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Eight Steps to Buying a New Car

Edmunds.comEdmunds.com Posts: 10,059
edited April 2017 in Editorial
imageEight Steps to Buying a New Car

10 Steps to Buying a New Car on Edmunds.com: Learn how to locate, price and negotiate your next new car.

Read the full story here


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Comments

  • nell79nell79 Posts: 1
    I found this site to be of great value to us when we purchased out last vehicle. We learned quite a bit in our experience too and I wrote an article about it Get the Best Deal on a Used Vehicle
  • null_2null_2 Posts: 1
    EDMONDS.COM IS VERY INFORMATIVE ABOUT NEW OR USEDCARS TO BUY. I HAVEN`T DID EITHER YET BUT VERY SOON.
  • Someday the car manufacturers are going to realize that people are tired of the games that their dealerships play with buyers. Just look at this article, loaded with warnings about how you could get taken to the cleaners during vitually every step of the car buying process! What does that tell you about the integrity of the whole class of businesses that sell cars?

    While the internet appears to be helping buyers, I'm finding that many dealerships view it merely as a toll to gather sales leads which they then want to lure into the same sordid sales process. Price quotes are many times meaningless. It's hard to get dealerships to compete on an out-the-door price on the "same vehicle", because there is such a wide variety of trims, options, and add ons.

    Perhaps the answer is more customers knowing exactly what make and model they want, and being flexible about colors and minor cost options in the hope that within that spectrum there are cars that fit their needs at almost every dealer within a reasonable distance, then insisting on going to the dealer only to take delivery.

    I'm trying to do this right now. Hopefully it will be the first time in over forty years of buying many new cars that the memory of purchasing one won't be unpleasant.

    Wake up you manufacturers! Many of us have been ready for years to buy online in a streamlined process that allows us a level playing field in your game of "guess what the dealer really paid for this car and what he might actually accept to sell it to you".

    Can you imagine having to buy everything else you do not knowing the price you are going to have to pay? It's long past time for a change.
  • Having just found out that I was COMPLETELY ripped off in a car purchase in December 2009... I am SICKENED that state and federal officials like to play "help the consumer" but fall far short with legislation that really does nothing more than say "better luck next time."

    Short version of events:

    I was a life long Connecticut resident living in the middle of the state. My car had died unexpectedly, so I went out and, after a few test drives, I bought a car in November 2009 and it wasn't the right car for me so I traded it back to the same dealer for purchase price minus "registration fees" Those fees came to $1011.00. But I bit the bullet and took it as a "rental fee".

    The dealer showed me a 2006 Ford Fusion... When he went to get the keys for the test drive, I asked to see the carfax. The carfax report was clear. I test drove the car and thought it was a decent car.

    During the execution of documents for purchase, the dealer said that the "lender is requiring a 2 year extended warranty" I pushed forward. The car also came with "free tires for life". I had received $10,900.00 for trade on the first car and financed $7,367.00 for a total purchase price of $18,267.00.

    In January 2010, I called to get the car brought in for new tires... It was at this time that I was informed 1) I was informed I had to drive the car at least 25,000 miles before getting the new tires and 2) that the car had to have all oil changes done at the dealership and that since I had not done so, the tire warranty was void.

    In April 2010, the power window on the passenger side of vehicle stopped working... The motor worked but nothing happened. Further, if I hit a bump, the window would slide down on its own.

    In October 2010, BOTH power mirrors stopped working the same day... I suspected a fuse and check... as far as I could tell, it was not a fuse.

    At the very end of December 2010, I had moved to Rhode Island and went through registration & required inspection process. The car failed inspection due to a check engine light that was on. The check engine light was reset and codes cleared to see if there was a problem or if it was a one time code... it came back on again.

    On February 2, 2011, I took the car to a repair shop that could do further diagnosing of the issue and I was informed that BOTH catalytic converters were shot and needed to be replaced at a cost of $2,000.00 each (according to my research).

    On February 4, 2011 I took the car to a dealer to just get rid of it. The dealership offered me $5,000.00 trade... a loss of $13,267.00 in 13 months!!! I was just about at boiling point... It was about to get worse...

    The dealership stated that according to the carfax they pulled, this Ford Fusion had been in an accident in July 2007; LONG before I purchased the car. I was now livid. I asked to see the carfax which they provided and in black and white was an accident from July 10, 2007. Further, the car had been sold at auction in March 2009, September 2009 and November 2009. The dealer I purchased it from listed the car for sale on November 30th, 2009.

    Additionally, the car was practically idle from March 9, 2009 to when I bought it having been driven on 179 miles in just over 9 months.

    I am now left to pick up the pieces from a horrible deal and see what, if any, action I can take against the parties involved.

    I know this was supposed to be a short comment... guess that couldn't be done...
  • I don't see anything on so called dealer dic fees - which can ring in at $600 or more here in FL which does not have any state law on this.
  • What are dealer dic fees? just doing as much research as possible...in the process of purchasing my first "new" vehicle.
  • bradley11bradley11 Posts: 1
    I keep reading complaints about negotiating a fair deal from car dealerships. Here’s the beginning of one I just read:

    “Someday the car manufacturers are going to realize that people are tired of the games that their dealerships play with buyers. Just look at this article (Edmunds.com 10 Steps to Buying a New Car), loaded with warnings about how you could get taken to the cleaners during virtually every step of the car buying process! What does that tell you about the integrity of the whole class of businesses that sell cars? While the internet appears to be helping buyers, I'm finding that many dealerships view it merely as a toll to gather sales leads which they then want to lure into the same sordid sales process. Price quotes are many times meaningless.”

    I see this kind of frustration everywhere but let’s put this into prospective. Yes, decades ago there wasn't the internet and nobody knew what cars should sell for. You had no choice but to "believe" what the dealer told you. Then the US passed The Automobile Information Disclosure Act in 1958 that required every car to have a sticker on the window, clearly outlining, among other things, the manufacturers suggested retail price (MSRP) for every optional item, including destination charges.

    Nowadays, where most of the dealerships are corporate owned or owned by individual businesspeople, governed by a myriad of laws, they are run in a normal business environment where customer retention is of paramount importance. The industry is in a crossroad of climbing out of the old ways into the new paradigm of customer satisfaction.

    So, why all the negative discourse. Well it’s simply because this is about the only retail environment that negotiates price. Negotiation breeds adversity from the very onset. Where people genuinely need advice on a complicated piece of machinery they are afraid to go into a dealership to seek that advice because they fear the process of negotiation and bad press.

    There seems to be confusion about what a dealer pays for a car. Not that it really matters (you can't find what a dealer paid for a refrigerator, or a couch, or a big screen TV, or what Macy’s or Marshalls paid for that designer dress or what it costs to build a 2000 sq. ft. house?). I can tell you simply it’s the dealer invoice (yes the real invoice between the manufacturer and the dealership) less what was held back by the manufacturer and later given to the dealer. This "holdback" is often 2 or 3% of the base MSRP. This is what the dealer pays to have inventory on their lot so you don’t have to special order every car you buy and wait months like many countries around the world.

    So, let’s be perfectly honest and I defy anyone to dispute these facts. Using Toyota as an example, we can test some real numbers. If you take the MSRP and subtract the Invoice, then subtract the holdback, here’s what you get in terms of gross profit.



    Vehicle Gross Profit Margin
    Prius 7.72%
    Camry 9.9%
    Tundra 9.5%
    AVERAGE 9.04%


    For those non-business types, gross profit margin is the profit in dollars divided by the selling price (ie $2,332 / $30,190 = 7.72%), expressed as a percentage. From the gross profit, a business must pay for all their expenses, including salaries, rent, supplies, utilities etc. to arrive at a Net Profit or Loss.

    As I said, let’s put this into prospective. From actual Annual Reports found on the internet, here are the facts compared to a Toyota Dealership at 9.04% gross profit.

    Best Buy = 24.5% gross profit margins
    Big Lots = 40.6% gross profit margins
    Macy’s = 40.7% gross profit margins
    Costco = 13% gross profit margins
    Walmart = 24.8% gross profit margins
    Marshalls/TJ Maxx = 26.2% gross profit margins
    Safeway = 28.28% gross profit margins

    Most of these companies represent a bargain in your minds; but every single one of them pulls a greater profit from you than a Toyota Dealer would IF you purchased the car at full MSRP.

    So, what games are dealers playing with buyers? How are you getting taken to the cleaners during virtually every step of the car buying process? What does that tell you about the integrity of Car Dealers? How are you being lured into the same sordid sales process?

    If you don’t like the games (its never the dealership that starts the negotiations), go in and buy the car at the carefully researched, competitive and fairly priced MSRP. You’ll love the experience and the expert guidance you’ll get from the product consultants (salespeople). Plus you will be getting a real bargain compared to ALL the other products you buy every day.
  • mtobonmtobon Posts: 1
    This kind of insightful advice is always helpful, especially when shopping for a car can be such a dreadful experience, which I believe should be blamed on the whole American "vulture culture" business practices that always thrive in the hands of unscrupulous car salesmen. Of course, what else can you expect when the whole car business model is built around preying upon customer's good faith relying on underpaid and overworked sales people to do the dirty job.
  • mtobonmtobon Posts: 1
    This was the actual response I got when I went to the local VW dealer with my Edmund's True Market Value sheet in hand:

    "Does Edmunds sell cars?... "If they can sell for that price, then buy from them..."

    End of the story...
  • gavinkiagavinkia Posts: 1
    "If you follow our suggestions the car buying process can be fast and enjoyable. But more importantly, you will have the satisfaction of knowing you got the right car for you at an excellent price."

    Some of the worst advice possible for most consumers. Price is the most important aspect of a car purchase for a whopping 6% of car buyers but the average consumer is made to FEEL like they still HAVE to negotiate because it's the way it always was before the internet and they build up very unrealistic expectations, it's not the dealers that make it still feel like the 1960s. A least once a week I get a prospective buyer that immediately wants a $5000 discount on a vehicle like our Sorento, and then gets completely irate when they are told it is not even remotely possible. The profit we make as a dealer from a vehicle like that is $1719. Even adding a current factory rebate of $1250 to this would only give a consumer a discount of $2969 by selling the vehicle at our cost and making $0 to do it, yet somehow they expect yet another $2000 less than this again. Of course people dread buying a car and have a horrible experience, how can a customer even begin to enjoy the process or be excited about taking home a brand new vehicle when everyone tells them how to prepare for how bad it will be.

    The internet has made manufacturers far more competative than ever before. The average markup in a 2011/2012 vehicle is between 4-12%. The rough markup of a side of fries and a drink at McDonalds is somewhere around 96% but I can guarantee you never hear "I'll buy the burger if you throw in the fries and drink otherwise I"m going to Burger King".

    It's not just the car the customer is purchasing, they are buying the dealership. When a client takes the time to build a relationship with the dealer and their salesperson, the shop generally goes a step further when it is time to help them down the road. Washing their car during service, use of a loaner vehicle, discounts on needed parts, extra services performed at no charge, items that may be just outside of warranty might be written off as goodwill, etc... A buyer who fought for the lowest price or bought 1 town over to save $500 will get no such treatment from their local dealership; $500 might sound like a lot but how much is it actually WORTH over a 3-10 year life of your vehicle.

    As a sales professional, when a prospect's first demand on the lot is "absolute lowest price, i'm comparing with 5 other dealers in the region, or X dealer has priced it for this can you do better?" my usual response is to thank them for stopping by and wishing them the best of luck in their search and sending them on their way. Most don't understand why and only a few will ask why: - In the same time it takes to argue pure price for 1 vehicle and make virtually no profit I can sell 3 other vehicles at regular prices to 3 other clients who who will get exceptional service and that I will have built a lasting relationship with, (which is worth more to both of us in the end). Now I don't mind working out a deal for my clients, including some extra accessories or maintenance visits but it's no longer about price at that time, it's about value and relationship. Even if we only have a couple of hundred dollars to work with they are generally very happy when we can come up with something that works for everyone. I enjoy it when we can find accessories to include that work for a client because it means their "deal" became much more personallized and had more to do with actually satisfying their needs and they are much happier with their purchase than if they just fought over a number on a page.

    I might not sell a vehicle to every person I meet, but my own clients are always extremely happy to buy from me again and again and they send many of their family and friends to buy from me as well.

    - Highest Quality
    - Best Service
    - Lowest Price
    Guess which of the above most clients I meet are willing to sacrifice first?
  • jwpisanojwpisano Posts: 1
    I have managed a dealership for the last five years of my life. I used to get angy when I read comments like those posted about being taken advantage of or porr customer srevice. I don't anymore. Those types of situation are very much in the minority. As our margins across the board decrease, and the knowledge of our margins increases, the only differentiation that one dealership can make over the next is in customer service!! We are all well aware of this fact. 80% of the training that I do, personally, in my dealership is based around teaching my sales professionals how to interact efficiently and professionally with our customers. We train on ways to save the customers time, on how to alliviate stress in our buying process, and how to make sure that each customers has a fufilling experience no matter what thier goals are for that specific vist. The truth of the matter is that No matter how curtious or professional my staff is, they do not recieve the same in return. Last month alone, 62% of the appointments set by my associates never showed up, or called in to cancel. (Please bear in mind that the majority of these were people who had initially contacted us, either by phone or online.) We had 3 people who agrred to purchase a car and then break that agreement because they beat our price by under $100. (I do not begrudge anyone for trying to save money, but surely a professional's time is worth a little.) There are still dealers who will take advantage of a consumer whenever they can, and I despise them. Asking a fair profit for a good product and service is not taking advantage. There are very few new car dealers who would not openly invite a customer to walk into their showroom and offer to purchase any car for $300-$500 over invoice. We would welcome the oppurtunity to increase our customer base. As professional and a consumer I welcome sites like edmonds. They allow my to gather a large amount of information in a short period of time. They dont always tell the whole story though. If you are in the market for a new or pre-owned vehicle i would recommend a slightly alternative path for investigation. Use your high powered websites to determine the car that you would like to purchase. But then learn about your local dealerships. Go and talk to service customers in that dealership, see how they are treated and how they like the dealership. Call a Sales Manager, or a General Manager. (We all pick up the phone) Have a conversation, not about the exact lowest price, but about the dealership and how it runs, what it offers for its customers. When you've found a dealership and a person that you'd like to do business with the price is easy. Don't let a few hundred dollars stand in the way of doing business with a place or a person that you like! It is never worth it.
  • rnonatusrnonatus Posts: 1
    Rlee47--I agree but that was saturn's modus operandi and look what happened to them. There are too many buyers who like the thrill of the deal as well. In 70% of the world, everything is negotiated-food, clothing, etc. Dealers won't change until we become better, objective consumers, and are willing to walk away from a deal knowing the salesperson is not going to chase after us. Americans are just too picky and inpatient. :-)
  • Unfortunately, the way this article recommends buying a car is a fantasy. Using this website, I asked 3 dealers for a price on a specific model and options. One sent a lot of nice emails, but finally never offered a price and just stopped communicating. The other two first tried to steer me to cars on their lot that were not what I wanted. I finally got a price from one dealer, but then they just stopped answering emails when I accepted their price! Unfortunately, most dealers are still using the 1970's sales methods - bring people to the lot to sell them cars they don't really want with a lot of high-profit dealer add-ons. They could be using the internet to make deals and sell cars, but instead they use it for advertising and luring you to the lot. From my experience, these dealers fit the stereotype of smooth talkers who don't care if you come back - they only want to loot your wallet for as much as possible.
  • bar20bar20 Posts: 15
    No business works off gross profit margins, if they did they would be out of business in a month. Most dealers have internet sales, some are legit others are scams to get you into their showroom.

    The last vehicle I purchased was all done through the internet. The fact that I was 500 miles away from the dealer probably helped. First thing you need to do is test drive the vehicle(s) you are interested in but tell them you are only test driving today. You can ask for the internet salesman, get his business card, it should have his e-mail address on it. If it doesn't ask him what it is. Tell him you will contact him. If he wants your information just give him your e-mail address but not your phone number.

    Once you narrow down your choice then start checking different dealers inventory. If you have the internet salesmans e-mail address send him an e-mail and tell him what car you are interested in and that you want him to send you their internet price. If he says you need to come down to their store, tell him no you don't and if he won't send you the price then tell him "we are done here".

    On my purchace I knew my out the door price, I knew my interest rate. I knew what my monthly payments were. We had pre approval from Ford so we didn't have to fill out a credit app. iWe showed up at the dealer and were out in an hour.
  • I don't understand what your website means by "complicated pricing system".
    The new car has a window sticker, minus rebates you qualify for.
    The trade-in has a value.
    The difference figure has a break-down of out the door, or payment.
    Four square. Period. Not hard for customer to understand. A small amount of negotiation may be required for all parties to be happy.

    Thank you very much.
    Do you-all make money from car sales or not?

    I think so.
    Post this.
    You are welcome
  • philip17philip17 Southern CaliforniaPosts: 25
    I'd like to clear up a few things I saw in the reader's comments to this article I wrote for Edmunds.com.

    First of all, one reader wondered what "so-called dealer dic fees" are. This was an unfortunate typo -- it is "doc fees," which stands for documentation fees. This is the amount the dealer charges to draw up the contract. Some states will cap this fee, usually at $100. Other states leave the fee unregulated and sometimes it can be up to $600.

    Also, one of the readers said that the dealer leads system didn't work well for him. It's true that some dealers don't respond with an actual price. Instead, they say to "come on down and we'll take care of you." You need to either email or call them back and say, "I've already test driven the car so I'm just looking for a price quote." In most cases, though, if you contact 5-7 dealers, you will get 3-4 firm quotes.

    Finally, many readers used this space to discuss how horrible the car buying process is. If you find a good dealership, and do some research, and know how to navigate the system, the process can be enjoyable. It is changing, but slowly. And some dealerships are still using sales practices from the dark ages. Look for the good dealerships and give them your business.

    Philip Reed, Senior Consumer Advice Editor, Edmunds.com

    Philip Reed, Edmunds.com Senior Consumer Advice Editor

  • Look it is easy to post all the neagitve stuff on buying a car. But lots of times we as consumers do it to ourselves. It is a simple process. Pick the car, and negotiate the best deal you can. If you do your research on how much mark up is in a new car today you know that ity is only around 3-5%!! That's it. No one is taking anyone to the cleaners, it is about getting as much product out as a dealer can, and keeping a relationship with the us the customers.
    When it comes to trade values KBB is the worst and most unreliable site on the web. KBB never takes into account what it cost to run it through service, advertise it, certify it, and detail it.
    If you can sell it yourself for more than you should. But be ready for people that can't really come up with the money, and ball busting offers.
    Bottom line I use the K.I.S.S. rule: Keep it simple stupid. Find a Sales Rep who is informative and you feel you can trust, and a dealer who is going to take care of you for the long haul. All of that is part of a good deal. Again, with the small margin that dealers really have to work with everyone is set up to get the vehicle that they are going to enjoy for many years at a very fair price.
  • Inside of the finance office holds the greatest salesman of them all. This person will try to sell you various types of warranties and service contracts for a price taken off the top of his or her head. I wish that these contracts had set prices in order to make it more comfortable for the consumers. It will make the dealership look more trustworthy.
  • This site provides knowledge for car buyers, for me I discovered this site 4 years after the fact, and realized I wasn't taken to the cleaners I walked in all by myself. I paid over $16,000 for a new car valued today at only $7900. That's two cars for the price of one!
    That is a tough pill to swallow. This site provides quite a bit of knowledge, I wish I would have discovered this site 4 years ago. We are vulnerable without the Knowledge that the Edmunds site provides.
  • mah_nitinmah_nitin Posts: 3
    Very helpful article
  • neongaryneongary Posts: 1
    Got news for ya Edmunds. Your online service doesn't work with my local dealer. Tried the "quote" thing and dealer refused to give any info via e-mail. After "building" the car they still asked what options I was interested in, etc. Totally useless.
  • I read the comment above about financing departments and felt compelled to share my recent car buying experience.
    I am driving the exact car I wanted and have the exact financing that I wanted for the small portion of my car that is financed, but I had to work to get the financing I wanted. It was worth the work.
    The dealership I bought from has a fantastic service department, is close to where I live, and I worked with a sales professional who earns by units sold. The deal we put together was perfect.
    Now to the point of my comment...
    I told the finance department how important it is to me to keep my money local and wanted my small loan to be with our local Credit Union. I was told 3 percentage rates from lenders, all huge corporate and not the Credit Union.
    I went into the finance managers office to speak to him about this. After 10 minutes of him telling me how the Credit Union was offering a very high interest rate and the 3 lenders offer lower finance rates.
    I went down the street to the Credit Union and was not at all surprised to hear this is very common at this dealership and 2 other dealerships close by as well. These are all high volume dealerships.
    I refinanced with the Credit Union when I received my loan docs.
    I am now an educated car buying consumer, after learning some lessons that I am hoping someone finds beneficial.
    Pre approval from the CU does not seem to matter. Customers have come in to these dealerships pre approved by the CU and walked out with loans like mine!
  • For all of those belly aching about the price and not knowing ... There is a price the MSRP. Manufactures Suggested Retail Price.. BUT people don't want to pay that want a *deal* ... It's your fault for thinking that the suggested price is too much. What if the government mandated that that was the price that had to be paid since it's one created by the manufacturer?

    Stop whining and be happy that you get the chance TO get a better deal. Also the crap about extended warranties not being worth it is BS. I've always recouped my money and then some from them. Cars will do something stupid before the extended period is over. I went through 3 computers and 2 cam sensors under warranty as well as some cv boots.

    Grow some or pay the sticker and shut up.
  • And you've snuck your first Insideline redirect to take me to this shabby 2001 UI that is Edmunds.com.

    Marketing/Focus group/Rebranding Hack job at it's worst.

    Way to dilute a brand.
  • toyzmtoyzm Posts: 1
    Few more tips:
    1. Be aware of incentive or rebate expiration date. A dealer may not have the specific model you want, and you may have to order one and wait.
    2. Try calling private small dealers as well. They may able to get you a car from official dealer at better price.
    3. Service package price is far more negotiable than car price.
  • All I can say is "Buy at the end of the month"!

    Dealers always want to close the month strong, and you WILL get a much better deal on the 30th than you will get on the 3rd.
  • brnbrn Posts: 0
    That's too many steps.

    1. Price the vehicle out on your favorite web site (Edmunds.com will work).
    2. Acquire your own financing.
    3. Price your old vehicle very reasonably and sell it yourself.
  • I'm a car salesman. I always find it funny when a customer says they don't want to play "the game". There is no game. Most customers don't belive the manufacturers invoice price. Customers want to list off what they found on a third party sight. Really? Go to 5 third parties sites and fine me the same invoice. If you really want a good deal. Don't come in as a jerk. We are people if we like you we help you. If we don't like you. Then why do you any favors. Do your research. I advise all my customers to. I want to make an educated offer. Not a baseless one. Also understand that I am under no obligation to not make profit off you. PROFIT is not a dirty word. It's what keeps people in business.
  • 1. DO NOT give your mobile phone number! I did this and they keep calling at odd hours even after you tell them you are not interested.

    2. Don't use your main email to ask for quotes. I have been unable to get off the dealer's spam email lists even after 3 years of asking to be taken off.
  • The statement that the lowest internet offer is within a few hundred dollars of the best sales prices is absolutely FALSE!

    My last car was purchased about $1500 less than the lowest of 4 bids. The one before that (although at the beginning of the great recession) was about $3000 off of the lowest of 5 internet bids)

    I e-mailed the dealers for a bidding war. I do this sequentially - somewhat random order but starting with bringing the highest to the lowest first. They gradually some opted out until I had my best deal. Interestingly some would opt out and rejoin in a couple days at a lower price.

    Never share with the dealer where the other bids are from otherwise they will collude to stop your progress. I also used dealers in several city centers. This process takes a couple weeks rather than days, but highly effective.
  • TMV is an average. Therefore at least half of buyers pay less. TMV, adjusted for incentives, etc, should be the maximum a person should pay. And, always, people should just say no to everything the dealer's top sales person in the F&I office tries to sell.
  • My husband and I have bought several cars in the past and everyone of those times we paid way to much for them. Of course we had no idea on how to go about buying any kind of car. Anyway, the first time we bought from a dealership, we purchased a Nissan frontier truck and it wasn't what we went in there to buy. It was our first car buying experience at a big car lot. Anyway, every car we have ever bought was a desaster but it was a very much a learning process. I don't like that we were taken advantage of but I am trying now to research the buying process and the price we should pay for the vehicle we want.
  • A really good dealer nets 4% on revenue and Edmunds, that has made its fortune from the industry, continues to paint us as heartless villains out to rip off the public with fast moves and double-talk.
    No, we try to maximize our profit on each sale by building value so that the customer is pleased with the agreed upon price. The customer is happy, the dealer makes money. An unfair tactic in the eyes of Edmunds and Obama but nothing could be more honest or legitimate.
  • I have bought several new cars in the past and almost everyone I was ripped off. I had no idea what to ask or what NOT to ask when buying a car. :( The first truck my husband and I bought was a Nissan Frontier two wheel drive, black in color, extended cab. There wasn't anything special about it. When we went to the dealership looking for a vehicle we saw a purple Nissan 4X4 extended cab on their lot. We had no idea how to buy a vehicle. We just went with whatever they told us. I know now that is a bad idea. When we were leaving the dealership they told us that we can take the truck home while they get everything prepared. I don't remember what exactly happened but they told us the following Monday that we would have to bring the truck back in because the bank would not let us borrow (I think it was $2000 more than what the bank wanted to let us have). Anyway, so we took the truck back to them and they wanted to sell us a two wheel drive black nissan frontier. Their story was that both trucks were the same. The only difference that the purple nissan was 4X4. What I should have done was not purchase the black nissan from them. I should have left without buying anything. Here's the best part they said that our other vehicle was already at auction. Well, right there is a scam. Any vehicle you are trading in can't go anywhere until you have all the documents in order for your next purchase. I have learned a lot when it comes to buying vehicles. Everyone I have bought there is a story behind it that I have learned from. I don't mind buying vehicles as long as I am not getting ripped off. The last vehicle I purchased is a 2009 Chevy Aveo. I bought it for $11500. Which I shouldn't have given that much for it. I should have done more research. I love the car and I love to drive it. It gets great gas mileage. Anyway, I am wanting a 2013 Jeep Wranger Sport or Jeep Wranger Unlimited Sport. :)
  • I am a car salesman and everyone needs to realize that buying a vehicle at a dealership has come down to the F&I office as the way a dealership makes money. Getting a good deal is what both parties want. A dealership wants a loyal customer and the customer wants a good cash price.

    Just think, the web is full of what price your "vehicle is worth" and what to pay for our vehicle. What the car sites do not tell you is that we would give you the trade-in value if you paid off our MSRP. The rebates and incentives on new vehicles are your discount. If I give you the money the dealership uses to pay the sales person and upkeep on the building plus buy more inventory how do we stay in business? If we sell a vehicle for invoice which we are happy to do at a $1800 discount how can I give you more than what your trade is worth?

    I can't give you my advertising budget or holdback. It is what keeps my dealership operating.

    Plus, you will go down the street and tell the next dealership "they" gave me this much and you play games more than we do.
  • A couple of steps to take prior to purchasing your new car.

    1) Research the reliability data (This site has excellent consumer feedback, as well as Consumer Reports), nothing kills that "new car high" like having a clunker that breaks down and leaves you stranded
    2) Do your price homework. The "price paid / buying experience" section here in Edmunds is a great resource for seeing what other people have paid. Also, voiceofthedriver.com shows people's reported prices as well, but in a more user friendly format.
  • Let me add one bit of advice. Never, NEVER negotiate in terms of the monthly payment. Only discuss the out-the-door overall cost. A salesmen will always push you to name your monthly payment. Once he has this information he can then turn around and manipulate the finance terms (e.g. interest rate, loan length) so that your monthly payment is tolerable, but you're still paying too much. For instance, suppose a car is listed at $23,000, but you want to pay $20,000. You aim to have a monthly payment around $360 per month. If you paid 3% APR for 60 months on $20,000, you would pay $360 per month. The salesmen will always push discussion away from the overall price and say, "if I can get you this car for $360/ month, can I have your business?". You might agree, thinking he is agreeing to lower his selling price. Instead, he's likely to tell the finance person to extend the loan period to 72 months..and possibly even raise the APR. $23,000 at 4% APR for 72 months translates into a $360/ month payment. So you still get your $360/ month, but you've agreed to an extra year's worth of payments and to pay a higher interest rate. The extra year's worth of payments is $4,300. The higher interest rate, combined with the longer payback period is an extra $1400 in total finance cost. Had you kept the focus on the overall price, and the dealer had met you halfway by agreeing to a price of $21,500, your monthly payment would have gone up to $386 / month (assuming 3% over five years). However, you would have saved more than $2,700 on the overall cost of the car. Bottom line, keep the focus on the overall price, ignore his attempts to lock you in to a monthly payment, and be prepared to negotiate both over the price and the finance terms.
  • jonnybb1jonnybb1 Posts: 1
    The video on the is page is more of an advertisement for edmunds.com
    The information is correct, but says nothing about the lies and promises dealers will make just to get you in the door.

    Dealers won't quote their best price in writing for fear you'll just take it to another dealer to save $100 on the deal.

    The best thing to do is to ask for a quote, when they call you to make an appointment, ask for the written quote again, then ask for the sales manager. The manager is the one who walks a thin line of integrity and BS, but at least if you maintain your own self esteem, you can hold that manager to everything they tell you.

    One last point, there's no mention on how the cars-sales process is still controlled by the good-ole-boys. Learn how to work with them and you'll be happier in the end.
  • Manufacturers want to sell cars directly; they are prevented by dealers who control stare legislators through franchise laws that "protect" franchisees from manufacturers (like protecting sharks from whales, and shares feed on guppies like customers).

    Dealers are independent businesses, and manufacturers can direct them only through franchise agreements. Dealers set prices.
  • marvinlee1marvinlee1 OregonPosts: 51
    I just completed the negotiations and paperwork for buying a new car. It was a degrading, abusive, experience, complete with manipulative tactics. Edmunds would do well to advise all car buyers to beware of the pink sheet contracts that come at the very end of the process when a buyer is committing to buy. The sheets are almost unreadable, are weighed heavily against the buyer and are specifically tailored to give the dealership an advantage in any serious dispute. Oh, yes, the abuse. That came after I had explicitly cautioned the sales manager that I did not want my home phone abused. It was, anyway, and I regret ever having given it to the dealer. Our next car purchase, a year or two from now, will be done by email.
  • I have read this, and many other articles like it, describing how exactly to buy a car. As a professional sales consultant, having worked at three major dealerships and different brands, I can add some insight to this. In every sense of the word, no (reputable) dealership is trying to ripoff any consumer. Our fate lies in that of the almighty survey. As a consumer, I also understand the "game" of buying a car. In fact, my wife and I purchased two new cars yesterday. In any case, it comes down to this: be informed. Don't show up to the dealership demanding to get a car "out-the-door" for a price well below the invoice. Yes, we will lose money to sell a customer a car, but there are limits. With the aid of modern technology and internet access everywhere, consumers have all the information at their fingertips. The days of huge mark-ups are long gone. Expect a vehicle's sticker price to be between $700-$1600 over the invoice price (dependant on manufacturer). Many dealerships now have add-ons such as window tint, splash guards, pinstriping, nitrogen filled tires, etc. These do add value to the vehicle and protect your investment, but the price of them can be negotiated as well. Don't be the customer that says "I'm not paying for that" or "that should be included". If you want the car stripped of any add ons, the dealership can get a car without the adds if you truly don't want them.

    In a business where you can find the same (or very similar) vehicle on many different lots, you have choices where to buy your vehicle. In essence, choosing to do business at a particular dealership relies solely on customer service. Most consumers would gladly pay slightly more for their new vehicle if the service was above reproach. Remember this when shopping for a vehicle and someone advertises a price that's too good to be true. What's the catch or where is the customer service lacking? Also, when preparing to make a vehicle purchase, don't forget about taxes (if applicable) and all the associated fees (tax, title, licensing, doc, etc.). Assuming that these are made up numbers and that the dealership can absorb them or just make them go away is an easy way to lull yourself into a false sense of reality.

    Bottom line, research and be honest with yourself. Don't expect to buy a new loaded Mercedes for a base Ford price. Remember, as sales people, we want to sell you the car more than you want to buy it. We will pull out all the stops to make sure that the deal happens. If a deal isn't reached, then maybe it isn't possible at those terms. While I'm fully aware that this isn't the case 100% of the time, it holds true for most of them.

    Thanks, and happy shopping.
  • Edmunds is a great place for research but I hardly ever find that dealers will honor their price point.

    The key is to do your homework before your go to negotiate. Some people seem to think they have the negotiation skills to just go into a dealership and get around their sales tactics...Sorry they have been selling cars more often than you have bought any vehicles. I have AAA, and received a price quote prior from an authorized dealer prior to stepping foot on the lot. I did manage to squeeze a couple extra grand more out of the price, and had them include GAP insurance. In addition, I used Truecar.com to find an authorized dealer, and save 5 and 6K on a couple deals I assisted my friends with.
  • It is appalling what people qualify as "ripped off". Even if you are paying sticker, you are not getting ripped off. Most cars are marked up a thousand or two from cost. How bad do you needle to nickel and dime these people that are just trying to make a living. First off, by the time you get within $800 of invoice typically, that salesman is making around a hundred bucks. Yeah you buy a car for 20-40 thousand dollars and he makes a hundred bucks!! Seems fair! By all means spend your time going from dealership to dealership trying to save $50, not a month, on the entire price of the vehicle, that will show that poor [non-permissible content removed] that tried to "put the screws to you" for that extra $50 on a $30000 car! By the way, have any of the good people at edmunds owned a car dealership? They are pretty expensive operations, you have to employ many behind the scenes people such as clerical, administrative, accounting, detailing, porters, service, parts, etc.. God for bid the owners of dealerships make any profit. They should just fully operate as a charity and give every person a car for what they pay for it. It makes me sick. It is the only business in the world where people resent you for trying to make a profit. I think all of the whiny people that read this article should live in the Middle East where you can negotiate everything that way we can eliminate the backbone of America that once made this country great! How come people except real estate agents commissions or the markup at every other retailer in America as acceptable business, but a car dealer tries to sell a vehicle at MSRP, or Manufacturers Suggested Retail Price and they are the devil! Do your homework, try to get a good deal based off of invoice that is listed all over the internet and be freaking happy! If you call around ten dealers and shop twenty more online just to save a few more pennies, you are an &$@&;$$)(&@!
  • I was super happy after buying my car I researched here. This article gave me some good tips too
  • here's my gripe on car prices: I have no problem with the dealer making money, I prefer they make enough to stay in business. Just be up front and don't play games.

    The last two cars that we bought we got from the same dealer with the same salesperson. We test drove both and said "thank you very much" went home to think it over. Then I emailed the next morning after deciding we really liked the car and the trim level to find out their price on it. Then both times they emailed me a price that I thought was very fair and we went in for one more test drive and paid the price they said and then drove the car home.

    So over the weekend I catch an ad for a car company that is running 20% off their cars that have been on the lots the longest. It gets my attention as we've considered a couple of their "almost luxury" models in the past. I go online and find that there are several examples of their bottom model at the discount but none online of the next model up, the one I really want. So I email one dealer that has several (and according to one site online one of them has been on their lot for 230 days). I basically tell them that I see some of the bottom model at the special price and was wondering if by any chance any of the model I want fall under that special.
    So far so good. But then they email back with all 3 of that model that they have listed out with MSRP and "Your Price" listed for each. And for each one "my price" is exactly the same as MSRP. Oh, well, no hard feelings if it isn't part of the manufactures sale then it isn't part of it. I didn't get around to replying to that email so they send a follow-up one the next day. I reply to that one with a simple "I was hoping one would be part of the 20% off and at $6,000+ off it would be a hard deal to pass up. But since it isn't I'll hold on to my current car for several more years as I had been planning to do"
    Then I get an email with "Great news! My manager says we can do a discount of $5,000 to $6,000 off that car!". So it went from zero off to $6,000 off? That is a big difference. I didn't play games, I was upfront in what I was looking for an what discount I wondered if applied. But they had to start out with the "lets see if we can get full MSRP" when we've got huge factory discounts on the car game. Where else in the deal are they going to try that? You want to make $500 or $1000 on the car you sell me? That is business. You try to make $7,000 to $8,000 on a $30,000 car that is what gives car dealers a bad reputation.
    I think this car may be jinxed for me as I almost bought one 4 years ago before we bought one of our other cars. But the salesman slid over the paper with the magic number on it and it had $4,000 in added "market adjustment" on it. When I got up to leave the sales manager yelled out of his office "is it the price that is an issue?". I just smiled and left but I wish I had said "no, the issue is that you think I'm stupid enough to pay that price"
  • meteor10meteor10 Posts: 59
    edmunds is cool. my friends recommended me the portal and i got lots of info from here which changed my approach to buying new cars and changed me choices afterwards
  • m_zm_z New EnglandPosts: 10
    Always price shop to get an idea about the dealer's invoice price. Many dealers actually pay LESS than the invoice price since they buy in volume and get "bonuses" from the auto makers such as sales goal bonuses. Don't forget about any rebates since dealers tend to 'forget' about them!
    Unfortunately, STATE laws were created in the early 20th century prohibiting competition so dealerships have NO incentive to help consumers but themselves as dealerships have Lobby groups to help them!
    Buyer beware! Good luck! :)
  • ddr99ddr99 Posts: 1
    You get out what you put into things. You want to research or not. You want the best price or not. Use the Price Promise numbers and pick the best three and see if they are real or BS quotes. Whomever gives the best and has the best service reviews gets my vote. simple as that.
  • whippet50whippet50 Posts: 1
    Perhaps the worst advice yet I've ever had the chance to read. Plus, the information is very old, as this article was originally published in 2002.

    Not sure about the author's intent but there wasn't much that was written here that was based in reality or even truthful. Just overall bad advice, designed to arm the consumer with information that will put them at odds with the salesperson when it comes down to negotiating price. The consumer goes into the dealership thinking that just because they got their information from Edmunds.com, that it must be correct. Then the salesperson looks like the bad guy for giving the consumer information that is based in reality.

    Take it from me. I was a factory certified vehicle salesperson and I learned a lot about the industry. As I stated earlier, there is lots of bad information here but I will limit my remarks to Step One.

    First off...

    Let's get something perfectly straight: Before you even think about setting one toe into a dealership, you have to do your homework.

    Step One really should be: Check your credit score. This is paramount!

    Knowing that will help you know where you stand when it comes down to interest rates, dealer incentives, and other sales promotions. The price you eventually pay for your new car is all based on "OAC" (on approval of credit). Plus, there is no penalty if you check your own credit. Knowing that will enable the dealership to give you an estimate without your credit score taking a hit. But keep in mind that if you do decide to finance the vehicle, the dealership will have to run your credit, and that might cost a few dollars. If you're paying cash, then of course there is no need to run your credit.

    You may check what your bank or credit union has to offer financing wise but that is somewhat unnecessary, as the dealership has access to hundreds of banks all across the nation. This allows the dealership to offer interest rates that are the same or even better than your bank or credit union. Can you get 0% financing from your bank or credit union? Probably not.

    What you eventually pay for a vehicle is mostly based on approval of credit.

    Most of a consumer's horrible experiences are based on believing all of the bad information that is culled from the internet, friends, family, and co-workers. Reading one or two articles on car buying doesn't make you an expert in the automotive industry. That would be like a vehicle salesperson going to your job and claiming to know everything that you know after reading an article or two about what you do for a living.
  • Car dealers will sell you whatever you want, but it is up to you to decide on what that is. When we shop for a car, we to the dealerships to become informed as to what choices are available. We go to the manufacturer and car buying websites and study the options and decide if they are worth the cost. Invariably, it will always turn out that the exact car you want is never on any car lot. You will have to order the car. It takes a month to make the car, but it also gives you the opportunity to buy the exact car you want at the lowest price you can find. And, you don't have to buy options that you don't want. But, it will turn out that the more you study, the more options you will decide to buy. But, the important thing is that after you decide exactly on what you want, you can price that car. When you pick a car from a lot, it will have different options and you will not know what is the lowest possible price. You negotiate from a weak position, which will cost you money. So, the next thing you have to do is establish your trade in value and figure out the actual cost for the tax, title and license. Now, back when you were talking to dealers, you ask questions about car pricing, trade ins, dealer preparation charges, etc. and from their different responses figured out who the dealers are that you can work with. The most important thing about that is whether or not you can deal directly with the sales manager and work around the car salesman and his commission. Now, price the car at dealer invoice, less your established trade in value, and no additional markups for preparation and documentation fee and any manufacturing discounts are yours. All the dealer makes is the holdback from the manufacturer. Add the tax, title and license costs and establish the drive out price. If you have to borrow money, make your deal first with the bank so that you walk in to the dealership as a cash buyer. So you have your itemized list of options and the price that you have figured out, and have thought about it a couple of days, checking and being sure that this is the exact car you want and the exact price you will pay. Put your checkbook in your shirt pocket so that they can see it and they know that you are serious. Now, you have to run a check on your methods so pick one of the dealers you would deal with and run a test case. Subtract 500 dollars from your price, go to the dealer sales manager and make him an offer. Be a serious buyer because it will only turn out positive for you. Either you will get a deal that was better than you expected or you will know your offer is too low. If the dealer refuses the deal, be prepared to leave. Get up and go. You might want to try it again with a second dealer, raising the price a couple hundred dollars. Eventually, you will go to the dealer you want to deal with and the price you will pay for the car. They will make the deal. Just stick with the price you have calculated and be prepared to walk away. Also, remember that the dealership will sell you a car regardless of a car salesman. So talk to the sales manager.
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