How To Buy A New Car and Avoid Scams
What to Expect From This Car Buying Guide
- We reveal dealer scams including the cash flow shell game
- Getting the lowest purchase price
- The best time of year to buy
- How to use online resources to get the best deal
- Financing tips
- How much to offer the dealer
- How to find invoice pricing
- Guide to dealer fees
- Using multiple quotes to haggle a lower price
- And much more
We'll teach you to be relaxed, positive and patient, not paranoid and confrontational when you buy a car. Our visitors are informed get good deals after reading this guide. Once you are educated it makes it easier for the salesman if they are willing to make a fair deal. If you get ripped off, it's your fault for not being prepared. People spend weeks planning a vacation, but don't do enough research before they buy a $25,000 car. Using our advice, you'll save thousands.
A Good Price Isn't Always a Good Deal
A successful deal is win-win for both sides. However, don't just focus on the purchase price. Dealers like to play the "Cash Flow Shell Game" to make you think you are getting a good deal when you are really getting ripped off. An example:
- You get a very low price
- Dealer sneaks in fees
- Your trade-in is undervalued
- You pay a higher APR on the loan
In this example, the buyer thought they were getting a good deal but in reality they didn't. We will explain all of these tactics and tell you what to look out for and how to avoid becoming a victim. Don't read only half of this site and think you have all the facts, read everything and you will save the most money. Miss one valuable topic and it can cost you thousands of dollars. Don't be a "monthly payment buyer" and focus on what your payment is going to be - that is the worst thing you can do. If you do this or become a "trade-in buyer" you will play right into the dealer's hand and you will get ripped off, I guarantee it!
When is the best time to buy a car? What are secret incentives?
There are two "best times" to buy. The end of December is a good time. Everyone is out buying XMAS gifts, leaving dealer lots void of customers, motivating them to cut prices and break year end sales records. Another good time to buy is July through October as dealerships sell off cars at lower prices to clear space for the new models. Secret factory to dealer incentives can be $1,000-$6,000 in addition to known rebates! Because of these secret incentives, if you buy a car at invoice, the dealer earns thousands more. You should haggle over this incentive, as many dealers willingly give up all or part of this incentive, making your cost lower.
All Preparation Can Be Done From PC, Tablet or Smart Phone
When I purchased a new SUV, I did all my work without leaving my house. The old way of buying cars wasted hours at several dealers, now you never leave the comfort of your chair. Thankfully the internet has given us many great sites that allow you to just relax, research and get quotes. You pick one dealer to bring all your research to and calmly negotiate the best deal you've ever been involved in. Click here to read our reviews of online new car buying sites.
CarWoo is a new negotiating service that recently launched nationwide. Their service allows you to negotiate with multiple dealers through a competitive marketplace console while keeping all of your contact and personal information secret. The only thing the dealer sees is your first name and last initial until you have picked a deal and are ready to finalize your purchase. Click here to read more about CarWoo.
Exclusive to visitors of our site, try the Drive Your Dream Auto Buying Program. It gives you special friends and family pricing, leverages volume buying power of large companies, employers, or membership groups. Drive Your Dream also allows you to choose your car and configure options online, and get an instant price quote from a local dealer in the network. This works best for you if you dread haggling. Click here to read more details about Drive Your Dream Auto Buying Program.
Get Invoice Prices, Rebates, Incentives and a Car Buying Coach
The excellent FightingChance.com consumer advocate package gives you prices, rebates, dealer incentives and industry intelligence on the latest sales figures for your car. Their information levels the playing field. Every single one of you should be using this package. A great benefit is your ability to talk to someone there and ask questions about anything that comes up as you go through the purchase process. We feel their data is more accurate than Edmunds and Kelley Blue Book, and you can't beat their market intelligence. Many of the best deals our visitors report back were attributed to this awesome package. This is tool that pays for itself a many times over and I personally use this package every time I go car shopping.
Competition Gets You the Best Deal
Enter the dealership armed with "The Folder" that I will talk about in Chapter 3. Once they see that you are prepared it will work to your advantage. The deal will now proceed on your terms, not theirs. Don't enter a dealership without having quotes from CarWoo, Cars.com, Edmunds.com, Autobytel and CarsDirect or you'll overpay by thousands. Commissioned salespeople fear "The Folder" because they know you did your homework. They rely on uneducated car buyers who don't do any research before they go shopping.
Competition also works to get you the best rate on your loan. The dealer is not the only one that can finance your car, online options are available. Once approved you will have a check in hand and know your interest rate before you even set foot in the dealership. You can use your low rate to negotiate with the dealer or use your Up2Drive or myAutoloan check to pay for the car at the low rate. For more information about online financing, click here to read our chapter on auto loans.
Warning About Advertising
Advertisers spends millions in psychological wording research to trick you. Take a look a the image to the right. You thought it said "I love Paris in the Springtime" right? Wrong! See the extra "the"? It really says "I love Paris in the the Springtime." Your brain tricked you. Advertisers rely on your brain to trick you so they don't have to lie. When an ad says 1.9% APR, look for the "*" (fine print). It will say "with approved credit only" or "qualified buyers only." The 1.9% reels you in. You must have perfect credit to get a 1.9% rate. Most people will not qualify. Other scams you may hear:
- "We'll Get You Out Of Your Current Lease No Matter How Much You Still Owe!"
- "We'll Payoff Your Loan No Matter How Much You Still Own!"
- "We'll Give You $4,000 For Any Trade-In!"
- "Don't Make A $5,000 Mistake!"
- "No Reasonable Offer Will Be Refused!" (Except yours, because it's unreasonable)
In the examples above, the dealer is not doing you any favors, they want you to buy a car from them at full MSRP. They also want your trade-in so they can give you $4,000 below market value and resell it for a higher price. Sometimes an ad can make you think that trading in a car relieves you of your obligation. It does not! This gets many buyers into trouble. You are actually taking on increased debt, when you thought you were dropping one debt for another. They lied to you in their ad, they are not doing you any favors. They are piling on more debt. Very clever trick, but now you're onto them. Next time you hear those ads, you'll know what they're up to. The ads should be worded "We'll get you out of your current car, then roll what you owed plus penalties into your new car purchase so you can payoff 2 cars!"
Don't trade in a car you owe money on. Aside from adding to your debt, you are inviting other problems. Since the dealer doesn't care about your finances they are likely to not pay the bank on time and lead to penalties for you.
How Car Dealers Profit From New Car Purchases
You think new car dealers have just one way to coax money out of you when car buying? Thank you for playing. Some new car dealers convince you to spend so much, you didn't know you were taken for a ride! Car buyers who brag of high trade in value were asleep at the wheel leaving money on the table in other parts of the deal.
- Offers you $3,000 to $4,000 below market price for your trade-in
- The new car purchase price when buying a car
- Marking up the rate they give you for new car financing
- Environmental package extras and new car extended warranties
I'll show you how to prevent losses in these areas. You have enemies to overcome including fear of the unknown. We'll turn that fear into a target rich environment of opportunities for a successful new car purchase. Shop where salespeople are not on commission, but on a salary. They still want top dollar, they just don't have commission fever. Some no haggle dealers give good deals, while most do not. Shop in a competitive market. Make your offer as shown on this site, bounce it off all the car dealers and even "No Haggle" dealers will bite. Many "No Haggle" dealers have a "low" price on the windshield that you find out later included the rebate, so they actually charged you (MSRP - Rebate), which is no bargain. Dealing with a fleet manager can be helpful, since they are not on commission. If you make an appointment, show up, it's bad business if you don't. Good salespeople like an informed consumer, it's easier to sell them a car, at a fair price for both parties.