowledge about just what you want to buy and have an excellent idea of what price range you should be able to get the car for.

Heading Out to the Dealership

Now it’s time to drive to the dealer. Always visit the dealership with another person. Doing this puts the salesperson off guard because they don’t know who is the real decision maker. You want to keep them off balance as much as possible. Another thing to consider is which days are best to go car shopping. Weekends are usually a madhouse at a car dealership. I have found that weekday afternoons can be best. There usually are not too many people out shopping for cars at this time. A dealer can get a little desperate to sell a car.

When you arrive at the dealership, the first thing you want to do is walk the lot – don’t just walk into the showroom door. Make the salesperson come to you. This is a psychological ploy that can have a positive impact on who is controlling the visit.

The salesperson’s first course of action is to try and establish an instant connection with you. They will start by asking you something like, “Wow, isn’t it a beautiful day.” Believe it or not, this encourages the unaware buyer to say yes to whatever the salesperson asks. Most salespeople are trained to follow a script designed to move you toward the sale. You want to be in control, so don’t feel like you need to agree to what they are saying. A “no” can be very powerful. As a car salesperson, this always put me off my game.

A good technique at this point is for you and your partner to split up. Head in opposite directions on the lot. The salesperson will have a hard time deciding who to follow. Remember, they want to focus all of their sales skills on whomever they think is the true decision maker. This puts them off balance even more.

Once you have looked at the car model, you want meet up with your partner and tell the salesperson you want to take a test drive. One control technique that they try to play out is to ask you for your keys so they can “evaluate” your trade-in. Don’t fall for this. Say that you are not planning on a trade-in – just a straight purchase. I will cover more on this later.

How to Take a Test Drive

Now it is time for the test drive. You want to try to take your test drive without the salesperson. Go ahead and be bold. Tell them you want to have some private time to evaluate the vehicle and discuss it amongst yourselves. Some dealerships will say that their policy won’t allow this. If that is the case, tell them you are going to leave right now and go to the XYZ dealership. Tell them that your friend said they let people take test drives alone. Chances are they will let you go out yourselves. Who wants a high-pressure salesperson perched in the backseat, talking and talking? Not me.

Now, head out for a long drive. You want to get a real feel for the car. Drive it on city streets, hit some bumps, and drive on the freeway. You need to know if this is the right car for you. Also, the longer you are away, the more anxious the salesperson becomes. As soon as you get back to the dealership, split up again. They will start asking you questions about how you liked the car and if you are ready to come inside and go over the details. You want to be very vague here. Say that the car was OK, but you are a little more impressed by another brand. This goes even further in putting you in control of the situation. This can make the salesperson very uncomfortable. It used to make my stomach hurt.

After spending some time wandering around the lot again, it is time to head inside and negotiate. There is one more ploy that car salespeople do: They will not ask for the car keys back. Having you hold on to them is a psychological tool – they want you to start thinking it’s your car. They don’t want to let anyone else drive your new car. It becomes a mind game – no one can drive my car! So, as soon as you sit down, hand the salesperson back the keys.

Negotiating the New Car Purchase Price

Now comes the “fun” part. It is time to begin negotiations. Most salespeople I have run into try the old technique of bringing out an offer sheet. The first thing they want to get is all of your personal information – full name, home address, phone number, email address, etc. Just give them your name. Absolutely do not give them your social security number. Some less-than-desirable dealers will run a credit check on you on the spot. This just isn’t necessary at this point.

On the offer sheet they write down the model of the car, its stock number, and their full retail asking price. They will then turn the paper toward you, lay a pen down on it and wait. This is another little game. It is commonly know that the first person who speaks loses. Just sit there. Remember you are not here to make friends!

From my experience, the salesperson will eventually take the paper back and ask you what price you are willing to offer. They want to have you write down the price you are offering on the offer sheet. Then they ask you to sign it so they can take it to the sales manager as a real offer. Go ahead and do this – it really doesn’t mean anything of value. Just keep in mind the pricing research you did before your visit. When you finally tell them the price you want to pay, make it a little less than your research established – it gives you a little wiggle room.

The salesperson will disappear for quite a while. If it seems too long, get up and start walking toward the door. This gets their attention pretty fast. They will ask you to come back to the desk and go over the sales manager’s response. Quite often the sales manager comes back to the desk with his salesperson. His job is to apply the hard sales pitch. This becomes the classic good cop bad cop routine. They may come down a bit, but do not think for a moment that this is the final price.

This is where you bring up your research on pricing with the sales manager. Tell him that you have found what other people in your area have been paying for the same car. Now is the perfect time to tell them that you know that the invoice price is X. Write this number down on the offer sheet. Don’t sit around and play this game for hours. Make sure you tell them that you want to get to another dealership before they close. Now the salesperson will say that he is on your side but you need to make an offer that the sales manager will accept. Stick to your price.

If you feel you are getting nowhere and wasting time, get up again and head for the door. I once went in to purchase a new car using these techniques. As I put my hand on the door handle to walk out the sales manager came running after me. He asked me if I would but the car right now if he made me a “crazy” deal. Now this was where I wanted the price to be.

Talking Trade-In Prices

Once you have the final price established, it’s time to start talking about a trade-in – assuming you have one. A trade-in is particularly valuable to a car dealership. They expect to get them for next to nothing and to mark them up for a huge profit. But you have done your research and you have prepped your car for sale.

What dealers like to try and do is to quote you the “auction price” for your trade-in. This is an extremely low price – the price they could expect to get if they just dump your car at a used-car auction. Believe me, I haven’t seen many dealers wholesale a clean car to an auction.

They want nice used cars on their lot for several reasons. First, of course, is profit. Second, a good used car can be a backup for another buyer who has sticker shock on a new car. If a customer is ready to walk away without buying anything, a skilled salesperson will “turn” the customer on to the less expensive used car. It is cheaper than the new one they can’t or won’t buy. These cars become a sales tool – the dealer’s goal is to not let anyone walk off the lot without buying something. Car dealers can be like hungry wolves drooling over profits and commissions.

It is very important to negotiate the price of your trade-in after you and the dealer have agreed on the price of the new car you are buying. Separating the two transactions maximizes your savings on the new one and gets you top dollar on the used one. The car business is quite a game – and you want to win!

Pick the Newest Car

One thing to try and do is to not take a new car with over 50 miles on it. Hey, I want a new one. There is some wiggle room here, but I use this as a benchmark. You certainly don’t want the car that everyone has been test driving. You just don’t know how gently it has been driven. I know that I have seriously punished a new car to “see what she can do.” I just want to floor it – then slam on the brakes to see how quickly it can stop. You don’t want that car. Also, be very weary of buying a car that has been used as a salesperson’s demo. Once again, you don’t know how it has been treated. You want your new car to be truly new – you get to follow the manufacturer’s break-in period and do it right. You want this car to last for many years to come.

If you follow these steps, you should get a deal you can be happy with and also save a good deal of money. Buying a new car isn’t quite like buying a pair of shoes – there are a whole lot of variables and plenty of negotiating that needs to be done. Stick to your guns and don’t be afraid to simply walk out the door – and remember that you can often save money if you just pretend to be leaving. So, go to the dealership well-informed and steel yourself for some tough negotiating. Good luck.

4 comments on “How to Buy a New Car

    • Hello, I wrote a full post on how to buy a car. Check it out – it covers a lot of steps from researching new car prices to the psychology car sales people us on you. Heading into a car dealership can sometimes feel like stepping into a lion den. Remember, you are not there to meet your new best friend. You are there to make a major purchase and you need to look after your best interest – getting the car for the very lowest possible price. If you have any other questions please let me know, Bradley.

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