How to Save Money Buying a New Car and Be Happy

By David Ning on 7 July 2010 (Updated 6 July 2012) 16 comments
Photo: theogeo

Though a car could be one of the most enjoyable purchases, many of us are simply fed up with the whole shopping process. It's not that we don't like picking and choosing our favorite color and options, but those sales people...arrgggghhh. In the old days, I would deliberately let the salesperson make a little bit of money by not negotiating as hard as I could because that's the only way I could buy a car and keep my sanity. With the Internet though, things changed. You can actually get the best price available anywhere and still be happy. Talk about having the cake and eating it too. Here's how...

(See also: The game of Haggling: How to Get a Great Deal on a Used Car.)

Forget Edmunds.com...

Edmunds.com is probably the leading website that people tend to reference in articles like these, but I'm telling you that you don't need to go there at all. Sure, the site's got a wealth of information about the car that you want to buy, invoice pricing as well as what others are paying in your area, but that's not nearly good enough. Think about it for a second. What others are paying is just the average of everyone who bought a car in your area. If the buying pool consisted of ten people with five paying invoice and five paying full sticker, the site would show a number between sticker and invoice. Now, did you get a good deal by going with that price? And don't believe that no one pays sticker either. There are tons of people who pay full retail (or close to it) on cars. Another problem with these websites is that they don't keep track of the miscellaneous fees that all car manufacturers tack on, which ultimately means that dealerships can mark them up and make money off you. Unless...

The Real Solution

Next time you buy a car and you want to get a VERY good price, all you have to do is visit the forums. Go to your favorite search engine and type in your car and the word forum (or message board), and a bunch of sites where enthusiasts meet and chat will pop up in the results. Click through and start reading. You can find all the issues people are having, look at pictures of your favorite car with every option imaginable and also find out all the fees and ways dealers can rip you off. But that's not all. There's a 100% chance that you will not only find invoice pricing for your car and all the options available but the deals other people are getting as well. Quite often, you will even be able to locate a few dealers who can offer you a price that is better than 99% of the ones you can get anywhere else. Armed with this information, you basically have two options: go with the dealer if he's close enough, or print the email and just go to a dealership that you like and ask them to match the price. Since you already have a solid offer with the exact options you like, all the normal sales tactic like up selling shouldn't work anymore. Either they can match the price, or they cannot. Most of the time, they will go to the manager's office and just match the price you give them, and you are done.

This Takes Work

The process I just described is by no means instantaneous. After all, it takes time to read the message boards and to figure out all the fees and deals that people are getting. But I love it. I actually find that the more I read about people's passion for a car I plan to get, the more I know whether the car is right for me. The more I read, the more I actually understand the options for the car and what is best for my own circumstances, and the more I read, the more I know whether now is the right time to buy the car. No more regrets. No more "Oh I wish I knew about that rim option" and no more "I didn't know you can get a great deal like that!"

It REALLY Saves Me Money

This saves me money in three ways.

  • The negotiated price. If no one is getting invoice on that particular model, then there's no point to be upset about not being offered that price. While there's always someone who will get the best price, it won't be just ONE person.
     
  • The fees. If you don't check, you will never know that the price of your car can contain system training fees, bank lease fees, and a money factor that the dealership can mark up. Since some are justified and some needs to be eliminated, how can you make an informed decision if you don't even hear about them until the very end?
     
  • Options. Like everything else, not buying it saves you the most money. Knowing other people's experiences can only help you decide whether, for example, that compass in the rear view mirror is that useful. For some, it might be a "must have". For others, it might not be worth the $500 it may cost. You decide.

The Best Part...

Money aside, the best part about spending the time to research is that it builds anticipation so the car will be that much more enjoyable when you actually start being the owner of one. If you want to get the most value, a used car is still the way to go, but if you ever buy new, this is the best way.

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Guest's picture
Amanda

This is the only way I will ever buy a car ever again:

http://ask.metafilter.com/37017/What-is-a-reasonable-offer-for-a-new-car...

It worked perfectly for us. We got exactly the price (including dealer fees, taxes, etc.) we wanted for exactly the car we wanted and only went to dealers to test drive.

Guest's picture
Hugh

This is a timely post for me, as I just started researching cars. After 7.5 years and 148,500 miles on my current car, it's time to get rid of her. Ironically, I spent about 2 hours on Edmunds.com yesterday doing some initial research. I think Edmunds has value, but I can see your point about the "true" lowest price they detail. As soon as I figure out the car I want, I will definitely go check out some forums. Now that I think about it, I consult forums while making other buy decisions, so why not for a car?

Thanks a lot for the insight. If any other commenters have suggestions on new or used car research, please share!

Guest's picture
kt

i have never ever gone shopping for a car and this is one of those things that i will put off for as long as i can. I cannot even drive. Means that first i have to learn then save enough to buy some wheels and then get shopping. Just the thought of that gets makes my head spin. Then i am reading things about carbon taxes to drivers, increased fuel prices, road maintenance charges, drivers having to pay for every mile they drive etc etc. All this makes me to want to stick to the bus and hire a car when it is absolutely necessary

Guest's picture
Guest

Costco has a great new car buying program for members. They do all the work and you end up paying the dealer invoice price plus $500-$750 (and most of the time you are still eligible for dealer incentives). Over the years, my family (two of whom are accountants) have bought five cars this way.

Guest's picture
gfb1

not a bad article, if a bit basic. a good starting point is always a place like truecar.com (but there are several... ), which will give you a range of actual sales prices in your local area for the car of your choice.

however, the best piece of advice i EVER got was from my uncle -- an ooolllld chrysler-vp (pre-iacocca), it went something like this, add NY-italian-accent for effect.

NO DEALER WILL EVER SELL YOU A CAR AND "LOSE MONEY".
THEY ARE NOT YOUR FRIENDS, THEY ARE TRYING TO MAKE A LIVING TO FEED THEIR FAMILIES AND BUY NICE THINGS -- ALL BY GETTING YOU TO SPEND YOUR MONEY.
THEY DESERVE TO MAKE A LIVING; BUT SO DO YOU.

THAT EXTRA $100 FEE AT THE END OF NEGOTIATIONS IS GRAVY FOR THEM. WOULDN'T YOU SPEND AN EXTRA 60 SECONDS TELLING SOMEBODY -- OOPS, FORGOT THIS ITEM .. BUT ITS ONLY $100.
A SWEETER BENJAMIN THERE NEVER WAS.

IT IS YOUR MONEY. YOU CAN WALK AWAY ANY TIME YOU WANT TO.
NO DEAL WILL EVER "DISAPPEAR".
IT WILL BE THERE TOMORROW -- THE DAY AFTER -- OR AT ANOTHER DEALERSHIP.

A GOOD DEAL IS ONE WHERE EVERYONE IS HAPPY AND SATISFIED.
HERE'S THE CATCH.
THE DEALER WILL ALWAYS BE HAPPY (BECAUSE HE/SHE WON'T SELL UNTIL CERTAIN CONDITIONS ARE MET).
THE QUESTION IS; WHAT WILL MAKE YOU HAPPY? DECIDE BEFORE YOU WALK IN; AND DON'T WALK OUT WITHOUT STICKING TO YOUR GUNS.

Guest's picture

The single best piece of advice I've heard is NEVER be afraid to walk out. Even if your two hours in and several "talks with the manager" and "this is the best offer I can do" don't for a moment feel obligated to continue. Even if you get to finance (been a while but I don't think you sign anything till the very end) and they start to nickel and dime you don't hesitate to stick to your guns and say if they keep trying to force stuff that you will walk out. There is only one of you and you are the only one with your specific needs. There are plenty of dealers out there. If you don't like what one does you can go to the next.

Guest's picture

You slightly touched on it, but look into the "factory recertified" cars. They're used but they're at a reduced price, checked out by dealerships and still come with some sort of warranty. May be harder to find prices other people paid because it varies wildly on things like how many miles are on it. But another option to save some money.

Guest's picture
Gearbox

You've already lost money with a new car. Go buy used and save a ton of money.

Guest's picture
Miguel

NOTES:
1.how much is your time worth?
2.We are in a recession and the auto industry is a beaten down sector
3.Edmunds.com is a valuable source
4.Salesman have to eat too, they buy cars too.

Look, I know that we are all trying to save money but we need to draw a line somewhere. I agree that these tips on saving on a new car can be beneficial to a really selfish person. I used to work at a car dealership and despite popular belief, salesman are really honest. Yes, they can be pushy but that's the nature of the business and they don't like it anymore than you do. We are still in a recession where the auto industry was demolished (General Motors) and not to mention thousands of workers lost their jobs because of it and you want to take every penny away from the salesman's commission when he or she has a family of her own? Atleast they aren't out there dealing drugs, they are doing honest work. The last thing they need is some selfish customer come in with an invoice price from the internet, a bad credit score, no money down, wanting a brand new car, and lie on the application about how much money they make just to get the 'best price" and brag about it later to their friends so that they do the same.

Now I am not a salesman so I don't feel obliged to defend them but I know the other side of the fence. I'm also NOT SAYING that your can't get a good deal. There are ways to get a good deal that you can afford and a deal the salesman can go home to their family about. I wouldn't be surprised that the people who try to squeeze out every ounce of profit from the dealership are the same ones complaining about the economy. Oh, the irony.

How much is your time really worth if you spend a week trying to haggle the best possible price?

As for Edmunds.com, I think it's a valuable source.

Guest's picture
whitewolf

you should go with a used car if its more affordable for you and not all used cars are going to be junk you can still find good cars out there that are not nwe you just got to find them.

http://whitewolfinvestigations.org/

Guest's picture

There’s another very important part of saving money on a car purchase that isn’t mentioned here and that’s getting the best interest rate on your car loan. Believe it or not, this is actually something that’s within your control. If you join a credit monitoring service such as freecreditscore.com, you can take a look at your credit report and score BEFORE you go car shopping. This way you can clear up any mistakes or inaccuracies that could be negatively affecting your score. It’s so important to enter the car buying experience empowered with your best foot forward financially, so that you can get the upper hand at the negotiating table—and save over the long run on your loan!

--Jeff Gillis, Director of Marketing

Guest's picture
Shaun

Very nice post for people like me who always looking for the best deal in getting car, the options that you mentioned will really help me in choosing the best deal I can get. Thank you.

Guest's picture
Rodney Watkins

Your write-up made me sit up and think! Another thing you can do before buying a new car is visiting forums to know beforehand about the maintenance issues you could face with that particular model, what kind of insurance costs people are paying for it etc. great idea!

Source: http://hartfordauto.thehartford.com/Safe-Driving/Car-Safety/

Guest's picture
Alan

I also used to use Edmonds but like a lot of people found there were even lower prices than they had listed so I I used www.truecar.com and got a really good price on a my latest car. The message board method just takes too much time for me

Guest's picture
Blair

Love the tip about searching in the forums for what people are actually paying - great idea!

Guest's picture
James Shaffer

I recently got a great quote from a dealership's internet guy on a hard to find car listed in their website inventory . Long story short, we went over immediately to find that the car had suspiciously "just" been sold (early on a weekday morning).

When we tried to get a similar price for the same car from another dealer he let us in on the trick. The internet guy didn't really have the car -- the great quote was just a way to get us in the door so they could try to sell us something else, while simultaneously convincing us that they had very competitive pricing (at least on cars they didn't have). So watch out.