Step by Step: The Car Buying Checklist

Many people feel that they know how to buy a car from a dealer. They've bought many cars in their lives and they "don't need no stinkin' advice" to make the best deal they can make.

Before you go into the process of purchasing a vehicle, remember 2 things:

1. Regardless of how prepared you think you are, there's probably something you missed if you aren't systematic about it.
2. Most people buy a car every 2-5 years. Most salespeople sell 2-5 cars a week. They have a little more experience than you on "the battlefield".

Here's a step-by-step checklist that briefly describes the process you should use before, during, and after making a car deal, whether you are working with Washington DC Dodge or Honda Dealers in Los Angeles.

Research Your Target Vehicles

This one seems like a no-brainer, but it's possibly the most important. Are you looking for something general, like a "low-mile import sedan" or something specific like a "new 2008 Honda Accord EX V6, Red". The internet is loaded with reviews and pricing guides to lead you in the right direction.

For new cars, make sure to visit the manufacturer's site to see what rebates and incentives are available. It can make a difference in your choice if you're considering multiple makes and models.

Secure Your Financing

It is amazing how many people start their loan process at the dealership. It's the lazy way out. FACT: Most dealers can get you a better rate than you can get elsewhere. FACT: Most dealers won't give you the best rate you can get if you don't have a better offer up front. Especially for used cars, get an idea from your bank, leasing company, credit union, or third party finance provider of what you qualify for based on your target vehicle. If you go in knowing what rate you should get, what term works for you, and what your approximate payment is, you can either negotiate a better rate at the dealer or have financing ready if they can't beat your rate.

Find Vehicle Candidates Online

The vast majority of dealer websites will have their inventory listed online. Use the search engines to find "Used Cars New Hampshire" or "Longview Texas Honda" to get a list of local dealerships that should have what you want. Check their inventory, then request a quote or call the dealership to verify availability. NEVER go to the dealership without making sure the vehicle you are considering is physically at the car lot. It also makes sense to get a vehicle history report on used cars as well.

You should also check out classified sites like CraigsList, Autotrader, Used Car Search, Cars.com, and many of the other new and used car listing services. These will help you to sift through the dealer inventories and compare vehicles side by side. Need a new car? Get quotes from multiple dealers through lead services and car credit specialists that work with multiple dealers.

Perhaps most importantly on this point, expand your horizons. So many people search in a small radius. You have the internet. You can shop 20 dealer inventories in a couple of hours. Driving 100 miles -- pain in the rear, but hey, how often do you buy a car? Isn't it worth a longer drive to get the right deal?

Prep Your Trade-In

You've found some cars you like. You drive up, pick one out, get ready for the negotiations, and the salesperson asks you for the keys to your car. When he returns, you are one of the majority of people who isn't satisfied with what the dealer offers.

You can help this. It sounds simple, but pay attention. Before you go to the dealership, change your oil, empty the car out, and wash it. A full detail is preferred, but at the very least, make it clean. Make it smell good. Make it appear as close to immaculate as you can. Replace any inexpensive auto parts through national auto parts vendors or straight to Toyota Parts from the OEM.  A car that seems well cared for will get a higher trade value than one that does not have that "pampered" feel.

Check the value of your trade before going. You can use sites like Kelley Blue Book or Black Book, but your best bet is to get a real quote from a car buyer. Most areas have buyers like Car Cash New York. Find the one in your area and get a cash bid before heading out.

Price In Mind

Every car you are considering, whether new or used, has a market value. For used cars, it's normally somewhere below the average price listed on the classified sites above for similar vehicles to the one you're considering. For new, it can be anywhere between invoice and $1000 over invoice, depending on the demand of the vehicle. Some can be sold below invoice. More "in demand" vehicles can bring MSRP, though this is very rare.

At The Dealership

There are certain things to remember when you're at the dealership. Several articles can be written about what to do when you're there, how to inspect a preowned vehicle, negotiating techniques, finance office advice, and everything else that happens at the dealership itself. Instead of stuffing details into this article, we'll list a few pointers to remember:

• Just about everything is negotiable. The price, the trade value, the interest rate, the extended warranty -- most dealerships will work with you on everything that you want to work on.
• Avoid payment negotiations. If you go in knowing that a $9,000 car with $1,000 warranty on a 48 month loan at 7.9% with no trade or cash down should be a few dollars under $250 per month, then there's no need to freak out when they tell you on the sales floor that your payments will be $270. They are simply padding your payment expectations so the finance manager has room to negotiate interest rate and add-ons. No worries. Everyone has the right to try to make money. They just don't have to make it all on you.
• Remember, you are in control. You're the buyer. You can walk out on a deal at any time prior to signing the papers and driving away. Don't feel pressured to make a move you don't want to make, but also, don't hesitate on a great deal. If it's great, make the deal.
• Have fun! Sounds hard when buying a car, but the internet has changed the business for many car dealers. It's ultra-competitive now, so many dealerships are shifting towards a customer service attitude instead of a shark mentality. If you go in with the right attitude, it will probably be a smooth transaction. If things get fishy or turn towards high pressure, remember the advice bullet above. You are in control. You can always find a dealer that will work with you.

After the Deal

Again, this could be a long section, but we'll keep it to one or two paragraphs. File your paperwork in a safe place. You may need it later. Set your online (or, gulp, offline) calendars to the important dates -- payments due, scheduled maintenance, end of warranty, etc. Follow up on anything that is owed to you -- they may not call you when the add-on MP3 player you bought comes in, so be sure to keep in touch.

Get involved with automotive forums, become a member of an auto club, and check out any programs that the manufacturer has for owners. There is normally great information as well as piece of mind that can be gained through these types of services.

Perhaps most importantly, talk about your experience. If it was a bad one, make sure people know (even though if it was a bad experience, you should have walked away before finishing the deal). If it was a good one, make sure EVERYONE you like knows about it. This is the 21st century. There are automotive blogs and review sites that can really get the word out. Whether they were good or bad, make sure to share the information. The more people know about a dealership, the better.

Also, the more people who talk/rate/blog about their experience, the closer we will get as a society to having dealers who are conscious of their customers' needs. It will happen some day. The more that people communicate about the good and bad dealers, the better off all of us will be in the long run.

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Read more Car Buying Tips on this blog.

Car Buying Tips: Buy for the Deal, not the Need

The smartest car buyers in the world are almost always in the market for a new (or new to them) vehicle. They keep their car in good shape, make their payments on or ahead of time, and their eyes and ears are always open for the next great deal.

Sadly, most people choose to buy a new (or new to them) car when the need arises. This majority is missing the point.

For new car buyers, the best time to buy a car is when the manufacturer needs to sell them. Last year's leftovers are potentially a good buy for those who drive their vehicles over 5 years at a time before trading, but otherwise, the money saved is lost in the trade or selling of the vehicle later.

Manufacturers come up with something new every year to get the instant boost in sales. These tactics create trends that sometimes last, but usually go away.

Take 0% financing, for example. A few years ago, it was big news when the manufacturer finance departments started offering 0% financing on short term loans. As the months moved forward and sales started stalling out again, the length was extended, capping in September of 2006 when Ford announced 0% for 72 months. Many of the other manufacturers followed the trend, and then, it was gone.

Employee pricing was a big deal in 2005. General Motors introduced it, and within a month, almost every manufacturer had some version of it. It was widely successful for bulk numbers, but the manufacturers and dealerships took major hits on their bottom line, so it went away, potentially for good.

Keep abreast of any changes that are happening. Many dealerships like Hyundai Washington DC, Shreveport Used Honda, and Toyota Dealers Minneapolis post their specials regularly and offer up-to-date incentives that can be a guide for their local car buyers.

These are the events that new car buyers should look for, but what about used car buyers? There are no magic incentives that point to a time for used car purchasing, is there?

On the contrary, cash back incentive announcements on new cars have a dramatic effect on the used car market. It is delayed, but when a particular model gets a major cash back incentive, the month or two that follows will show a decrease in late model used car prices.

When a dealer buys a program or late model used car at auction, the values that they pay will decrease when a major incentive occurs. When a new car cash back incentive comes out, check the used car values for that particular model. Check again a month later. Then once again a month later.

That 2nd month after an incentive is prime time to buy the late model used or program vehicles.
Finally, older used car buying is a game of patients. For those looking for vehicles under $5,000, the best thing they can do is wait, watch, and be ready to pounce. It can take months, or it could happen in a week, but there are individuals out there who want a quick, easy transaction, or who simply do not know the value of their vehicle. Watch the online and newspaper classifieds and be ready to make a move.

Instead of waiting for your car to reach a mileage milestone, or a change in circumstance, or a vehicle breaking down, do the research and buy your next vehicle at the exact right time.

This car buying article brought to you by Automotive SEO.

If it's too good to be true...

You know the rest of the saying. I wanted to point out one of the major flaws in today's automotive advertising world. It isn't the fault of the car dealers, at least not completely. To some extent, buyers who still make the trek to dealers to buy a $10,000 new car that has a sticker price of $20,000 help to perpetuate one of the most misleading advertising techniques in the automotive world.

One pay leases, or just about any lease for that matter, allow dealers to advertise "Drive Off" prices that are so far below the MSRP, they couldn't be real without some sort of catch. The "catch" with these programs is that you do not actually own the car, you are simply leasing it for the period set by the finance company. At the end of the lease, you can turn your car back in or pay the balance.

Leases in and of themselves are not bad. I want to focus on advertising the leases in a way that makes people believe they can buy a car for far below actual cost. People come in to buy a car at an outrageously low price. This price is based upon the total lease payments of the most basic version of a model. When the customer gets to the dealership, reality is spilled upon them in various degrees and at different intervals.

The goal is to get the customer to the dealership, then put them into a different model at a different cost. Despite the majority of people who do not fall for this tactic, there are still enough who go in for $150 payments and drive off at $299. Granted, the vehicle they take home is nicer than the one advertised and probably has a better finance term than the one offered, but it still keeps some dealers thinking that the tactic works. Why? Because it does, and in today's super-competitive automotive marketplace, it is important for them to do what they can to make it happen.

If you see an advertisement that interests you, call or email and get the details. All of the details. Chances are very strong that you will not get the complete picture upon first inquiry. It's okay. Keep asking. When they say they can discuss it more in-depth at the dealership, simply tell them that "if the terms of this deal are so bad that you cannot divulge them over the phone or email, it must be a ploy to get me to come in hopes that once I am there, you can put me in something else at a higher cost and payment."

Wait for a reply. If it isn't a good one, find someone else with which to deal.

Car Buying Tips

Where Car Dealers Make their Money Now

Before the Internet came and ruined everything, it was possible for car dealers to average over $2500 in adjusted gross profit on the sale of a vehicle just in the "front end". "Adjusted" gross profit does not take into account dealer pack, another form of profit that the car dealer institutes to give a base profit for dealer costs. In other words, even in a "break even" deal, the dealership itself still made hundreds or even thousands that was used towards base expenses. The profit over that was truly profit.

In today's world, many car dealers do not average in the thousands on their "front end" profits. Some average less than $1000 profit on vehicles that cost $25,000 or more. One may ask how they can stay in business if they are making pennies on the dollar compared to the early 90s.

The answer lies in the "back end". First, the definitions: Front end is gross profit on the sale of the vehicle itself, regardless of the payment method. Back end gross refers to money made in the Finance and Insurance department through the sales of various products and through percentages made on the financing of the vehicle.

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Quality car dealers that treat their customers right include Toledo used cars

Another great one to consider when looking at Fords would be OC Ford

Those who buy imports can visit Houston Hyundai Dealers

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These products, which include warranties, gap insurance, credit life, and other various elements, are often high profit items. A dealer may sell an extended warranty for $1,999 but might only pay $600 for the contract itself. The rest is profit.

In financing, dealers have a "buy rate" and then they have the rate that they sign the customer with. The buy rate is how much the finance company charges. Anything over that is profit, and it can be very large.

For example, if a dealer has a buy rate of 4.3% and they sign a buyer up at 5.9%, the money earned through the extra 1.6% is given to the dealer. This is a very simplistic way of looking at it, but it gives you an idea of how the system works.

While front end grosses continue to go down, especially in the ultra-competitive new car market, back end grosses are getting higher. While I am not suggesting that this is a bad thing, it is the place where average consumers are still in the dark.

Dealers have to make money to survive. Despite common irrational feelings that people have towards dealers, they are still a service to us and they deserve the right to turn a profit. That doesn't mean that they have to make their profit off of YOU.

Shop around before you go to the dealer. It isn't just finding the best deal on a vehicle. It is important for people to have an idea of their best interest rate as well as the best prices on warranties or other services they may want to consider. Most of the times, these things can be negotiated in the F&I office.

Check with your bank or credit union to find out what rates they are offering. Check various online auto finance places. Know where you stand in regards to your credit so you can get the best rate you deserve. This does NOT mean applying for a bunch of car loans. Try to get an idea without having your credit pulled more than once or twice. If you can prepare ahead of time, order a credit report and take it with you to the bank or credit union. Ask for an honest assessment of what you can get and what to expect. The car dealer will normally be able to meet or beat any number you get from other sources, so knowing what they offer will give you a bargaining chip.

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There are a lot of dealers that treat their customer right, such as Los Angeles Nissan Dealers.

In Pennsylvania, Ford Dealers Carlisle sells standard cars, plus Roush Vehicles.

With the growing popularity of the economical SUV, being one of the Houston Jeep Patriot Dealers has advangates.
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The same holds true for warranties and other products. It is a little tougher, but can be done. When comparing online, it is important to make sure you are shopping "apples to apples" and not "apples to oranges". Look at it like choosing a health insurance plan. There are cheap plans, but they are just that: cheap. Find a good plan at a good price and be ready with the details when you go to the dealer. Again, they can usually beat anything that you bring in, but if you don't have the information, they won't volunteer a discount.

Smart shoppers know to compare everything, not just the cars they are buying. Knowledge is power, but more importantly, knowledge can save you a lot of money.

Car Buying Tips

Some Humorous Dealer Scams and Secrets

Whether they try to hook us with a "Push, Drag, or Pull" sale or guarantee to pay off our trade no matter how much we owe, car dealers often use less-than-honorable methods to get us to come down to their dealership.

This article talks about 10 of the best ones. I wanted to add a couple:

11) Special Inventory Sales - With this scam, an ad company advertises their "event" as something coming from someone else. "Trader Bob" or "Repo Harry" is in town with his traveling circus if cars that are, for some special reason, marked way down. They normally don't even mention the name of the dealership until the end, as it is a canned media production with the recipient dealer inserted at the tail.

In reality, they are bringing in 5 or 10 extra cars and just putting balloons and red tags in the cars that the dealer already has on the lot.

12) Lenders on Hand - This is probably my personal favorite; it makes me giggle every time. Bankers and lending institutions are sending representatives from across the country to sit in a tiny room and sign off on your loan application. It's hilarious.

Technically, the lenders are always at hand. The internet, fax, and telephone makes it to where 95% or more of the lending institutions in the industry can approve or deny a loan in minutes. There are special finance companies that have to verify information and take longer, but for the most part, anyone with decent credit or better can get an answer while they wait, despite the fact that the dealer doesn't have to have a representative from Ford Motor Credit in the closet to stamp his approval on a contract.

Read the first 10 Dealer Scams.





Dealing with Car Dealers

The Worst Way to Buy a Car - A Brief Bad Experience

If it's too good to be true...

Anyone who reads this blog regularly knows that I've mentioned that line before and it never needs to be finished. Just heard of another "technique" that absolutely appalled me.

A friend goes to a dealer in a major east coast metro, drawn in by an ad that says "Drive home in a new (brand withheld so I don't get a lawsuit) today for $13,400!" The cars mentioned normally retail around $20,000.

Upon arriving at the dealership, he finds a friendly salesperson who confirms that it's not a scam and that the deal is real. "I'll own this car for under $14K," my friend asked.

The salesperson, perfectly trained to word it just right, says, "Yep, if you write me a check for $13,699 ($299 doc fee) it'll be in your driveway this afternoon."

You probably see where this is heading.

After a couple of test drives, the negotiations started. He opted for one with more than the basic options, which the salesperson said would be sold comparably but just a it higher than the one in the ad. No problems yet.

Finally, the negotiations. The first pencil comes back at $23K. My friend started to object, but the salesperson cut him off nicely and said that it was just a starting point and that they had to list MSRP for paperwork purposes. He crossed out the number, turned the worksheet over, and typed the following statement for my friend to sign:

"I will be the driver of this ________ for $15,384 cash or check."

My friend was relieved. He signed, called his wife, and waited for the finance department to call him back for the paperwork.

This is where it got ugly.

Versus going into the details of the 2 hour exchange that followed, let me give you the details of the scam and you can use your imagination to fill in the blanks. It's a single pay lease option. A consumer can "lease" a car for three years, paying only the price of the lease itself. At the end of the 3 years, they can either turn it back in, trade it in, pay off the balance, or finance the balance.

The single pay lease in itself is not a scam. For many, it's a great way to "hedge your bet" that the car will depreciate quickly. Most trade or replace a vehicle every 2-4 years anyway, so it's an easy way to pay for a car and not have to worry about trade values or anything like that later.

The scam is, of course, in the way the mesage was delivered hours after the exchange began. The ad is misleading. The salesperson was misleading. The negotiations were misleading. It wasn't until the final stage when the "trap was set" that the truth finally came out.

This is a bad practice, indicative of the techniques used in the 80s and 90s that gave the car business such a bad reputation. When investigating deals and specials on vehicle, remember, if it's too good to be true...

This article is sponsored by honest dealers and automotive companies such as New Hampshire Volvo Dealers, Toledo Dodge Chrysler Jeep, and Beaumont Chevrolet. People have choices when buying new and used cars. It's up to you to get the information necessary to make a good one.

Car Buying Tips

Car Buying Tip: The Best Time to LIE is Now

Almost all of the manufacturers and their dealers say the same thing during many of their commercials.

"Now is the best time to buy."
"Don't wait. This offer will pass you by!"
"Hurry, before the best deals are gone."



As buyers, it's in our best interests to wait for the absolute best deals. That's a no brainer. The tough part is sifting through the good deals to get to the great deals. If every deal is the best according to the advertising, how can we recognize the real gems?

First, a bit of history about how it works. The car business is impatient. All of them, from the CEO down to the salesperson, wants action immediately. They are compelled to "whip the horse" at all times. It's a constant sprint despite the fact that they are in it for the long haul. Thus, all advertising, all inquiries, and all contacts are treated in a way that will generate revenue in the shortest time possible.

The way that consumers can get the very best deal is to lie. No, I don't mean the lies propogated by other car buying advice websites, such as hiding the trade until the last minute, getting financing ahead of time and not telling the dealer, or making up numbers that you were "quoted." I'm referring to lying about the urgency of your purchase.

Set up an email account specifically for your inquiries. Once you've identified the make and/or model that you want, start contacting everyone and their dog from the dealers to the manufacturers to the third party websites such as Edmunds and Automotive. When prompted about time-frame on making a purchase, check the box for "Now."

Why? The simple fact is that people who are in the market today are the ones that get the most attention. They are the ones that can put money in everyone's pocket. They are forces to be reckoned with and demand attention.

After this is established, it's time to switch gears and wait. You should receive a ton of responses. Stress the fact that you are looking for the absolute best deal. Be polite in your responses, keep in contact regularly, and let them know that you can pull the trigger at any moment.

The deals will roll in. Compare them with each other. Research them on the Internet. Then, you wait again. What are you waiting for? You want the best deal, right? When the best deal arrives, EVERYONE you've contacted will let you know in unison.

In 2006, Ford was really pushing their low interest rates. It wasn't making a dent because almost everyone had low interest rates available at the time. So, they announced very abruptly that they were offering 0% for 72 months on most makes and models. This sent a ripple effect through the industry. In a week, I received contacts from everyone I'd been in contact with: several dealers, Ford, Lincoln, and Mercury, three 3rd party websites, and even a classified website. This resounding proclamation told me what I needed to know: this was the real deal.

In conclusion, don't lie to car dealers just because you think they are lying to you. BUT, it's acceptable to feign your interest to get on the lists that will let you know that the real "best time to buy is now!"

Car Buying Tips

Before the Dealer, Try the Automotive Classifieds

In this competitive market, car dealers are starting to rely more and more on third party websites to generate leads. They need to be in front of the customers in any way they can, so having their inventories available on automotive websites is important.

The consumer can take advantage of this. There is, of course, the obvious benefit of being able to search through multiple inventories simultaneously, but there is one thing that people don't often know. Because internet departments are often fighting to justify their budgets, leads that come to them from automotive classified websites are often "worked harder" so they can have stronger statistics.

In other words, you may be able to work a slightly better deal going through these automotive portals than you would have had you gone straight to the dealer. Sound crazy? It absolutely isn't.

Try it. You'll probably be surprised.

Car Buying Guide

Automotive Classified Profile: Cars.com

In 1998, Cars.com was born.

With over 8 million monthly visitors, 13,000 car dealers, and the addition of private party sales, Cars.com is a resource that every shopper should browse when looking for a car.

The interface is strong, offering a quick portal to the inventory. Unlike some of its competitors, you can get to the inventory by selecting make, model, and zip code, then one click takes you to the vehicles. Direct links to the dealers are present, so visiting dealers coast to coast from Portland Honda to Boston Toyota is just a switch of cities or zip codes from reality.

The advanced search options are very crisp, allowing you to search multiple makes, models, and years simultaneously. You can search by zip or city and you can narrow your search by how long the vehicle has been listed.

The listings themselves are okay. They offer several calls to action, but someone who isn't familiar with it may not be able to quickly find the right buttons.

Overall, I recommend Cars.com as a place to search for cars, especially if you don't mind working with dealers and you are willing to buy in a major metropolitan area.





Vehicle Buying Tips