Last week, we wrote a novel about our recent car buying experience. For those keeping track at home, we’ve now bought three used cars in our marriage. So we’re pretty much experts on the subject. (This is where a sarcasm font would come in handy.) And while our cars haven’t been the most exciting rides (Focus, Corolla, RAV4 supppp!), we’re proud that we’ve paid for each of them with cash. We’re obviously still a little wet behind the car-buying ears, but we’ve picked up some tips, tricks, and rules that we thought we’d share should you find yourself in the market for a car anytime soon.
These tips are mostly geared for buying used cars with cash at a dealership, but most of these still apply to any type of car purchase.
- Set a budget. Don’t start looking at cars until you know what you can afford. If you’re buying it with cash (which you are, right?), make sure that your budget doesn’t cut into your emergency fund. It’s okay if your budget limits what you can buy — that’s sorta the point. Be happy knowing that you’ll own a car that you can afford.
- Stick to what you know. And limit what you decide to know to three types of cars. The worst thing you could do is show up to a dealership with a vague idea of what you want and let them take you around the lot. They’ll happily show you a bunch of options that happen to be out of your price range and will make them the most money. Know what you need, what you can spend, and what you should expect to spend for it.
- Use the Internet, young Jedi. When it comes to researching your car purchase, these sites are your friends:
- TrueCar.com — A great resource for researching market value by showing you what others have recently paid for that same car.
- KBB.com — Kelley Blue Book is the gold standard for car pricing. This is a great place to start when you start talking numbers.
- Edmunds.com — After you’ve appraised the value at KBB, get a second witness at Edmunds.
- ConsumerReports.org ($7/mo) — We borrowed a few Consumer Reports magazines and they were super helpful when we were deciding on which cars to consider. Their reliability and overall used car reviews are unmatched and should help you steer clear of lousy models.
- Give yourself time. We broke this rule because of our unusual circumstance, but ideally you’ll want to have at least two weekends to buy a car. This will help give you time to research your options, test drive, get some numbers to chew on, and slow the process down. Remember: this is a major purchase. Don’t rush it.
- Leave your kids at home. Car buying is stressful. Car buying with a screaming baby and nap-deficient toddler is impossible. Avoid the extra stress and leave them at home. But if you have children in car seats, do bring those and try them out for size in any cars you’re considering.
- Bring a car friend. If you’ve got a friend that knows cars, bring them along. This is a must if you are planning on buying your car off Craigslist. If you don’t have a friend, take the car to a mechanic you trust and have them scope it out for a small fee. It’ll be worth the price if they end up saving you thousands on a lemon.
- Never buy a car on your first visit. “But it’s the perfect car!” Don’t care. Just don’t. This rule is important for a few reasons. First, it’s a test of willpower — prove it to yourself that you’re in control of your spending. Second, it buys you some time to let your emotions simmer and allow logic to weigh out the purchase. And finally, it proves to the dealer that you aren’t going to be an easy sell.
- Show me the CarFax. Looks like the commercials work. But seriously, get a CarFax report. If you see the words “branded” or “salvage” or “rental” or “fleet,” steer clear. There are countless horror stories that drown out any happy endings.
- If it sounds too good to be true, it almost definitely is. In fact, it probably includes one of the four stay-the-heck-away words from the bullet above.
- Get a few quotes. For starters, you’ll want to have a good baseline of pricing to get a sense of what to expect. It will likely help you narrow down your choices and know which dealers are giving you the runaround on fees and shady sales practices. And when you finally get around to negotiating, you’ll have some real, tangible leverage.
- Negotiate the price beforehand. You can pick your car, negotiate the price, and wrap everything up without ever stepping foot in the car dealership. If you hate in-person confrontation and the power of negotiating from the comfort of your home, negotiate with the dealership’s Internet Sales Department. Just email back and forth, get to a price you’re comfortable with, and agree on terms before seeing the car in person to make sure everything checks out.
- The only price you care about is the “out-the-door” price. Forget the price you see on the sticker. Forget the price you see online. The only number you should care about is the one you’ll be writing on your check. So as soon as you’re ready to talk numbers, get to the “out-the-door” price as soon as possible.
- Ask them to break it down. After you hear your out-the-door price and that punch-in-the-gut feeling subsides, ask to see a breakdown of the costs. The full invoice will show you each and every cost that the dealer is charging you. Sales tax, title and registration, and a modest doc fee (under $300) are expected. Anything else is probably fair game for negotiation. Your best chance of bringing the out-the-door price down is negotiating line by line.
- Kick the tires and the stereo and the… It’s a no-brainer to test drive any car you’re planning on buying. But less obvious is making sure that you’ve inspected everything on the car. Speakers, headlights, power windows/locks, tires, spare tire, etc. On our very first car purchase, we made the mistake of assuming that the car had A/C. It was winter and we didn’t think to check, but apparently A/C is not a basic human right and we were left driving all summer long with the windows down.
- If something’s broke, negotiate to get it fixed. Hopefully you’re not buying anything that’s too broken, but most used cars aren’t in perfect condition, either. On our RAV4, the passenger side door handle was broken. And while we weren’t able to negotiate to have it completely repaired, we were able to get them to buy the part. On our previous car purchase, we were able to get new tires installed. Never be afraid to ask.
- Play good cop, bad cop. If you’ve got a significant other, bring them along to help in the negotiation. When Joanna and I started talking numbers, I played good cop — more vocal, more willing to move the process along, etc. Joanna (naturally) fit the role of bad cop — more skeptical, more inclined to get up and leave, more budget conscious, etc. The good cop’s role is to get the obvious sales BS out of the way and get to a good working number. The bad cop’s role is to squeeze the final juice out of the negotiation or threaten to walk away. In effect, the salesman has to negotiate twice to make the sale. In our most recent purchase, I was able to knock $400 off in the initial negotiations and Joanna was able to bring the price down the final $200.
- Do you take credit? If you’re paying with cash (and you’re responsible with plastic), ask if you can pay with a credit card. Most dealerships have a maximum chargeable amount ($3,000 in our case), but something is better than nothing. Put the maximum on your credit card and pay the difference with a check. And don’t be stupid: pay it off in full immediately or don’t use a credit card.
- 15 minutes could save you… Another commercial tagline, another piece of worthwhile advice. You’re not going to be able to drive the car off the lot unless it’s insured. If you’ve narrowed your options down to a certain car, call your insurance rep beforehand or shop around for the best quote on that particular car BEFORE you buy the car. You’ll have more time to get the best deal at home than at the dealership.
- Stick to your budget. Don’t let a car salesman or a fancier ride raise your budget. Stick to your guns and walk away knowing you bought a car you could afford. Better yet, bring the cash in an envelope and force yourself to only pay what you’ve got in your hands.
- Celebrate! You’re probably exhausted and relieved and worried about spending that much money. But if you stayed on budget, you deserve to drive your new-to-you car to Dairy Queen and enjoy a refreshing, icy treat. Enjoy the fruits of your car-buying labor.
While we’d love for this list to be exhaustive, we have a sneaking suspicion that a lot of you have some nuggets of car-buying wisdom out there. So shoot: what’s the best tip you have for buying a car?