____________________________________________________________________________ How to Buy A New Car Edition: 2002-07-06 Audience: North America Based on how I did it in 1989, and how I'm about to do it in 2002, I recommend the following steps: 0. Buying a new car typically involves three separate activities: a. arranging the financing b. buying the new car c. disposing of the old car Treat these as 3 separate and distinct activities. Step "b" is challenging enough without needlessly complicating it by giving the dealer leverage over you with financing and trades. They can and will use every advantage available, so keep the list short. 1. Read "Don't Get Taken Every Time" by Remar Sutton - very entertaining, and prepares you psychologically for confronting the seamy subculture of retail auto sales. The typical auto sale is structured to have four participants: (maker, dealer, salesrep, buyer) and two victims: (SR and buyer). You can't do much for the SR (who may try to enlist your sympathy anyway), but you can protect yourself. The SR may be compensated based on a percentage of the difference between "factory invoice" and final selling price. You want that to be close to, if not below, zero. The dealership still makes money at zero. 2. Research the precise vehicle configuration you want, down to the maker's option codes, and prepare to special order (before end of production year, I might add). If you dicker for a car on the lot, you'll either have to pre-inspect their stock after closing or on Sunday (if dealers are closed, as they are in Colorado), or be prepared to do some fast calculations on your feet, particularly on superfluous options. Nowadays, you may be able to find a maker WWW site with config software, or be able to get a free CD-ROM with that detail. Can't special-order? Buying off the lot has benefits (they may be desperate to sell it) but also hazards (high carrying charges have accrued, and the "undercoating" and other dealer-supplied baloney has almost always already been done). In my case, nobody had anything close to my desired configuration anyway. 3. Get two independent quotes of "dealer cost" breakdowns. Be sure to get the underlying models as well. In my case, I wanted an "SE" config, and got the "SE" and "LE" data, but really needed the base model data as well to figure out the costs on some accessories and packages. Consumer Reports and Nationwide Auto Brokers generate such quotes. Or get one quote and the Edmunds guide from a full-line newsstand. You might also try URLs: http://www.autobytel.com/ http://www.edmunds.com http://www.kbb.com Generally ignore any "invoice" prices waved in your face at the dealership, as they may merely be some random document fabricated to impress barefooted pilgrims. However, you do want to work UP from invoice and not DOWN from sticker. But research the invoice price independently. Ignore sticker prices altogether. They are meaningless and often ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ are locally inflated. If you want to "save $5000 off sticker", the dealer will be more than happy to raise the sticker price high enough to accomodate you. Having said that, note that some auto brands won't inflate or discount sticker. Saturn you probably know about, but VW diesels seem to also fall in this category. Be sure to hit some auto forums and ask about market realities for your intended brand and model. 4. Sit at home and run the numbers. Don't forget to pre-decide what you want to do about "dealer advertising", "dealer prep", "destination", "local market adjustment", and other creative charges. Configure OUT "undercoating". Talk/net with people about how flexible pricing is on the car you seek. What I bought was a Plymouth mini-van, and dealers would not negotiate on them at all between 1984 and 1988, because demand outran supply. If you want a highly-sought-after model in short supply, expect to pay the dealer full list, if not thousands extra, to get it. Don't forget that consumer debt is no longer tax-deductable. Sell some stock and pay cash if possible, unless the manufacturer is offering a below-prime rate, and no surprise fees or balloon payments. *** Do not under any circumstances use dealer financing *** even if they claim to "just fill out the paperwork for your own credit union". 5. Pre-arrange financing if you need it (I did at my Credit Union). If you have a used car, forget about trading it - it just complicates matters needlessly and gives the dealer way too much leverage on you, right up to delivery time (when they claim that the old car is now worth less than when the deal was struck weeks prior). I sold my old one separately after the new car was delivered. 6. Unless you know you can't accept any local stores, shop for a dealer, and not for a car. I picked my dealer based on service department reputation. Ask on the net. Start now. Buy on the web? I would consider it only if the transaction is actually concluded at my target dealership. In my present case, no one on the web is offering the brand/model I want. 7. Placing the order at the dealership - bring someone with you. The dealer will be less likely to make wild verbal promises they don't intend to keep if there are two witnesses for your side. 8. Find a quiet time on a quiet day. Wednesday early in the month will often find the store empty but for you. If you go in at a busy time with the sort of deal I describe here, they will actively stall or ignore you in favor of potentially more profitable prospects. Nonetheless, be prepared to wait them out. Bring some reading material. In my case, they had no other customers, but still turned what could have been a 15 minute quick sale into a 3 hour waiting game - with the same result. (I didn't do this, but would have this time, if I weren't seeking a non-negotiable machine) - Ask to speak to the sales manager. Explain that you have want to order a car now, cash sale with no trade, that you have a detailed configuration and price in mind, and would he/she please assign someone competent to take it. This will at least reduce the chances of your being stuck with a neophyte who can't correctly write up a hub cap. The last time I went store-to-store in Fort Collins, CO, 60% of the SRs had been on the job less than two weeks. Some sources also suggest approaching the fleet sales rep. 9. Lay it out for them - In my case, I was rather open. I told them that I had been looking at Chrysler mini-vans for 5 years, and had walked away every year. I didn't "need" a new car, but now that the mini was available in a reasonable config (4 cyl 5-spd manual turbo, since discontinued), and dealers were dealing, I might buy. I had selected this dealer as the place where I would buy - or walk again, and told them so. You may not want to be this up-front, but it does make them realize you are a prepared and serious customer. 10. Before making the bid, itemize the extra charges. Adjust your bid if any surprises arise. You did bring a calculator and your price lists, right? Bid a price that is a couple of $100 below what you really had in mind, and let them bump you up. This way, they get to feel good, and you get your car at your price. Be prepared to walk. If it takes approval from two management layers up (from the salesperson), with well-acted weeping and gnashing of teeth at each layer, you are probably getting a reasonable price. 10.b. If you can't reach agreement, walk. If you walk, leave your name and phone number with the SR. They may very well call you back in a few days, or near the end of the month if they aren't making their volume targets. 11. Put down the minimum deposit (pay via credit card if allowed), and get a receipt. 12. Get a computer printout confirmation of your order ASAP (may take a day or so), and verify it against your config and order. (Minor bundle changes in my case.) 13. If the car that arrives doesn't match, don't accept it. If it is not the same as what's on the confirmation, then it isn't the car you ordered, regardless of what the dealer claims. (This didn't happen in my case.) Still a satisfied owner of an economical, mostly trouble-free and extremely functional 1989 Voyager. Now if they'd just make an electric version with regenerative braking and solar assist (or at least sell the turbo diesel models in the US)... ___________________ "Don't Get Taken Every Time" 5th Rev edition Paperback, 412 pages List: $14.95 Published by Penguin USA (Paper), Latest edition: May 2001 ISBN: 0141001496 > I was amazed at how transparent their whole strategy was - AFTER I had > the benefit of an education by Sutton. That guy ought to be given a > Consumer Medal of some sort. For anyone thinking: "How come I've never heard of this Sutton guy before?" You may not have noticed that you almost never see any objective, much less negative reporting on the retail auto trade in your local newspaper (except in really egregious cases like the early 1990s Sears repair scam, or when customers are actually being killed in significant numbers). Many publications receive a substantial percentage of their ad revenue from auto dealers and auto makers. These clients will not hesitate to pull their ads when articles appear that expose their tactics. Remar Sutton even has trouble running ads for his book and getting on radio talk shows. The dealers hate him and apply all the pressure they can to keep his message from getting out. Every sale of "Don't Get Taken Every Time" probably results in at least $1000 of lost easy profit on each subsequent auto sale to the person who bought the book, not to mention all the people they lend it to. The book is a major and quantifiable threat to contemporary retail auto sales practices. > Are these Buyer Broker services a good deal or can you get a better > deal all by yourself negotiating with a dealship? I would love to > hear from anyone who has first hand experiences. From what people who have used Credit Union services have told me, my estimate is that you can get the same deal yourself if you do your homework (see my list of tips above). However, if you need a car loan, a credit union loan is usually the most attractive value, but be sure to arrange it with the CU and not through the dealer. Another consideration about using brokers or buying services is warranty hassle coefficient. On my last two new cars, I "bought the dealer" and not the car. I wanted to buy and get service at the same dealer. When my car is on the lift, I want that dealer's logo plate on it. I have found this to make a difference. If you buy elsewhere, or get a car with no logo plate, the service dept is likely to give you a hard time about warranty work, appointments, timely completion of work and quality. They aren't "supposed to" of course, but it happens. Those perceived to be "loyal customers" often get preferential treatment, particularly in those cases of "...oh by the way, while we were working on XYZ, we discovered that ABC was frunkled. We fixed it at no charge." Regards, PO Box 248 Bob Niland Enterprise mailto:name@isp-name.domain Kansas which, due to spam, is: 67441-0248 USA rjn AT access DASH one DOT com Unless otherwise specifically stated expressing personal opinions and NOT speaking for any employer, client or Internet Service Provider.