How to Buy a Car

I used to sell cars. One of the biggest questions my friends asked me is, how do I get a good deal? There are a lot of places to read up on it on the internet but I will share my thoughts.

Before we discuss what you have to do, it's important to understand the business. Think about all the radio ads you hear from car dealerships. They are not trying to convince you to buy a specific brand of car. They are trying to convince you to buy the brand you want at their location. It is the only business I can think of where franchises of the same brand all-out compete for customers with each other. Those loud commercials all say we sell the most cars and if you go to another dealership, you are paying too much. No matter what car you buy, keep that in mind.

If the dealership is having a sale, especially if there is someone there representing the manufacturer on the premises to facilitate the sale, you are probably going to get the same price as any other day. No matter what car you buy, keep that in mind.

Most customers that leave a dealership without buying a car, never come back and buy. This is not lost on the people who sell cars so they will do everything they can to get you to buy today. The more of their time you take, the more likely they will do something to get you to buy. No matter what car you buy, keep that in mind.

The car business is full of uneducated alpha-males. You don't have to be really smart to sell cars and most people who sell cars only have a high-school education. I'm not saying that many are not very good at what they do, if they stick around, they are good at it. However, a good car salesman is good for the dealership, not necessarily good for the customer. No matter what car you buy, keep that in mind.

Now that we have a bit of background, here's what you do to get a better deal.

Do your research. You can build and price your new car on the internet. Take advantage of this. Build the car you want with the options you want. Know what price the car you want is. Print it off, and take it with you. Then you have have information with you. 

Call ahead and make an appointment. This will save you a lot of time, especially in the winter. They will have the car you are interested in up front and warmed up. A lot of the background items will be taken care of before you arrive. If you know someone who sells cars, you can set your appointment with them and you won't end up with a salesman that you don't like.

If you have a smart phone, load a payment calculator app and know how to use it. Put all the numbers in to see what you are actually paying. It is not unusual for the desking manager to pad the deal with a couple of thousand dollars in the beginning if they think you are going to try to negotiate the price down. That way you may still end up paying full price but you think you have worked a good deal. If you use your payment calculator after each price is discussed, you will protect yourself and throw the dealership off their game.

Take a notebook and write your own notes. As the process moves forward, refer back to your notes. If there are things you want in the deal, that they do not want to make happen, they will try to get you excited to buy a car and forget about some of the details. They don't want to deal with things like winter tires and rims. If you bring it up early they will try to get you to focus on the car. If you roll winter tires into the deal, you will be paying for them. Make sure you know much they are charging for each of the extras.

When they ask you where you want your payment to be, go low. Don't give them a range. The only number they will look at is the highest number. If you say $450 to $500 a month, all you have said is $500 a month. If you can comfortably handle $500 a month, say $200 bi-weekly. They will most likely quote the payment bi-weekly because the number is smaller. Keep in mind that if you pay bi-weekly, there are 26 payments a year. Twice a year, you will be paying three times in a month. There a lot of ways to get you into the payment you want. They can put a bit more money into your trade. They can reduce the price of the car. They can stretch your payments out over a longer term. The only way they want to reduce your payment is to stretch the term because that doesn't cost them any money. If the full price doesn't fit into your stated budget, they will try to get you to spend a few dollars a payment more. If you quote well under what you are comfortable with, and stand your ground, you can negotiate them into something close to what you want. You also need some room in your payment to take care of the the items sold to you in the business office.

The manufacturers often have rebates available. Make sure they are applied to the price of the car. There should be no effort to get the rebate. It doesn't cost the dealership anything to apply the rebates. Don't let the dealership stop at the manufacturers rebates. They still have some room to move.

If they don't have the car with the features you want, they will try to switch you to something on the lot. It may have more features or less. If it has more, you are in a great position. You can go in and say, I didn't want that feature and try to get a price reduction because of it. You may not get the option for free but you may get a substantial reduction. You have to stay on that point. If you let it slip, they will try to get you to forget about it. Take notes about what is on the car that you don't want, and refer back to it.

Don't be afraid to get up and walk out if you don't like the deal or how you are being treated. Remember the golden rule, he who has the gold makes the rules. You are the person with the money. All the dealership has is a car for the sole purpose to sell. In the end, the customer holds all the cards. You can just get up and walk out and you are in the same place you were when you walked in. Even if it is the car is a perfect fit, you don't have to buy it from them. You can go to the dealership down the street and have them dealer locate the car you were just negotiating on. If you don't like the deal, don't agree to buy the car.

The dealership will probably not give you numbers unless they think you are going to buy today. If you walk out with numbers you can go to the competition and they will beat it by a couple of bucks every time. This is why you have to have a low budget. The dealership is not going to try to get the price below your budget. So if you say $200 bi-weekly, the price will magically come out to about $205 bi-weekly. They will fiddle with the term or put a bit more into the trade to get the payment where you want it. So, if you know this, use it. If you want to be at $200 bi-weekly, say $175. They will stretch the term but you will get the payment you want.

Ask specific questions. They will try to gloss over the details that may cost you more than it should. So you can protect yourself by asking what the price is for that feature. Don't settle for the about $300 answer. We have the technology for them to know exactly what the package costs so find out. This is critical if it is a feature that you don't want. Write down the number in your notes and refer back to it when you are working out the price.

When it's time to work out the financing remember the Business Manager is really just another salesman. They are going to try to sell you an extended warranty, rust proofing, undercoating, and a bunch of other options. Remember, everything is in negotiable in this business and the margins in the business office are huge. People let their guard down and everything they gained on the sales floor goes out the window on the business office. 

I can't speak for other jurisdictions but in Ontario, cars are specifically excluded from the 10 day cooling off period under the Consumer Protection Act. Once you sign and give a deposit, you own the car. There is no legal protection to back out of the deal. Be aware.

What it really boils down to is car salesmen try to get you to forget about the the things that will cost them money and to buy a car today, preferably one that is on the lot. They try to take advantage of the fact that you don't negotiate a car deal everyday but they do. They will use their process to help you buy a car on their terms. If you take your own notes, check everything with a payment calculator and remain firm on your position you can and will get a good deal. There are scummy and honest car salesmen out there. In reality it doesn't matter what kind you get if you protect yourself and the easiest way to protect yourself is to know what they are trying to achieve and how they are working to get there.