New car buying guide
1. The cardinal rule: Be firm. Always. An example: When you visit a dealer to look at a car, sit in it, test the headroom, test drive, etc. and then leave, they’re going to pressure you to make an offer then and there. Don’t. This is but one example but there are many along the process and if you’re not firm, you’ll waste your time.
2. Get the name of 4-5 dealers within a 50 mile radius from you.
3. Decide what car you are going to buy, down to the trim level & options as much as you can. Only you know what you can live with or without. Do as much research as you can from the car review sites. Test drive at any dealer you choose but leave as soon as you’re done. Thank them and tell them you’ll email them with your offer when you’re ready. BE FIRM!
4. Decide on a few acceptable colors. There’s more than a good chance that the dealer willing to give you the best price might not have the exact color you want. Again, decide on how important this is to you and work accordingly.
5. Go to http://amexnetwork.zag.com and enter your car model & zip code on the left side for new car. Select your options and price it out. Click on the bell curve looking graph that’s labeled “See what others really paid.” You’ll get a pop that looks like the picture below. This part only works on Flash enabled devices so sorry, no iPhones/iPads. I’ve found this is the BEST site for new car values. I’ve compared these prices to Edmunds’ True Market Value, CarDirect, ec. and they’re all significantly higher. You do not need to be an American Express member to use this site.
6. Average the Factory Invoice price and the Dealer Cost price. This will be the price you will offer and pay for the car. No more, no less. Your only adjustments will be to move up or down accordingly if certain options are not specifically available on the car a dealer might have on their lot.
7. Go to your bank or credit union and arrange your own financing and get pre-approved based on the value you get in step #6 (add to that tax & licensing fees). DO NOT GO THROUGH THE DEALER FOR FINANCING UNLESS THEY HAVE A RIDICULOUS OFFER (like 0% for 60 months or something). I got 1.79% on a 60 month term through my credit union. If your credit is only so so, you should still go this route. The bank/credit union you have an existing relationship with will almost always give you better rates than the dealer. If you’re paying cash, even better.
8. Wait until the last day of the month. Better yet, last day of the quarter. Email the dealers in your area with vehicles that closely match your criteria. Make them an offer on the price you got in Step #6 + tax/license. Tell them you have your own financing (or cash) and can close the deal quickly. Make sure you say in your email that you are emailing several dealers with the same offer. Tell them that you’ve done your research and know what the true cost to them are and that your offer is lower than the so called “factory invoice” but that’s your price. Tell them all you require is a “YES” or “NO” that they can do a deal at your price and that you will not accept any counteroffers from the dealer and that there’s no working with you on the price. Don’t be afraid to talk to them but repeat the mantra. You only need a Yes or No and you’ll move on. You won’t work with them, you won’t take counteroffers, you don’t care that it’s below the “factory invoice”… it’s simply can they sell the car to you at that price or not. That’s it.
9. When the responses come in, you can decide what your favorite colors are from the YES and go from there. Say no to GAP, extended maintenance, dealer security system, LoJack, under body coating and all that crap. Tell them you have very little time to do the paperwork and watch how fast they can go… it does not need to be a half day ordeal.