Car buying tips

[jsm4182]

I've been getting fed up with my car(2005 Suzuki Aerio SX) and am starting to look at getting a new car. I've pretty much decided on what car I want(2012 Subaru Impreza).

Does anyone have any tips/strategies on how to have the best car buying experience? How to get the best price, best financing, best trade in value?

 

[ender land]

Does anyone have any tips/strategies on how to have the best car buying experience? How to get the best price, best financing, best trade in value?

Unfortunately, this:

I've pretty much decided on what car I want(2012 Subaru Impreza).

makes it harder.

As far as best price/etc, try emailing/calling dealerships around the area you are in. If they know you are serious they will probably be interested in negotiating. If you say something like "I'm kinda interested in this car, can I get a good deal?!" they might not bother back with a serious offer. But something like "I am interested in this 2012 Subaru Impreza you have in stock. My purchase timeline is ASAP (or whatever it is) and I would be trading in a 05 Suzuki Aerio, with XX,XXX miles and in XXX condition." could work a lot better.

If you are in a rural area without a lot of dealerships I might not try that, though, as your options will be far more limited.

As far as financing, does your bank offer loans? My bank was able to get me a far better loan than anything the dealership could do. Having it "pre-financed" helps too since it means you can tell the dealership "I have financing as well" meaning that is one fewer hurdles from their perspective.

Tradein value - figure out how much your current car is worth. If you don't know what it's worth, you probably will not get the best value.

 

[Gregg2]

Go to Subaru's web site and select the color and options you want. Then submit a request to a few local dealers. They will e-mail you with an offer. Negotiate from there. Worked for me, but I bought a Mitsubishi.

 

[leftywamumonkey]

Unfortunately, this:



makes it harder.

As far as best price/etc, try emailing/calling dealerships around the area you are in. If they know you are serious they will probably be interested in negotiating. If you say something like "I'm kinda interested in this car, can I get a good deal?!" they might not bother back with a serious offer. But something like "I am interested in this 2012 Subaru Impreza you have in stock. My purchase timeline is ASAP (or whatever it is) and I would be trading in a 05 Suzuki Aerio, with XX,XXX miles and in XXX condition." could work a lot better.

If you are in a rural area without a lot of dealerships I might not try that, though, as your options will be far more limited.

As far as financing, does your bank offer loans? My bank was able to get me a far better loan than anything the dealership could do. Having it "pre-financed" helps too since it means you can tell the dealership "I have financing as well" meaning that is one fewer hurdles from their perspective.

Tradein value - figure out how much your current car is worth. If you don't know what it's worth, you probably will not get the best value.

I have to disagree with some points. You shouldn't tell them a deadline you have to buy a car by, you don't want them to pressure you thinking that you absolutely need to purchase a car. Also, you should discuss the trade in after coming to an agreement on the car you want to buy, never at the same time, take things one at a time. When negotiating a price, don't negotiate how much you will pay for x amount of months, but rather the overall price. This way you won't lose track of how much you're going to have to pay, after interest as well.

It may help to call around and see which dealer can give you the lowest price, then use that price to see how low a salesman could go. Also call your insurance agent, they can give you an estimate for how much the dealership pays for the car. Websites can also help you see what people are paying on average. It can also be helpful to get quotes for the Impreza's competitors to help "haggle" the dealer. If you don't like what they offer you, you could always go back the next day.

Also, a myth is that going during a time when business is slow can work to your advantage. After all, the salesmen do work for commission and going during work hours or a holiday can motivate them to make a sale. Just a myth though.

 

[wordoflife]

Also, a myth is that going during a time when business is slow can work to your advantage. After all, they salesman do work on commission and going during work hours or a holiday can motivate them to make a sale. Just a myth though.

Best time to go is at the end of the month. They'll try pretty damn hard to make a sale to finish before Feb 1st. You come February 1st and they won't even talk to you.

 

[ECUpirate44]

Best advice I can offer is go into negotiations with a REASONABLE number in your mind, and don't accept it until your satisfied. This is the route I've gone several times. If they don't accept your offer, you can be sure they will remember you at the end of the month. I basically showed that I was in no rush to sign a lease (even though I was) and I just said "no thanks, we're too far apart."

 

[einmusiker]

truecar.com

expect to pay a little more than invoice to get a good price. If you pay retail you're wasting money

 

[jaynone]

I've been getting fed up with my car(2005 Suzuki Aerio SX) and am starting to look at getting a new car. I've pretty much decided on what car I want(2012 Subaru Impreza).

Whats wrong with the suzuki? I was considering buying one.

 

[puma1552]

The easiest way to do it is when you are absolutely serious about buying, wake up early on a Saturday morning or whatever when you are ready to sign papers, build the car you want online, and send it out to all the dealers in the area and name the price you want (around invoice+any rebates at time of delvery) and tell them that if they honor your price, no BS, and agree to the price in the response (no "well come on in and let's talk about it"), you will come in that day and sign papers, get in, get out.

Most will blow you off, but you may get a guy who wants an easy, quick sale so he can go hassle someone else and try for two.

Also like mentioned above, worry about the price of the car--not the payment. If you worry about the payment, they will do everything they have to to get you any car you want at your monthly payment, and screw you hard in the process. Worry about the price, not the payment.

Also I agree, don't mention the trade until you've agreed on a car price.

 

[UlsterApple]

Worked for me, but I bought a Mitsubishi.

Obviously worked TOO well....

If you buy at a traditionally quiet time of year you'll find dealers willing to cut prices to sell units and eke up their quota. I've never bought a new car but the last one my wife bought, i was amazed how much the dealer was prepared to offer in terms of accessories never mind dropping the price.

 

[vincenz]

You can't go wrong by using edmunds.com in terms of figuring how much people around your area are paying for the car. First things first, figure out exactly what you want. Make, model, trim, options. That's the hardest part of the whole ordeal. Once you have that down, all you have to do is walk into a few dealerships and work out the numbers.

 

[Gregg2]

Obviously worked TOO well....

????
I wanted the car I bought. I was trying to make the point that it worked on their web site but other brands might not give you the same experience.

 

[Tomorrow]

Get financing (third party) before you even begin looking. That gives you leverage in those negotiations, because dealers might sometimes give you a deal on the purchase price thinking they can make it up with the financing. You don't need to tell them right away that you already have good financing.

 

[RITZFit]

autotrader.com is a good place to compare prices. I tore that site up when I was searching for a new car. Lots of dealers post there.

 

[jsm4182]

Thanks for all the advice. I've had some emails back and forth with a couple of dealers, will be meeting with at least one of them next weekend. I've been using truecar.com to get better pricing info, and so far the initial offers I've gotten from dealers aren't that far off that price.

Whats wrong with the suzuki? I was considering buying one.

There are a couple of issues I've had. The main one just being that I have put so many miles on it its starting to get to a point where there is a lot of maintenance to be done, more than other cars I've had that are older with more miles. When work is done it takes longer to get parts than other cars, I had to go a month without the car after a small accident cause the body shop was waiting on parts for three weeks. It doesn't perform as well in inclement weather as it used to, and with the weather we have around here I'd rather have all-wheel drive.

 

[Avatar74]

I've been getting fed up with my car(2005 Suzuki Aerio SX) and am starting to look at getting a new car. I've pretty much decided on what car I want(2012 Subaru Impreza).

Does anyone have any tips/strategies on how to have the best car buying experience? How to get the best price, best financing, best trade in value?

My first piece of advice is buy used... The first owner of a car has to bear the majority of its depreciation. Without exception. The second you drive off the lot in a new car, you've just lost anywhere from a fifth to a half of that car's MSRP. That's no small change.

But if you bought a car even a year old, you'll save yourself a small fortune and get as much out of that car and more than the original owner did.. maybe minus one year of warranty but do the math on what the potential repairs may cost you versus the marginal cost of having bought the car new.

I have 85,000 miles on my Honda and so far no repairs since it's been off warranty, and I expect to keep it another 100,000 miles. If the difference in price between new and a year or two old is greater than the probable cost of any repairs (you're going to pay for routine maintenance either way unless you buy a luxury car with maintenance in the warranty), then it ought to be a no brainer.

If you're dead set on new, then you're going to pay a premium one way or the other... then my only other advice there is wait until the 2013's are hitting the lot. Otherwise you'll have very little negotiating power. Only when they're stuck with excess 2012's that they NEED to get off the lot within the next few days are they going to really negotiate.... and even then it depends on the brand and how much inventory those brand's dealers typically have sitting around.

Then, there's financing... don't ever go through the dealer. They will invariably give you some kind of deal on one side by screwing you on the other side and in the end you'll pay more than you would if you had third party financing. What you want to do is negotiate for financing and/or trade in total at or near dealer invoice, not sticker. In other words, if you first negotiate price, you've already lost.

if, however, you come and say "I have this check for this amount, that's it. I can walk off your lot with this car or not," then either you get the car you want for the price you're willing to pay, or you wait until they're ready to play ball.

This strategy works even with a TV... I bought a Sony XBR TV at a 20% discount just by going back seven times and saying "nope, this is what I can pay you... you can sell this thing today or not." Finally the guy relented, gave me 20% off right there. Never let them tell you they can't negotiate. you could negotiate on a set of teacups if you wanted to.

But in agreement with one of the earlier posts, the first thing that's going to put you at a disadvantage is your decision that it has to be that 2012 Subaru. First rule of any transaction is to never develop any emotional attachments, because a good salesperson will take advantage of that dependency and pick your pocket.

 

[jsm4182]

My first piece of advice is buy used... The first owner of a car has to bear the majority of its depreciation. Without exception. The second you drive off the lot in a new car, you've just lost anywhere from a fifth to a half of that car's MSRP. That's no small change.

Everyone has told me that, I was originally looking at used, but the advances in fuel economy on 2012 models across a lot of automakers has actually made it cheaper for me to own a new car. Taking the Impreza as an example, the 2012 gets 36 highway/27 city where as the previous few years get 26 highway/20 city. With all the driving I do for work, the monthly savings on a loan for a 2010/2011 would be less than the savings on gas with the 2012.

But in agreement with one of the earlier posts, the first thing that's going to put you at a disadvantage is your decision that it has to be that 2012 Subaru. First rule of any transaction is to never develop any emotional attachments, because a good salesperson will take advantage of that dependency and pick your pocket.

I am still open to other options. In all the research I've done so far the Impreza best fits my requirements for a new car(compact, AWD, good gas mileage). I have also been looking at the Honda Civic and Hyundai Elantra.

 

[Avatar74]

Everyone has told me that, I was originally looking at used, but the advances in fuel economy on 2012 models across a lot of automakers has actually made it cheaper for me to own a new car. Taking the Impreza as an example, the 2012 gets 36 highway/27 city where as the previous few years get 26 highway/20 city. With all the driving I do for work, the monthly savings on a loan for a 2010/2011 would be less than the savings on gas with the 2012.

Are you sure?

Let's say you consistently got 36 vs 26 on a 40 mile per day commute. That's a difference of 0.42 gallons per day, or 109 gallons a year, or $406 per year at California gas prices... keeping in mind that 36mpg highway EPA estimate is really more like about 18mpg in rush hour traffic, but then 26 is more like 12-15mpg. So let's go with that. Over three years that's $1218.

Base price on a Subaru Impreza (the one that gets 36mpg) is $17,495. Dealer retail at Edmunds.com on a 2011 with 15k miles on it is about $15,270. That's $2,225 cheaper, and that's assuming that the 2011 is in great condition with pretty nominal mileage.

That's not all. The future value of $2,225 is really:

FV = PV * (1+r)^nt

Stick that $2,225 in a no load S&P index fund (let's be really conservative and say in the next three years it'll only gain 3% annually whereas the lifetime average is 9%), and thats:

$2,225 * 1.03^3 = $2,431 is the equivalent value of your accumulated three years of savings on the used car.

That's also assuming you don't find an even more economical buy... Let's say you go downstream to a 2009 Subaru Impreza (same gas mileage as the 2011), you save $4,998 or $5,448 in future value three years down the road... or about 1460 gallons in gas or 39,420 miles of driving.

Totally your decision, but there's the math.

 

[jsm4182]

Are you sure?

Let's say you consistently got 36 vs 26 on a 40 mile per day commute. That's a difference of 0.42 gallons per day, or 109 gallons a year, or $406 per year at California gas prices... keeping in mind that 36mpg highway EPA estimate is really more like about 18mpg in rush hour traffic, but then 26 is more like 12-15mpg. So let's go with that. Over three years that's $1218.

Base price on a Subaru Impreza (the one that gets 36mpg) is $17,495. Dealer retail at Edmunds.com on a 2011 with 15k miles on it is about $15,270. That's $2,225 cheaper, and that's assuming that the 2011 is in great condition with pretty nominal mileage.

That's not all. The future value of $2,225 is really:

FV = PV * (1+r)^nt

Stick that $2,225 in a no load S&P index fund (let's be really conservative and say in the next three years it'll only gain 3% annually whereas the lifetime average is 9%), and thats:

$2,225 * 1.03^3 = $2,431 is the equivalent value of your accumulated three years of savings on the used car.

That's also assuming you don't find an even more economical buy... Let's say you go downstream to a 2009 Subaru Impreza (same gas mileage as the 2011), you save $4,998 or $5,448 in future value three years down the road... or about 1460 gallons in gas or 39,420 miles of driving.

Totally your decision, but there's the math.

I just ran some different numbers and got some interesting results to consider.

My daily commute is 106 miles, using my current cars gas mileage to calculate a more realistic average miles per gallon I should get 32mpg with the 2012 or 24mpg with a 2010/2011. The average gas price by me the last few weeks has been $3.59/gallon, which is right between the highs and lows we've had the last 2 years. At that price my gas savings would be $3.97/day, assuming 20 days a month of work thats $79.40/month savings with the 2012.

Looking at the exact models I'm looking at for a 2012, 2011 and 2010 and factoring in my cash down, trade in value, tax and interest on loans(on the loans I can get new cars are lower) the 2011 is only $7/month cheaper than the 2012 but the 2010 is $97/month cheaper than the 2012.

One problem with the 2010s though is the ones I've found so far have some ridiculously high mileage on them.

 

[Avatar74]

Looking at the exact models I'm looking at for a 2012, 2011 and 2010 and factoring in my cash down, trade in value, tax and interest on loans(on the loans I can get new cars are lower) the 2011 is only $7/month cheaper than the 2012 but the 2010 is $97/month cheaper than the 2012.

$97/mo without adjusting for future value is $3,492 in savings. I dunno about you, but even as much household income as I take in, I wouldn't balk at that kind of cash... especially in this economy where the average family isn't saving jack squat.

One problem with the 2010s though is the ones I've found so far have some ridiculously high mileage on them.

Depends. Not always a problem if it's a low maintenance car. if it's not then you have to ask yourself what your priorities are. In the case where you're driving 106 miles a day, low maintenance and getting from point A to B should be your primary concern.

So I suppose the next the question I would ask is: does the Impreza fit that role well or is there a car that fits it better?

I don't know what you mean by "ridiculously high" mileage. I mean, if you found a Honda Accord with 126,000 miles on it, you'd still have a good 100,000 miles on it for relatively low maintenance.

Then the next question, I suppose, is how long do you plan to hold on to the car after it's paid off. If you can pay it off in two years and it lasts you ten, there's obviously additional savings to be worked out there.

 

[jaynone]

There are a couple of issues I've had. The main one just being that I have put so many miles on it its starting to get to a point where there is a lot of maintenance to be done, more than other cars I've had that are older with more miles. When work is done it takes longer to get parts than other cars, I had to go a month without the car after a small accident cause the body shop was waiting on parts for three weeks. It doesn't perform as well in inclement weather as it used to, and with the weather we have around here I'd rather have all-wheel drive.

Sounds like exactly what happened with my old Suzuki.

 

[Gregg2]

Well this might not go down well with the members of the Church of Used Car Buying, but Jesse Toprak, a VP of TrueCar.com was quoted in Sunday's paper as follows:

"If you look at the purchase from a cost of ownership perspective and not just the purchase price, and if you add in the cost of financing the vehicle, sometimes new cars can actually be even cheaper propositions than a newer used car."

 

[Demosthenes X]

Look up the invoice price (what the dealer pays) at Edmunds.

Call the closest dealer, offer them a reasonable deal (say, $500 off MSRP, which leaves them some profit and you a bit of a break on price). If they mess around with you, try another dealer. Don't pay any admin fees or other BS markups. Easy.

This worked for me when I bought my car. IMO doing a little research and offering a fair price for the car is key. Since you know what you want and know what a fair price is, the salesperson should take it because it's an easy sale and easy commission for them. What's not to love?

 

[steve2112]

Well this might not go down well with the members of the Church of Used Car Buying, but Jesse Toprak, a VP of TrueCar.com was quoted in Sunday's paper as follows:

"If you look at the purchase from a cost of ownership perspective and not just the purchase price, and if you add in the cost of financing the vehicle, sometimes new cars can actually be even cheaper propositions than a newer used car."

While that is a good point, I'm not entirely sure I agree. If you buy a 1-2 year old car with fairly low miles, you will get the discounted purchase price, while it will still have the reliability of a new car. In most cases, you will still have the warranty, and many certified used cars can get an extended warranty. Modern cars are, for the most part, very reliable. In many vehicles, you won't hit any major maintenance issues until 50 or 60k miles. In addition, an slightly older car will have lower insurance and taxes/registration fees.

Of course, with the way the auto industry has been going the past few years, things have changed. I was looking around a couple of manufacturer's sites recently, and most of them are offering really low financing(Assuming you qualify). Also, given then state of the economy lately, more people have been buying used, thus driving up the cost of used cars.

Look up the invoice price (what the dealer pays) at Edmunds.

Call the closest dealer, offer them a reasonable deal (say, $500 off MSRP, which leaves them some profit and you a bit of a break on price). If they mess around with you, try another dealer. Don't pay any admin fees or other BS markups. Easy.

This worked for me when I bought my car. IMO doing a little research and offering a fair price for the car is key. Since you know what you want and know what a fair price is, the salesperson should take it because it's an easy sale and easy commission for them. What's not to love?

One more thing to add: go to the website for the local dealer and find the name of the internet sales manager. They often have more flexibility to make deals.

 

[wordoflife]

Well this might not go down well with the members of the Church of Used Car Buying, but Jesse Toprak, a VP of TrueCar.com was quoted in Sunday's paper as follows:

"If you look at the purchase from a cost of ownership perspective and not just the purchase price, and if you add in the cost of financing the vehicle, sometimes new cars can actually be even cheaper propositions than a newer used car."

While that is a good point, I'm not entirely sure I agree. If you buy a 1-2 year old car with fairly low miles, you will get the discounted purchase price, while it will still have the reliability of a new car.

When we were looking for a [used] car last month, it was more reasonable to buy a newer Civic as it would have only costed a few grand more than a 2-3 year old Civic. Can't remember what the numbers were, but I think it was $17-18k for a used Civic but $21-22k for a new one. So I guess it depends on what car it is ... but regardless it is surprisingly true sometimes.

OP i think you should consider a used Suburu if you aren't in a rush. Used cars really aren't that bad sometimes. But if it's like the case with the Civic where which a newer one will only cost you a little more, then I'd just go with a newer one.