06 August 2011

Car Shopping

Because I’m an automotive enthusiast, my parents recently asked me to go with them to help them find a new car.  I was happy to lend them my expertise, so we went to a Mazda dealership and a Kia dealership, as well a couple used car lots (but only because we were also looking for a car for one of my younger brothers).  They eventually decided on a Kia Soul, although they spent a good portion of their time looking at a few different Mazda cars.

Anyway, the reason I bring this story up is because I wanted to say that, in my experience, everything that is said about car salesmen appears to be false.  The guys we dealt with weren’t shady and didn’t try to sell us unnecessary crap, or try to take advantage of us in any way.  This was true about the salesmen at both the Mazda and Kia dealerships.  The salesmen at both were honest and straightforward, and we got a great offer on the Kia Soul and really good offer on a Mazda5.  Of course, it probably helped that my parents provided their own financing, and that I was carrying a copy of Consumer Reports’ New Car Buyer’s Guide while we were browsing vehicles.  As such, I have come to a few conclusions.

First, always provide your own financing.  Dealers make a good deal of money on financing, and will usually try to negotiate monthly payments that you can afford and are willing to agree to.  If you have your own financing, you are unlikely to be taken advantage of, and are more likely to get a good deal.

Second, know a fair price for the new vehicle you want to buy.  This is where Consumer Reports comes in handy, for it provides the dealer’s invoice price, which is basically how much the dealer has to pay the manufacturer; knowledge is power, after all.  If you finance separately, you are not going to buy the car below invoice (unless it is a very unpopular model, which indicates that it is probably a turd), so it is helpful to know how low they can go on price.  Invoice plus a couple thousand is a fair price, depending on the specific car you’re buying, and you shouldn’t begrudge them their profit; they are providing you a service, after all.

Third, negotiate a trade-in separately from the purchase of the car.  Get a fixed price on the car you want and assurances of said price, and then get your trade-in appraised.  Negotiating a trade-in and purchase at the same time is a good way to get ripped.  That said, you should know the Blue Book value of your car before you enter the store.  You should also be prepared to accept a fair price for your trade.  The cars we traded in were, in all honesty, crap.  We got a decent amount for them (far more than we deserved, I thought), and we were happy with that.

Car buying should not be a difficult process for anyone.  Take of your own financing in advance, be as informed as possible about the car you’re buying and the car you’re trading in, and negotiate each aspect of the transaction separately and fairly.  Basically, be shrewd but fair.  If you do this, car buying should be hassle-free, and you won’t really have to be worried about being ripped off.

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