Car Buying Tips - Being Smart - Get Wise
Paul Barrett's 20 Top Car Buying Tips
If you don't want to get cheated, ripped-off, high-pressured, scammed, hoodwinked, swindled, conned, jacked around, screwed, suckered or fleeced.
On this page are Paul Barrett's 20 Top Car Buying Tips. These tips will help you save money and get a great deal on the car you buy.
1. Eliminate Depreciation
One of the best ways to save money on a car is to eliminate the massive depreciation that occurs during the first three years of a new vehicle. If you really don't need a brand new car, buying a 2 or 3 year old vehicle can save you a fortune. On some autos you can save up to 50% of the cost of a new vehicle by purchasing something 3 years old. Through the years, the IFI has purchased several vehicles with well over 100,000 miles on the odometer. In fact, we went out of our way to purchase vehicles that were run down with mechanical problems, We purchased and drove these vehicles to prove a point. No matter how run down a vehicle is, in 90% of the cases it is exceedingly less expensive to purchase, operate and to maintain than a new vehicle. .
2. Three Negotiations
A new car purchase is three separate negotiations: the price of a car, the price of a trade-in and the financing. The salesperson always tries to lump these items into one package deal. This is where most people lose. They win in one or two of the areas but then the salesperson beats them to a pulp on the remaining item. When the dealer wins, they win big, and the customer loses an enormous amount of money.
3. Stick to your Budget
Before you start looking for a car, know what your budget can afford and stick to it. Low interest rates are great, but there's more to the negotiation process than low rates. In fact low rates are an enticement to get you into the dealership to make money on something else. Another problem with low rates is that you can still purchase a car that is too expensive and drag the payments out for years. you should match the car you buy to your overall budget. Once you know your budget, stick to it.
4. Check your Credit Rating
If possible pay cash. Believe it or not dealers make more on the financing of your vehicle than they do on the actual sale. Most zero-percent financing deals will usually offer you an option of getting a larger rebate if you don't take the zero-percent financing. If you need to finance your car, it's wise to spend as much time lining up low cost financing as you do negotiating the price of the car. What's the point of getting the car at dealers cost if you end-up paying thousands of extra dollars in financing? Either pay cash, or get a low interest loan. Which brings up an important point, you will never get the low financing rate if you don't have the best of credit. Check your credit and if possible repair any negative items.
5. Forget the Status Symbol
Unless it is absolutely necessary, and you can truly afford it, it's recommended that you forget the status symbol. Trying to buy status cost too many people their financial independence. Many are unable to afford the car and lose it. A vehicle should be reliable transportation that gets you from point A to points B. The more you can view your vehicle as transportation and less as a status symbol the more likely you will purchase an affordable vehicle that will save you a ton of money.
6. Buy On-Line
Unless you buy on-line or join an organization like the IFI and receive a discount, haggling is virtually essential. Getting a great price on you purchase is extremely important.
7. Do your Homework.
Before you drive to the dealer and start the negotiation process, do your homework. Research the costs of the vehicles you are interested in. To get a great price you will have to negotiate. That requires work and knowledge. To understand car pricing, click here.
8. Learn to Haggle
The dealers profit is the difference between invoice (the price they pay) and sticker ( the price they would like you to pay). However, there are factory incentives and holdback allowances, which gives the dealer extra profit. That means you may be able to buy cars below invoice. By understanding the price structure and the net price the dealer is paying for the car, you can haggle for a great price. It is recommended that you learn this art and how to apply it to your auto purchases.
9. Time your Purchase
The best time to buy a car is when sales are slow. Other times are right before the new-year models are being shipped, at the end of the month and the last hours of the day. Also hot-selling cars have high price tags and little room for negotiation.
10. Negotiate Price - Not Payments
Always negotiate for the price of the vehicle not the monthly payments. When negotiating for a new car always: Think Price - Not Payments!
11. Buy What's on the Lot
It's easier to negotiate a deal on a car that's sitting on the lot versus one you have to order. If the car is close to what you want, go for it. Otherwise order it new. You have to live with your decision, if a car is not close to what you want, you may have to order it. If a car on the lot is close to what you want and has extras, you may be able to negotiate and get those items for practically nothing. Stick to your plan and don't be talked into paying for items you really don't want.
12. Control Your Emotions
Whoever controls their emotions will generally win in the negotiation process. If you get too excited by the test-drive, the soft feel of the leather seats, or that new car smell, you will lose the game and the dealer knows it. Also if you allow yourself to get angry, once again, you will lose. Getting emotional means losing money -- Remember that. Control your emotions and win!
13. Walk Away
Don't be embarrassed to walk out. The dealer is trying every trick in the bag to keep you in the showroom where they can grind you down. If negotiations are not going your way don't be afraid to walk out. The key to walking away is to never walk away in anger. If you walk away, you may be walking back. If you leave on friendly terms you can come back and start back in the negotiation process. If you leave and never come back, you wasted your negotiation time.
14. Start with the Internet
The IFI has an On-line quoting system. We also have the IFI Discount Buying Club. The IFI is cultivating relationships with area dealers to bring you a low no-haggle price. We believe the best way to start you car buying process is with our On-Line Quote. This will give a great price right from the start. In fact, in many cases the price is difficult to beat unless you are willing to bargain like a bull dog.
15. Compare Apples to Apples
When comparison shopping, always compare apples to apples. Don't dealers quote you a price unless you use the exact same vehicle with the same options. Every dealer pays factory invoice. When you comparison shop, you need to determine which dealer will sell you the identical car for less. Who's willing to bargain? That's the question. So always compare the exact car when obtaining prices.
16. Don't Pay for Extras
There are some extra expenses that you may have to pay for and they include: taxes, registration, licenses and destinations charges. However when negotiating don't pay for any fabricated dealer charges such as: handling, sales charges, floor charges, or delivery charges. Dealers simply add an extra cushion of profit on top of the sticker price. You don't have to pay these charges. Also skip the extras like rust proofing, pin striping, undercoating, scotch-guarding, detailing and other decorative features. These are extra expenses you don't need. And if you thought you needed them, you could get those items cheaper outside the dealership.
17. Buy the Ugly Duckling
For a good deal get a car that no one else likes. Try for an ugly color, or a model that no one is buying. The dealer will be happy to unload a car that won't move. Chances are you will get it below invoice.
18. Get Top Dollar for your Car
If you sell your car yourself, you will get the most money. It may be an aggravation, but it's possible to make thousands more selling it yourself. It's worth a try. If you are going to trade the car in at the dealership, don't talk about it until you arrive at a price for the new car. Remember, you are negotiating 3 deals -- the new car price, trade-in value, and financing terms. Negotiate them all separately.
19. Don't Trust the Salesperson
The salesperson will act as if he is your best friend and looking out for your best interest. The truth is, he is trying to maximize his commission. To make money, he needs for you to pay the highest price possible.
20. It's a Game
It's a game with high stakes and it's your money on the line. Be cool , be calm, and be patient and disciplined. Be wise and knowledgeable. Play your cards right and you will beat the devil at his own game. Remember, he needs your business more than you need his car. There's always a dealership somewhere who will deal. Play the game with skill, and wisdom -- be a winner.
In the Financial Wisdom Seminar we teach you how to save money on all your purchases. Let us help you get wise.
Remember, my job is to help you become financially stable, secure and independent. I will do my best , you do your best.
Your author and friend,
Paul Barrett
