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15 Tips on Getting the Best Deal On Your New Car
I recently bought a new car and was astonished at how much about the buying process had changed since I purchased my last car, about 10 years ago.
2012 Honda Crosstour, courtesy of Honda
I certainly don’t claim to be an auto-buying expert, and am not even sure this falls squarely under the “business insights” designation for this blogsite, but nonetheless, I thought I’d share my top 15 car buying tips.
In this article, I’ll discuss:
- Best time of year to shop
- Whether to buy or lease
- Where to find market intelligence on the cars themselves
- As well as the going price, negotiating strategies and other helpful pointers.
BEST TIME OF YEAR TO SHOP
Tip #1 − It’s always best to shop when there are on-going sales.
Pretty much goes without saying. Of course, you’ll find that auto dealers use any excuse for a sale, but often the best ones run around holidays; President’s Day, Memorial Day, Fourth of July, you name it… they’ll announce a “blowout sale.” I always think it’s pretty funny that come January they advertise “the best pricing of the year” − as of course, the year just started!
Tip #2 − Even better than the holidays are period endings.
End of quarter and especially end of year − as dealerships are trying to make their sales quotas with the auto manufacturer(s), and if they need just a few more sales to meet their quota, they’ll do virtually anything to close the deal with you, as it entitles them to added bonuses.
Tip #3 − Look for the last of the current-year models.
By that I mean that just before the new model year cars are about to be introduced, the remaining inventory of the current year models are sold off, often at discount. Be aware that different models come out at different times throughout the year, even within a single manufacturer’s car line, (i.e. the new Toyota Camry® models don’t come out at the same time as the new Toyota Land Cruiser®, for example. You have to know when to look.)
It’s also important to be cognizant of a few other things. First, be aware that the old model year cars may, or may not, have been sitting on the lot for a while, and could be a bit dinged up. (That’s not always the case, but is a consideration.) Second, wait too long, and all the “older” cars may have been sold off before you make your offer. And even though it may be brand new to you, the car is, in reality, considered a year old. Therefore it has less re-sale value when you go to trade it back in. But, all in all, buying at the end of the model year has been a good strategy for me.
MARKETING INTELLIGENCE – NEWSPAPERS AND ONLINE RESOURCES
Tip #4 − Newspaper ads
If you still use (print) newspapers to view auto sales ads, at least in NJ, where auto dealerships are closed on Sundays, the newspaper ads no longer appear in the Sunday paper, as they once had. Dealerships have now cleverly moved the car ads to Saturdays, when you can actually get to their office, see what’s on their lot, and make a deal with a live person.
However – there’s much more info to be had by going online:
Tip #5 − Comparison ratings
There are many independent publications that test drive new models and offer editorial commentary about performance, handling, zip and fuel economy, among many other rating criteria. Consumer Reports, as well as Road and Track are two such publications that come to mind. While they generally never say anything really bad about the cars, their information is helpful, especially when you’re still on the fence about which 2-3 car models may be best suited for your needs.
Tip #6 − Manufacturer’s websites (i.e. Toyota, Honda, Ford, etc.)
Here you can learn all about the variety of models the manufacturer offers, as well see close-up pictures, check out features and options, get explanations of why certain features are advantageous, see available colors, find area dealerships, pricing and more.
Tip #7 − Dealership websites
Virtually all dealerships have their own websites, with their hours, address, and directions, as well as info about exact models they have in inventory, and often pricing info. (Note the price will virtually always be manufacturer’s suggested retail price – MSRP, which translates to the sticker price plastered to the window of the car… the price that no one should ever pay without negotiating a further discount.)
It’s also worth noting that often dealerships can get models with the specific option package or color you want, even if it’s not on their lot at the time you’re looking to buy. It’s not always the case, but in my experience, the best deals are generally had when you take the model from their existing inventory, without making them special order or move the car from another location.
Interestingly, I also learned that different dealerships carry different models – by that I mean that certain options or colors may be more popular within that regional buying audience, and therefore may be more prevalent in the inventory a particular dealership keeps on hand. For example, the Toyota dealerships closest to me carried the “boring” colors – black, white, silver, grey, while the dealer closer to the shore, for some reason, had a much higher inventory of the same model cars in the powder blue, green and maroon. So if you don’t see what you want from your local branch area, expand your search.
Tip #8 − Live Chat
Even better than static dealer webpages, many of the progressive dealerships now have a free, online, “live chat” service that’s accessible 7 days a week, Sunday included, so you can ask away and get live answers from a real person. If you’ve never used such a service, it’s simple… no special software or talent is needed. You just click on the “live chat” button, type a question, and await your service agent’s response. (Note – this is fast, but not instantaneous…I think because the agents are probably simultaneously online with multiple customers… so if you see nothing happening, don’t despair; an answer always arrives eventually, and is definitely worth the 2 or 3 minute wait.
PRICING − LOOK BEYOND THE OBVIOUS
Tip #9 − Don’’t just limit your pricing research to dealerships near you
While I found that all the Toyota dealers in NJ offered the same manufacturer’s list price, I was able to go to the manufacturer’s website, enter a zip code for any area I wanted, so I chose Northern Virginia/Metropolitan DC, just to see how their prices compared. Not that I planned to buy out of state… I just wanted to see if there was much difference. That test brought me to a dealer’s website where a special sale price (below manufacturer’s MSRP) was listed for one of their current-year models, as the newer models were about to come out. Since it was the same model year as the cars I was looking at, I printed it out and had that number handy, in case I needed it, as a negotiating tool at my local dealer.
“Google” the Actual Car Prices Paid in Your Area
Tip #10 − “Google” it
You can google the price to see what other people in your area paid, by typing in the car’s make, model and year, and adding words like “actual price paid” and your city and state or zip code. By doing that, I also got a general idea of how much wiggle room there was in the negotiations.
Tip #11 − Buying clubs
If you’re a member of Costco, AARP, and probably AAA, BJ’s and any number of other “strength in numbers” association, you probably can qualify for a “no-hassle, no-haggle” discounted price. I’m a member of Costco, so I checked their price before I bought. Now, doing so wasn’t quite as easy as I had hoped… I did have to request a price online, and in turn was sent to visit an actual dealership, who made me wait while they punched up the exact make, model, color, options, and VIN number of the car in question. That wait was about 20 minutes long – which they told me was because they had to wait for Costco to respond to them. I’m not quite sure that’s true, or if they didn’t just forget about me, but be that as it may, the Costco price was a pretty good deal – below the original 10% discount off MSRP that I’d already been offered by the first dealer I’d visited. I asked for a print-out of that Costco price (which they balked at, but eventually provided), as an added tool in my negotiation arsenal.
NEGOTIATION STRATEGIES
Tip #12 − Come armed with print outs of the competitive pricing info
Armed with all the pricing information mentioned above, I went back to the original dealership I’d first gone to and negotiated a further discount off the 10% discount he’d previously offered.
Remember to ask for more of a discount then you reasonably expect, as they’ll never just agree to your terms, but will usually meet you somewhere in the middle. I have to admit, that not everyone is as comfortable negotiating as I am – but negotiations were something I did on a routine basis in my marketing job, so it’s something I was able to do effectively. I won’t divulge how much additional I was able to negotiate, but will say it was worth the effort.
Tip #13 − Customer Loyalty Discount
The dealer I bought from this time, incidentally, happened to be the same dealer where I bought my last car. Make sure they know you’re a repeat customer, and ask for a customer loyalty discount. (Or, perhaps you qualify for their student or armed services discount…?)
Tip #14 − Regarding trade in
I read that you should always treat the trade-in of your existing vehicle as a separate negotiation from the new car sale. I did, in a way, bringing it up only after the sales rep and I had agreed on a price for the new car, but making it a “deal breaker” since the price they offered was substantially less, (as in $1,700 below), what I thought my car was worth. Once again, a bit of online research will give you a rough idea of value. This step also required further negotiation – and if you read my other post on my car buying experience, you’ll recall that I had to give a little on this as well. However, all said and done, I think I made a good deal, and hope these tips can help you to do the same.
BUY OR LEASE?
Tip #15 − Regarding Purchase vs. Lease
This is an on-going discussion in my household, as my husband is of the opinion that it’s often better to lease and get rid of the car before it starts causing major bills for routine replacement of things like battery and alternator, tires, fans and so on, or repairs of anything major. He probably feels that way since repairs to his car cost a fortune.
I, on the other hand, was brought up believing that if you own it, you can keep it as long as you like, and once you’ve paid off the initial cost, it’s “free”… making purchase a better value. With my last car, a Toyota Camry, I was well over 100,000 miles, and could probably have easily kept going.
I have to admit, Toyota cars are generally very reliable, in my experience. Plus, I have a fantastic auto mechanic that I know and trust, and have used for years, who never sells me anything I don’t need. For routine replacement of filters and such, after the initial warranty no longer covered replacement, I liked to support his local shop through my business… another argument for buying rather than leasing. But I digress.
I guess the true decision on whether you buy or lease is based on a variety of factors:
- Do you have the funds to make the purchase; or if financing, are the interest rates low enough to make it economically feasible?
- Do you plan on driving short distances to keep the lease vehicle under the 12,000-or-so miles per year limit that leases typically allow, or will you be hit with heavy fines and fees for “going over?” In my current situation, being between jobs and not having any idea if my next commute would be 5 miles or 50, it made best sense to buy. But that decision isn’t right for everyone.
- There are, of course, many articles about the buy vs. lease debate available online, many through car dealerships, your bank, or investment centers. Just one, from Smart Money, is located here.
WRAP UP
So… those are my thoughts, tips, and advice about how to research, negotiate and get your next new car. If you’re buying used, the info is likely somewhat different, but nonetheless, I hope this is a good starting point to getting you the best deal on you next car.
Do you have any advice I missed…?
3 comments on “15 Tips on Getting the Best Deal On Your New Car”
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Get your finances in order before you buy. Getting that “great rate” depends on it.
Cash is king… It makes sellers jump, move and shake.
Good point, Matt! Thanks for the tip and for following!