Buying a car is one of the most daunting task that the majority of us have to do at one point or another. There are lots of things that can go wrong and will go wrong if you do not know what to look for.
The absolute worst kind of car buyer is the payment buyer. A payment buyer is a buyer who shops for a vehicle with the car payment being the primary focus. Now, let me clarify this. Payment is important. You don’t want a payment you can’t afford comfortably monthly. However, it should not be the sole focus of your new purchase. I’ll explain this in detail a bit later. Know before you go how much you can comfortably afford and keep that in mind when working numbers. Use simple math and try not to get lost in the figures.
I just recently purchased a new car and the salesman presented me a new version of the old four square. It had the vehicle information I was purchasing, my contact information, and a payment schedule showing my requested lease terms and then payments for each. Was all of the information accurate? Sure. Was there enough information provided for me to make a very intelligent buying decision? No.
The salesman then asked me which payment worked best for my budget. Truthfully, I could afford any of the payments on the sheet and be within my budget. But with my experience, I knew we were just getting started. I made a list of things I needed to see for my salesman to retrieve. Here they are.
MSRP: This is the manufacturer’s price for the vehicle. I like to see this on paper for a few reasons. I need to make sure this is the exact car I drove/wanted/saw. MSRPs fluctuate greatly so I need to ensure the car we are working numbers on is the car I indeed plan to leave with. I also need to ensure that no market adjustments have been added on top of the MSRP. A market adjustment is extra profit for a dealer. Pure profit from your pocket to theirs. For example, a hard to get car may have an MSRP of $40,000 and the dealer may put a $5,000 market adjustment on the car. Supply and demand has a lot to do with this.
Selling price: The selling price is the price they are selling me the vehicle. This should include all discounts and rebates. There should be a sizable gap between the selling price and the MSRP. If there is not, you are not receiving good discounts.
Trade value: If you have a trade in, you also need to see the value the dealer has placed on your car. In my case, I knew I could get at least $37,000 for my trade as it was close to book value and another dealer placed that figure on it. Prior to me asking for these items listed out, I would not have known the dealer only wanted to give me $34,000 for my trade. Again, could I afford the payments with my trade valued at $34,000? Sure! But I could also afford a lot less payment which makes me happier. Why spend more when you don’t have to? Would you rather pay $400 or $270? I think I know your answer.
Rebates: Rebates generally come from the factory. Be careful with rebates because some dealers withhold them. This just happened to me. I knew there was $1,000 lease cash available on the vehicle I was purchasing and the dealer did not show me the lease cash I was eligible for. The deal was worked without the lease cash which was not appropriate. When I asked about the lease cash, I was told I was not eligible. This was completely inaccurate. I had read all the fine print, my credit is excellent, and I knew I could buy whatever I wanted with rebates in there. I informed the salesman that there was $1,000 lease cash plus $500 in car show cash available and he was not aware of it. I then showed him and his manager my documentation to which she replied, “Oh rebates just changed and I was out yesterday so I missed these!” Sure you did is what I was thinking. That would have worked had I not known those rebates were out for at least 2 weeks :-). Again, use Automodeals or do all of your homework. I saved myself $1,500 in just rebates not including discounts.
Drive Out Price: The drive out price is the final price that should be on your buyer’s order and this includes the selling price of the car, taxes, and any fees like road and bridge. I always ask for this before I go to finance so I have a record of it in the event it changes. I have purchased probably several hundred cars at this point and every now and again, this happens. It helps to have a copy of your documents handy so you can go over each item line by line.
With all these figures placed in front of you, this is a good starting point to begin your negotiations. These figures are the very basis of a car deal. You cannot make an educated buying decision without them. I’m happy to report that I saved myself over $4,000 on purchasing a brand new car. The payment dropped more than $130 bucks a month after negotiating the discounts and applying rebates. Without my experience, I would have been paying a lot more for the same car. In essence, I shaved off right over $5,000 in lease payments in addition to my $4,000 discount. If there are any questions, I would be happy to answer. Remember, get all the information you need and ask questions.