Financial well-being February 24, 2015 By
Buying a car is typically a very stressful situation. For most, it is the second largest purchase we make. Personally, I have bought and sold many vehicles in my life. Cars are my pastime and something I’m very passionate about. I would estimate I've bought and sold more than 30 vehicles in the last 10 years. Through trial and error, I have accumulated many tips about the car buying process.
Buy Used – In my opinion, the best cars to buy are cars or trucks that are 3–7 years old, well maintained, accident free, have no modifications, and have low mileage. By buying used, the huge initial depreciation has been taken by the previous owner.
Do Your Research – Through the Internet, I research the pros and cons of the model I’m interested in. Usually cars that are in the first year of production have some bugs that need to be worked out, so I try to avoid those.
Shop Online – First I search online for cars that meet my criteria at sites like Cars.com, Craigslist, and eBay. When I find a car listing I’m interested in, I use the listing information to search the NADA (www.nada.com) and Kelly Blue Book (www.kbb.com) values for comparison. You can often find great deals working directly with private owners, so I like to call these first. One downside of buying privately may be that there are issues with the car that require additional expenses in repairs that you don’t find out about until after you buy it. While an upside of buying from a dealership is that they will usually give you at least a short term warranty which takes away some of the risk of potential problems with the car.
Buying from Car Dealerships – It’s always better to buy a vehicle from a dealership near the end of the month when sales managers are working hardest to meet their monthly goals. Sales representatives are usually on a tiered commission plan and are more likely to persuade their managers to take what is called a “skinny deal” in order to meet quotas. I also ask how long the car has been on their lot because the dealer is going to be much more anxious to sell a car that has been on the lot for 120 days than he is for a car he traded for yesterday.
Making the Deal – Whether buying privately or from a dealership, I never let them know how badly I want the car. When I can, I try to shop locally to support my community, but if I am looking at other cars at other dealerships, I’m honest with them by letting them know. I let them know, I have options, but would prefer to do business with them. If the car I’m looking at doesn't have all the features I am looking for, I let them know I might be willing to settle for their car and live without certain features if the price is right. When it comes to dealing with dealerships, I try to avoid getting into the “what kind of payment do you want” conversation. I stay focused on the car’s total price to ensure I’m getting a good deal on that car and its real value. In order to focus on the total price, you must go into the car buying process knowing your budget and what that total price will look like for you monthly.
The process of buying a car can be trying on your emotions, but it doesn't have to be. Never take the negotiation process personally, and keep your “game face” on throughout the process. Do your research, search for the best deal, and hold firm to your budget and what the car is really worth and you will get that great deal you were hunting for.
