How To Buy A New Car

When you buy a car, there's no need to leave your mouse
When I purchased a new SUV, I did all my work without leaving the mouse. The best time to buy a car is during a rebate and if you can convince the dealer to give up holdback, any factory to dealer incentives, drop the dealer prep and ad fees. This can happen any time, so watch for rebates and secret incentives. The old way of buying cars wasted hours at several dealers, now you never leave the comfort of your chair. With online new car buying sites, just relax and get new car purchase quotes. If you can do better, then pick one dealer to bring in all your research to, and calmly negotiate the best new car purchase you've ever done.

Carwoo is a new negotiating service that recently launched nationwide. Their service allows you to negotiate with multiple dealers 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 new car purchase. With the $99 "plus" plan (discounted to $89 for CarBuyingTips.com visitors) that I would recommend, Carwoo sets up a competitive marketplace for you. All you have to do is log into your private console and watch dealers make offers so you will always get the best deal. The free basic plan also lets you negotiate for a new car without revealing your contact information and gives you a set of tools to work with but you do not get the benefit of the competitive marketplace. 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 over new car pricing. Click here to read more details about Drive Your Dream Auto Buying Program.

DO NOT let Dealer "A" locate your new car from Dealer "B"... Don't do it!
We get the most complaints about this. We discourage car buyers from letting Dealer A get your new car from Dealer B. Sometimes due to geography and lack of dealer coverage while buying a car, you may have no choice. Some dealers routinely locate new cars for car buyers and make them quite happy. But 99% of the time I hear complaints from buyers about this. The complaint ratio is so close to 100% that we tell you to always avoid this situation. It's a crap shoot and the house always wins. I suggest you just find out who Dealer B is and go buy a car from them. One dealer told me the best advice if Dealer A offers to locate a your new car from Dealer B, don't sign anything until you've seen the car, or sign a letter of intent that the contract is not binding until you have seen the car and given your ok. I always hear of games and scams when dealer A has the car shipped from dealer B, because of towing costs, and dealer A loses the holdback to the original Dealer B. All sorts of fees show up. Even worse, the wrong car shows up and you are stuck buying car you don't want because you put down a deposit! I also get lots of complaints about missing MSRP stickers, which is a felony. You'll eliminate these issues if you buy a car from the dealer who has the car. Search all the dealer web sites for their inventory. Before you give ANY money, be sure you have a written buyer's order from them clearly stating what new car you are buying, the VIN#, the color, and all the options, so there is no doubt what you are paying for. If they give you bogus lip service about "not knowing the VIN# yet", they are lying.

Where can I get new car dealer invoice prices, new car rebates, and incentives, and a coach to talk me through buying a new car?
The excellent FightingChance.com consumer advocate new car buying advice site gives you new car prices, rebates and dealer incentives, tons of great negotiating tactics, and industry intelligence on the latest sales figures for your car, softening of sales, information that levels the new car buying field. Every single one of you should be using this car buying info package. Their best benefit is your ability to talk to someone there, to ask questions about anything that comes up as you go through the purchase process. You also get sample letters for your fax/email attack new car buying strategy. We feel their data is more accurate than Edmunds and Kelley Blue Book, and you can't beat their new car buying market intelligence. The new car purchase best deals our visitors report back were attributed to this awesome package. If you're buying a new car you should be using this tool that pays for itself a hundred times over. I used one before car shopping for both my cars.

Competition gets you the best new car purchase price and interest rate
Enter a dealer with "The Folder", once they see your lower new car price quotes from honest sites, you've stopped dealer sales tactics in their tracks. The deal will proceed on your terms, not theirs. Don't enter a dealership without knowing how much you can buy a car for from Cars.com, Edmunds.com, CarWoo, MyRide.com and CarsDirect. If you don't have a consensus new car quote from these sites, and if you don't know what you should be paying, you'll overpay by thousands. Don't just look up dealer cost and MSRP. You need real life new car purchase quotes to keep dealers in line. Then you show them your new car price quotes in "The Folder", that we'll talk more about in chapter 3. Commissioned salespeople fear "The Folder", because they know you did your homework. They rely on dumb car buyers who don't know their own credit score and don't research before they buy a car. If your new car purchase quote from CarsDirect is lower than the new car dealer, then for Pete's sake, buy the car online. No haggling for hours and killing your Saturday, your discounted new car price is listed on screen, your work is done. Just hit the buy button, they assign you a new car purchase customer service rep, toll free number, and in a few days you have your new car. You never left your chair.

Many people don't think about how much you can save on your interest rate by having competing financing quotes. The dealer is not the only one that can finance your new car. Online financing options like Up2Drive 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 check to pay for the car at the low rate you were given. For more information about online financing read our chapter on Car Loan Financing Tips and Scams.

New car buyers biggest mistake. You don't know your credit score?
Most people know their blood pressure and cholesterol level, but few know their own credit score. This is your most vital stat, and directly controls how high an interest rate you'll pay on your car loan. Show up at a dealer without knowing your credit report, and you might as well give them your checkbook. A car dealer should never know more about your credit than you do. Besides, you might find an error in your report preventing you from getting a loan.

"We found you a lower APR on your car loan, come down and resign the papers..."
This is the #1 new car buying complaint I get every day: A common scam is the dealer calls 2 weeks after the sale to say "financing fell through, we need more cash", and they blame some black mark on your credit history. Another twist is they lie and say "we found you a lower rate, come resign the loan papers." Their scam was mapped out when you bought the car and they printed your credit report. Most sites give your report with score for $12-$15, be sure to add the credit score option. I don't use the free government mandated credit report site because they do not give you the credit score. Most people don't know what's on their credit report, yet the car dealers have! Stop here, and Get Your Credit Report before you forget.

How to get a car loan for people with bad credit
If your credit score is below 680 and you keep getting rejected, don't submit applications everywhere that keep getting you rejected. Instead, submit one application to a bad credit auto loan resource like myAutoLoan, they have a wide array of lenders for people with various credit backgrounds. They take your application and can find you car financing from underwriters who specialize in high risk car loans. Even if you have previous bankruptcy, tax liens, or bad credit, as long as your credit score is 525 or above, and bankruptcies have been discharged, your chances are good. You should be working for at least 6 months and have no bad credit in the last 6 months. You can expect to pay more APR than someone with good credit, but this can help re-establish credit for you. After a few months of paying on time, you may be able to auto refinance to a lower APR.

Don't trade in a car you owe money on to buy a new car
What stinks about trading in a car you owe money on to buy a car is too often the dealer does not pay off your auto loan on time, they could care less about your obligations. But legally, the car loan still belongs to you until the dealer pays it off so you have to make sure that your bank gets payments on time. Many people complain to us after their new auto purchase, the dealer never paid of their auto loan, and the bank is charging them late fees. If you are make the mistake of trading in a car that you still owe money on, make them put in writing that they will pay off the car in 10 days as required by the bank. If the dealer refuses, do not do complete the deal.

Buying a car from the factory through new car dealers...
If the dealer does not have your car and options, they can order it from the factory. The car should not cost more than the cars on the lot, but some dealers fool you. It does not cost dealers more, it's ordered as part of their weekly buying. Because new car factory orders don't sit on a lot waiting to sell, they cost dealers $0 on interest. New car dealers require a deposit of $500-$1000, try not to give more than $500. Don't pay deposits by check, use a credit card only. When the car comes in and they jack the price up $1000 telling you there was "a price increase", it's easy to dispute it off your credit card. But if you paid by check, they cashed it baby, and you're stuck. There should be no fees, it's just a normal car deal. Lead time is 8 weeks to 6 months.

Don't wait until your clunker is ready to die before going to buy a car.
It takes 2 months to shop, decide, haggle, and buy a car. If your car is dying, you'll be forced into making hasty decisions and signing deals you should never have signed. Never let a dealer know you are desperate for a car. Don't dump money into fixing up a clunker, take the loss, use the cash towards the new car, and move on with your life. There's nothing I can do for you.

Rude things that you the new car buyer should NEVER do

• Don't lie about the condition of your trade in. You wouldn't like it if it happened to you.
• Don't waste the salesperson's day car shopping if you have a recent bankruptcy. You won't get auto loan approval after recent bankruptcy.
• Don't put down a deposit and try to take it back for no reason. You would not like it if they reneged on you. Research your new car purchase before you buy, not after you buy a car. Don't give a deposit no matter how much they pressure you into buying a car until you are 100% sure.
• Don't lie about your income or debt load. They run your credit report to verify it.
• Don't make an unreasonable offer without actually knowing the dealer cost.
• Don't spout off how the salesperson is making $3000 on the deal. If you're getting a super low deal, the salesperson is probably getting $100 max.
• Don't be rude when it comes to the low rebate or the ultra low APR, you either get one or the other.

Should You Buy A Car For Cash Or Finance It?
Some people say "why spend $30k cash when you can invest it and make 15% on your money and use your gains to pay the 8% APR Loan". Easier said than done. No one can guarantee you'll make money investing it, and a car is not an investment, so stop obsessing over the loss. However I subscribe to the view that you can't put a price on not having a payment. I did not have $47k to put down on my first Lexus, so I borrowed $30k and sent in extra principle payments, paying it off a year early, saving on interest. That is more financially sound than people who invested in Enron at $60.

New car buying tips for military personnel
Military personnel are scammed badly by businesses around military bases, particularly car dealers. They prey on personnel with bad credit. My research with friends in the military supports this. Sure there are local businesses that are honest, but many just take advantage of the soldiers who work so hard to protect their freedom. Tell every military person you know to read this site, as well as our other free site DebtWizards.Com which will help them clear up their bad credit themselves, and avoid all the credit doctor scams, consolidation loan scams.

Warning About New Car Dealer Advertising:
Advertisers spends millions in psychological wording research to trick you. Marketers have been lying to us for years. Why does a 2 foot long bag of potato chips have only 6" of chips in a bag blown up like a balloon? No one would buy a 6" bag of chips for $3.99. "Some settling may have occurred during shipping." Translation: Some lying may have occurred during marketing! Here's some classic examples:

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, as I knew it would. A store can't sell 30 cases of beans at 25 cents each, so they make an aisle stack with a sign that said 3 for $1 and sold out in 2 days, for 8 cents more per can! You'll be tricked into thinking you are paying less, when you are actually paying more. Advertisers rely on your brain to trick you so they don't have to lie. How about this slogan mouthwash: "Helps fight the germs that cause bad breath." Wow, you think, it will kill the germs in my mouth and I won't have bad breath! Wrong, I said it "helps kill the germs". I did not say that it actually kills the germs. If it does not hurt the process, then it helps the process, right? Therefore it helps kill the germs. It's all word games. When new dealer ads say 1.9% APR, look for the "*" (fine print). It will say "with approved credit only", or "qualified buyers only". This 1.9% reels you car buyers in, and you must have perfect credit to get a 1.9% APR auto loan. Most car buyers don't. Other new car dealer scams you may hear on the radio:

"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 $4000 For Any Trade-In!"
"Don't Make A $5000 Mistake!"
"No Reasonable Offer Will Be Refused!" (Except yours, because it's unreasonable)

In the ads above, car dealers are not doing you any favors, they want you to buy a car from them. They also want your trade in so they can give you $4,000 below market value, sell you a new car at full MSRP, then resell your trade in for a high price. Here's how the scam works: If you are upside down on your car loan and you still owe $10,000 for it, the dealer pays off your car loan, then you owe that $10,000 to the dealer. This gets financed along with your new car purchase of say, $15,000. Now you are financing 2 cars for $25,000! Did you know that? Your new car purchase payments are spread out over 60 or 72 months so you don't notice what just happened. The more months they add to the new auto loan, the lower the payments. In many cases the payments could be less than your current auto loan, so you think you're saving money when you just got shafted! Their ad made you think that trading in a car relieves you of your obligation to that car. It does not! This gets many car buyers into trouble. You are actually taking on double your current debt, when you thought you were dropping one debt for another and buying a new car. They lied to you in their ad, they are not doing you any favors, they are piling more debt onto you. They dipped you out of it and then dipped you right back into it under their umbrella of debt. Very clever trick, but now you're onto them. Next time you hear those ads, you'll know what they're up to. Trade-in buyers are the world's dumbest people and never pay attention to the back end of the deal, only the front. Here's how the new car buying ads should be worded:

"We'll Get You Out Of Your Current Lease, then roll what you owe plus penalties into your new car purchase, so you can payoff 2 cars!"

What are online new car buying sites and how do I buy a car online?
If you haven't bought a new car since 2000, everything you knew before is old school. Savvy new car buyers use online new car buying sites like Cars.com, Edmunds.com, CarWoo, MyRide.com and CarsDirect for dealer invoice pricing and new car purchase requests, to see what their car is selling for before they enter a dealer. You need at least 3 new car purchase quotes to have negotiating strength. We always point out multiple places to go, for the best competition. We review them all in chapter 2. Other useful new car loan sites you should use to get lower APR: Up2Drive. For new auto warranties the best companies are CARCHEX and Warranty Direct.

How A Car Dealer Profits From Your New Car Purchase:
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.

I'll show you how to prevent losses in these areas. Get your financing in order BEFORE you shop with Up2Drive, as shown in Chapter 1. Here's the first of many of my car buying physics formulas:

You won't be able to buy a car from ANY dealer's ad for the price they quote.^TM
Many dealers email me to say this is not so. Yes you'll find some good dealers out there who do honor their ads. But since 1997, only 2 visitors to this site have told me they were able to buy a car at the advertised price. Ignore mailings they send you, disguised to look like DMV envelopes, The NY Attorney General found they were deceptive and had the capacity to mislead consumers because they closely resembled those used by the DMV. New car dealers mailed out "scratch off cards" which stated that "You Are Definitely a Winner Of a cash award up to $1,000, a $10,000 bond or a valuable gift." Car buyers were required to bring the card to the dealership on a designated day, to be scratched off in the presence of a dealer representative. Ultimately, the only prizes actually won by consumers were a $2 cash prize, a $5 cash prize, flashlight or "consolation" prize.

You have enemies to overcome when you buy a car, the first is yourself, your ignorance, your ego, and fear of the unknown. We'll turn that into a target rich environment of opportunities for a successful new car purchase. Buy a car 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 like Houston, Texas, with 7 Nissan dealers to shop your deal around. Make your offer as shown in 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.

Don't be held hostage! Don't give them your Drivers License or Social Security number!
You'll need it to break off negotiations and leave. Many new car dealers photocopy your license before a test drive. Tell them there is no reason to. They'll say insurance requires it. Car rental agencies don't copy your license and you're taking their car for a week! Some dealers copy your license "in case you rob the salesman". Other dealers copy your license to run unauthorized credit checks on you during your test drive, still a top complaint we receive. Make copies of your license and when they ask for your license, hand them the copy, get it back when you leave. Write on the copy the dealer may NOT run a credit check on you. Remind them the FTC fines $2500 for unauthorized credit checks. Many dealers are honest and will photocopy your license on a copier at the front desk and give it right back. But some, while you're out on the test drive, run a credit check on you. Then they give your info to local banks, who run credit checks. Now you have 5-6 credit checks on your record. This will haunt you when you buy furniture and apply for credit. You'll get rejected for 5-6 checks on your credit with no credit issued. Don't give personal info until you have signed the buyer's order and are doing dealer financing. How can you tell if they ran a credit check on you? Online from Experian, TrueCredit or Equifax. You can run your own credit report as often as you like and it will not lower your credit score.

"Dave has your license, he went out to lunch. In the meantime, what can we do to make you sign?"

FTC Warns Car Dealers About Credit Checks
On 2/11/98 the Federal Trade Commission (FTC) reiterated that dealers are prohibited from getting your credit report while out on a test drive. Violators can be fined up to $2,500 under the Fair Credit Reporting Act. Credit reports may not be obtained until you approve it in writing. By running a credit check, dealers have an unfair advantage because they know your financial status, plus it lowers your credit score by about 5 points.

How The New Car Dealer Cash Flow Shell Game Works Before you buy a car, learn how dealers play what I call the Cash Flow Shell Game TM. Cash spent on buying a car pours into buckets. Which bucket type are you? We want the most for trade-ins, discounted MSRP, low APR, no extras, and few fees. Here's what you and I want: The car dealer has other plans for your new car purchase. This is what the dealer wants: The new car dealer low balls your trade-in, charges MSRP on your new car purchase, high APR on the auto loan, high profit extras, dealer prep and ad fees, with a huge profit. Somewhere in the middle you close a new car purchase deal that's mutually beneficial. If you have bad credit they'll lie and say that credit life insurance is required, get more profit, and call you 2 weeks later to tell you financing fell through, you need to come up with $2000 more. A similar abuse of your rights occurs if you're upside down on your current auto loan. If they know you're a trade-in buyer, they give you what you want for your trade-in. But look what else they do. They jack up the car buying price to MSRP, pile on extras & fees. The amount of cash involved doesn't change, it gets shuffled around the buckets. Here's a good one. They bait you with 0% or a low APR. But then they jack the price to MSRP, low ball your trade-in, and pile on fees and dealer extras. Note again that their profit is still the same large amount. Dealers perfected this system over decades. The odds are in favor of the house. Don't get me wrong, dealers have the right to be profitable. But you should know how the game is played so it can be played fairly. We hope you enjoyed the new car buying Cash Flow Shell Game, folks. When exiting the ride, remember the parking lot is moving at the same speed you are.

Click Here, Read The First Chapter on New Car Buying:
New Car Buying Guide Chapter 1:
New Car Financing Tips & Scams

You are not ready to buy a car yet, you must read the remaining chapters or you'll spend too much money buying a car. You have been warned.

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Jump to any chapter. I suggest you read each chapter in order.
Chapter 1 Get your credit report, how to get a car loan, scams, online car loans, first time car loans, budget & loan excel spreadsheets, credit repair.	Chapter 2 Reviews of internet discount car buying sites, new car prices, find dealer's invoice cost. Get a new car quote.	Chapter 3 What to bring to a dealership, what to say, how to act, what not to do, what to look for at the dealership, and a glossary of all dealer fees.	Chapter 4 How to read dealer invoices, finding dealer's cost, how much to offer the dealer, buyers offer spreadsheet, examples, trade-ins.
Chapter 5 Negotiating tips, dealer scams & tricks to watch out for, dealing with aggressive salespeople, choosing between rebates or low APR loans.	Chapter 6 Close the deal, avoid needless extras, scams in the business office, extended warranty scams, options, buying warranties online.	Chapter 7 Actual misleading dealer ads, and what to do when you've been ripped off, customer satisfaction surveys, how I bought my Lexus.

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