bumble_bee
Answer
Hi Bumble,
Visit edmunds.com or kbb.com for pricing if you've already determined what type of vehcile you want.
Sales people are savvy to the the fact that consumers can now obtain invoice pricing, msrp etc from sites such as Edmunds and others as well. They expect you to know this information, it's not a hindrance to them at all, actually a benefit, of course to consumers well.
Supply and demand still rules pricing, especially with high line luxury cars, depending on what type of vehicle you are considering, if it's a hard to get vehicle, your bargaining power will be reduced.
You should be forthcoming, in a diplomatic way of course, let them know what you've found as far as pricing. This should be stated as soon as possible, or as soon as the conversation allows. By letting them know, they will at least not start so high with an original offer.
Don't appear to be so eager, if this is really the car you want, don't show it. This will allow leverage on their part and reduce your bargaining power once again.
Of course it's not just the bottom line price of the car that consumers pay for. It's add ons, such as paint sealants, undercoatings, window etching, PREP Fees and other items they may approcah you into buying. My personal and professional opinion is that these items are very seldom needed, if at all.
Extended warranties are another issue as well, depending on your usage of the vehicle, this may or may not be a good option for you. I'm a firm beleiver that they are valuable under the right circumstances, but they are not always a good idea for every circumstance.
If you consider a warranty, you can always purchase before the original factory warranty expires. If you purchase when you buy the car, and it's included with financing, you'll be paying finance charges for something that you aren't useing.
Financing is another source of income for dealers, if you finance thru a credit union or bank, you will most likely get a better interest rate, but if you finance outside the dealer, they may not be willing to negotaite with bottom line pricing.
You should compare the options and use an online comparison calculator once you have the details. These can be found on most sites that offer auto loans.
Another small rule of thumb is the best time to buy, most people will tell you at the end of the month, this does have some value, but dealers will often ROLL the 1st day or 2 of sales into the previous month.
Manufactuers will offer incentives to dealers for number of cars sold, so if they are short, they may roll these couple of days to earn their incentives.
Also, be wary of a salesperson asking you how much you want your monthly payments to be. Don't divulge this info, just negotiate the price and then the financing terms,
Be careful as well if you are trading in a car or truck with a lien, if they claim they will pay this off it often times ends up back in your contract, they simply add this amount to the new financing arrangements.
Know your credit score before you start shopping, a common scam is an original agreement based on your score, then they call you back and say you weren't approved based on your score and attempt to get you financed with a higher rate.
Read the contract carefully before signing, look for "Arbitration Clause" that states if you are dis-satsified you waive your right to sue.
As with any business, sales people and dealerships are in business to make a profit, and so they should, but there is a big difference between making a profit and being taken advantage of.
Also consider the quality of the service dept, do they offer loaner cars? Do they have a good reputation?
My suggestion here is to meet with the service manager and have a list of questions that may be of concern to you, such as the examples listed above. Explain that you are perhaps buying a car from the dealer but you would like to know about their service first.
There's a saying in the industry, Sales departments sell the first car to a consumer but the service dept sells the second or more to the consumer. Meaning the quality of the service dept will keep a consumer coming back when he/she is in the market for another vehicle.
Also visit the links for more information that may help, especially if you are buying a used or certified used car.
Jerry Christopher
http://www.usedcarwise.com
Hi Bumble,
Visit edmunds.com or kbb.com for pricing if you've already determined what type of vehcile you want.
Sales people are savvy to the the fact that consumers can now obtain invoice pricing, msrp etc from sites such as Edmunds and others as well. They expect you to know this information, it's not a hindrance to them at all, actually a benefit, of course to consumers well.
Supply and demand still rules pricing, especially with high line luxury cars, depending on what type of vehicle you are considering, if it's a hard to get vehicle, your bargaining power will be reduced.
You should be forthcoming, in a diplomatic way of course, let them know what you've found as far as pricing. This should be stated as soon as possible, or as soon as the conversation allows. By letting them know, they will at least not start so high with an original offer.
Don't appear to be so eager, if this is really the car you want, don't show it. This will allow leverage on their part and reduce your bargaining power once again.
Of course it's not just the bottom line price of the car that consumers pay for. It's add ons, such as paint sealants, undercoatings, window etching, PREP Fees and other items they may approcah you into buying. My personal and professional opinion is that these items are very seldom needed, if at all.
Extended warranties are another issue as well, depending on your usage of the vehicle, this may or may not be a good option for you. I'm a firm beleiver that they are valuable under the right circumstances, but they are not always a good idea for every circumstance.
If you consider a warranty, you can always purchase before the original factory warranty expires. If you purchase when you buy the car, and it's included with financing, you'll be paying finance charges for something that you aren't useing.
Financing is another source of income for dealers, if you finance thru a credit union or bank, you will most likely get a better interest rate, but if you finance outside the dealer, they may not be willing to negotaite with bottom line pricing.
You should compare the options and use an online comparison calculator once you have the details. These can be found on most sites that offer auto loans.
Another small rule of thumb is the best time to buy, most people will tell you at the end of the month, this does have some value, but dealers will often ROLL the 1st day or 2 of sales into the previous month.
Manufactuers will offer incentives to dealers for number of cars sold, so if they are short, they may roll these couple of days to earn their incentives.
Also, be wary of a salesperson asking you how much you want your monthly payments to be. Don't divulge this info, just negotiate the price and then the financing terms,
Be careful as well if you are trading in a car or truck with a lien, if they claim they will pay this off it often times ends up back in your contract, they simply add this amount to the new financing arrangements.
Know your credit score before you start shopping, a common scam is an original agreement based on your score, then they call you back and say you weren't approved based on your score and attempt to get you financed with a higher rate.
Read the contract carefully before signing, look for "Arbitration Clause" that states if you are dis-satsified you waive your right to sue.
As with any business, sales people and dealerships are in business to make a profit, and so they should, but there is a big difference between making a profit and being taken advantage of.
Also consider the quality of the service dept, do they offer loaner cars? Do they have a good reputation?
My suggestion here is to meet with the service manager and have a list of questions that may be of concern to you, such as the examples listed above. Explain that you are perhaps buying a car from the dealer but you would like to know about their service first.
There's a saying in the industry, Sales departments sell the first car to a consumer but the service dept sells the second or more to the consumer. Meaning the quality of the service dept will keep a consumer coming back when he/she is in the market for another vehicle.
Also visit the links for more information that may help, especially if you are buying a used or certified used car.
Jerry Christopher
http://www.usedcarwise.com
Need advice for first time buying a car?
poopio
I basically have three options right now. I plan on buying a car this upcoming tax season, I should have around 2,000 between savings and tax return for a down payment. I'm confused as to whether I should buy a cheapo car under 2000 for my first car, buy from a used dealership for around 5-6,000 and risk getting scammed, or buy a new, or new used car in the 10,000 range. I currently am a student and live at home with minimal bills. I could afford to buy a newer car, and it would give me peace of mind knowing I won't have to fuss with mechanical problems, but it'll make money pretty tight. Any advice for a first time buyer?
Answer
First narrow down to what type of car you want and can afford. Then find the model and year you want and can afford. Research the car on Edmunds.com and kbb.com (Kelly Blue Book). These sites will give you the value of the car and any reported issues with the car you're looking at. Some cars are lemons (cars that break down frequently) so it's vital that you research your car on Edmunds.com
Cars have what's called "packages". Basically they're add-ons to what the car comes with standard. Examples are: Premium Package-Adds a moon roof, more luxury options, etc. Sound Package-Updated sound system, better speakers, multi-disc changer, iPhone connector, etc. Every car is different in this respect. Features that a package offers will differ between cars.
If the car is new, they're will be 0 millage. During this period, this is called the break in period. Do NOT excessively wear your car down during this period or you may damage it and shorten the life span of the car.
If the car is used, it REALLY depends on the age, brand, and if the previous owner(s) took care of it. If the maintenance was hardly done, the car is bound to have severe problems that you will have to fix. Buying a car with low millage is better than one with high millage. High millage can be considered 90,000+. Anything over 100,000+ miles you need to be VERY careful about. Most cars will develop issues over this millage.
Borrowing money is based on several things. The banks determine what the requirements are. One, you must have a job and at least have held it for a year. You must present your W2 tax form (it states how much you made in that tax year) and you're two most recent pay stubs. The bank uses this to determine if you can pay back your loan in a timely manner and that you aren't asking for excessive money. A bank will not lend you money for a Mercedes if you make minimum wage for example. If you make $7000 in a year. The bank will typically not lend you anything higher than that amount.
If you have no credit history or a limited one, you will be charged with a high interest rate.
Also, in most states, you are legally required to purchase insurance. If you have to borrow money, the lien holder (the one who lend you the money to buy the car) will require you buy purchase total coverage insurance. Basically this will cover any and all incidents if you get into an accident. This is a monthly payment on top of your loan.
The insurance amount you own will be determined by several things. If you're an 18 year old that's buying a sports car, you will be hit with high insurance rates. Why? Because insurance companies know that younger adults are more dangerous drivers statistically. However, if you took drivers ed and have a clean record, you may get these rates reduced.
Maintenance on any car is required if you don't want it to break down quickly. Maintenance is not just changing the oil, but maintaining everything. Examples are power steering fluid, breaking fluid, transmission fluid, clutch fluid (if it's a manual), tires, etc. Japanese cars are usually cheap to maintain. My Honda Accord Coupe costs $40 to do an oil change. European cars are more expensive to maintain and repair. I also own a Mercedes C240 and an oil change costs about $200. If you're just starting off and don't have a high income, get a Japanese car, like a Honda or Toyota.
Changing oil isn't that hard in Japanese and American cars. It's a PAIN in European cars. You can do this yourself if you know what you're doing. DO NOT use the incorrect oil or you will damaged the engine. If you're not sure, take it to the dealership. It will cost more, but they'll know what they're doing. You can find this out be reading the owner's manual (all cars come with one).
Different cars use different grades of gasoline. Make sure you are using the correct one or else it will damage the engine. My Honda uses Regular gas, the cheapest option. My Mercedes uses Super, which is the most expensive.
Overview of Owning a Car (what you'll be paying for and should consider before buying a car)
-the loan amount
-insurance on the car
-gas
-maintenance
-repairs
Luxury cars are more expensive to maintain and repair. I don't suggest buying one if it's your first car and if you have a low income.
If you do decide to buy used, get a Japanese car, if possible a Honda Accord. They're known to be one of the most reliable cars to buy. If buying used, try to get it directly from the owner. An owner will know the car better than a dealer, who's primary concern is to make money. I wouldn't buy a car that's older than 10 years old and/or with high millage.
First narrow down to what type of car you want and can afford. Then find the model and year you want and can afford. Research the car on Edmunds.com and kbb.com (Kelly Blue Book). These sites will give you the value of the car and any reported issues with the car you're looking at. Some cars are lemons (cars that break down frequently) so it's vital that you research your car on Edmunds.com
Cars have what's called "packages". Basically they're add-ons to what the car comes with standard. Examples are: Premium Package-Adds a moon roof, more luxury options, etc. Sound Package-Updated sound system, better speakers, multi-disc changer, iPhone connector, etc. Every car is different in this respect. Features that a package offers will differ between cars.
If the car is new, they're will be 0 millage. During this period, this is called the break in period. Do NOT excessively wear your car down during this period or you may damage it and shorten the life span of the car.
If the car is used, it REALLY depends on the age, brand, and if the previous owner(s) took care of it. If the maintenance was hardly done, the car is bound to have severe problems that you will have to fix. Buying a car with low millage is better than one with high millage. High millage can be considered 90,000+. Anything over 100,000+ miles you need to be VERY careful about. Most cars will develop issues over this millage.
Borrowing money is based on several things. The banks determine what the requirements are. One, you must have a job and at least have held it for a year. You must present your W2 tax form (it states how much you made in that tax year) and you're two most recent pay stubs. The bank uses this to determine if you can pay back your loan in a timely manner and that you aren't asking for excessive money. A bank will not lend you money for a Mercedes if you make minimum wage for example. If you make $7000 in a year. The bank will typically not lend you anything higher than that amount.
If you have no credit history or a limited one, you will be charged with a high interest rate.
Also, in most states, you are legally required to purchase insurance. If you have to borrow money, the lien holder (the one who lend you the money to buy the car) will require you buy purchase total coverage insurance. Basically this will cover any and all incidents if you get into an accident. This is a monthly payment on top of your loan.
The insurance amount you own will be determined by several things. If you're an 18 year old that's buying a sports car, you will be hit with high insurance rates. Why? Because insurance companies know that younger adults are more dangerous drivers statistically. However, if you took drivers ed and have a clean record, you may get these rates reduced.
Maintenance on any car is required if you don't want it to break down quickly. Maintenance is not just changing the oil, but maintaining everything. Examples are power steering fluid, breaking fluid, transmission fluid, clutch fluid (if it's a manual), tires, etc. Japanese cars are usually cheap to maintain. My Honda Accord Coupe costs $40 to do an oil change. European cars are more expensive to maintain and repair. I also own a Mercedes C240 and an oil change costs about $200. If you're just starting off and don't have a high income, get a Japanese car, like a Honda or Toyota.
Changing oil isn't that hard in Japanese and American cars. It's a PAIN in European cars. You can do this yourself if you know what you're doing. DO NOT use the incorrect oil or you will damaged the engine. If you're not sure, take it to the dealership. It will cost more, but they'll know what they're doing. You can find this out be reading the owner's manual (all cars come with one).
Different cars use different grades of gasoline. Make sure you are using the correct one or else it will damage the engine. My Honda uses Regular gas, the cheapest option. My Mercedes uses Super, which is the most expensive.
Overview of Owning a Car (what you'll be paying for and should consider before buying a car)
-the loan amount
-insurance on the car
-gas
-maintenance
-repairs
Luxury cars are more expensive to maintain and repair. I don't suggest buying one if it's your first car and if you have a low income.
If you do decide to buy used, get a Japanese car, if possible a Honda Accord. They're known to be one of the most reliable cars to buy. If buying used, try to get it directly from the owner. An owner will know the car better than a dealer, who's primary concern is to make money. I wouldn't buy a car that's older than 10 years old and/or with high millage.
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