How to Buy a New Car
How not to be driven insane by carsalesman
Recently I purchased a new Mazda CX-5. The entire process of deciding on a car, test driving, and dealing with dealers can be very exhausting and often frustrating. Read about my dealings with a Ford dealership in my blog post Gas Holes*. I decided it was important to share my learned knowledge and lessons learned, “With great power comes great responsibility.”
After my purchase I realized that the process of buying a new car doesn’t have to be maddening and there are many things you the shopper can do to give yourself the best possible position when buying a car. I have outlined a 9 step process that should keep you sane, and help you to get the best car for you.
- Establish an email account
- Create a phone number
- Decide what you can spend
- Go to Carmax
- Research, research research cars
- Visit the dealers
- Compare online
- Re-visit the dealer
- Buy the car at a the best price
Step 1: Establish a new email account
Through out this entire process every website and every car dealer will want your email address. I recommend creating a new account for a few reasons. First you most likely don’t want to receive the tons of junk email that you will be receiving once you start this process. The second and most important reason is that you will receiving a lot of email and sometimes it will go to your junk mail or get lost in the other emails that you receive. Creating a new email allows you to keep all the car emails together. Choose what ever email service you like Yahoo! Mail, Outlook.com, Gmail etc.
Step 2: Create a phone number
The moment you submit any form online containing your phone number your phones will start ringing. I had submitted forms to Ford, and within 10 minutes my phone was called by five different dealers. I didn’t do this step, but really wish I had. There are many services that will provide you with a free virtual phone number. This will allow you to submit a number, pass it out to dealers, whom ever and never worry about the onslaught of calls that you will receive. DO NOT SKIP THIS STEP! Some services to check out are Google Voice, Libon, or Voxox. Here is a site describing many of the free phone number services.
Step 3: Decided What You Can Spend
Car dealers will gladly sell you any car. They don’t care if you can actually write the check or not. They will work with you to get financing if you need it, take your trade even if it’s worthless, and smile the whole time they are sending you to the poor house. If you are financing please review your monthly budget and decide how much extra money you can dedicate towards a car payment.
“You and only you can truly know how much you can afford.”
If you plan on financing your new car it is important to understand that you have a few options, and that’s a good thing. You will want to know what are the rates offered to understand what kind of car you might be able to afford. Rates can differ from institution to institution. Call your bank, call banks, and investigate joining a credit union. USAA has extensive car buying services if you are a member. Car companies may also VERY competitive rates so don’t forget to check the manufacture sites.
Step 4: Go to Carmax
I recommend to go to Carmax to find out what you can get for your car if you are planning on trading it in or selling it. Carmax makes it very easy to get a non binding offer to buy my car, and that way when I shop for a car I know that the minimum I will take for my trade is the Carmax price. Carmax is in many states, check locations, but if there isn’t one near you you can find out what your car is worth online by going to Kelly Blue Book. You will be able to determine a ball park price depending on the condition, and miles. The price will differ if you are trading it in or selling it yourself. You will get more money if you sell it yourself, but I personally don’t enjoy the headache. I would also suggest when you fill out the form on KBB be very critical. I know the old gal served you well and would make a wonderful car for someone, but the dealer looks at it and takes note of every scratch, stain, leak, etc.
Step 5: Research, research research
By now you should have an idea of how much money you can spend on your new car. There are tons of websites that provide information about cars. The two main avenues to go down are first the manufactures, and then the comparison sites. The fact is you can’t simply go to one site and get all the information you will need and go buy a car. Well I guess you could, but you certainly won’t get the best deal.
There are many many many websites about cars. I have listed a few below, but feel free to Google the type or model of car you are thinking about to find more info. I have also found it very helpful to watch video reviews of models on Youtube.
If you find that you want to submit your email address and/or phone number to any website be sure to use to use the new email and phone number you created in steps 1 and 2.
During your research you should decide what type of vehicle and features you would like. The manufactures websites are the best for comparing trim levels of every car they sell. They also allow you to build your car to find out a suggested price. It is important to keep in mind that the some of the car features you want though technically available won’t be on the car you buy. Some of these options can only be added at the factory. Most dealers carry the most popular options. I wanted my CX-5 to come with a factory installed tow hitch. I could not find a any trim level that came shipped with that feature even though the Mazda site says it’s available.
Once you decided on a few cars it is helpful to visit a site like Edmunds to compare the technical specs of each car. I found it was very useful because I could quickly identify which had more legroom and cargo capacity.
The manufactures site will tell you the Manufactures Suggested Retail Price, MSRP. This is only a suggested price, and is usually higher than you will actually spend. Try TrueCar.com. TrueCar allows you to create the car of your dreams and find a dealer to sell you the car at that price. The service isn’t bad, but it might not be the best deal. I suggest you visit the site for all the details on the site works.
For example the Mazda I bought had these prices:
MSRP: $30,225
TrueCar: $29,935
Dealer Quote: $28,309
My final price: $27,809 ($2,416 saving from MSRP)
Great websites:
For fuel economy: FuelEconomy
For pricing: TrueCar
For trade-in values: Kelly Blue Book
For side-by-side comparisons: Edmunds
Step 6: Visit the dealers
If this is your first time every buying a car you are in for a world of emotions. It should be very exciting and fun to buy a new car, but most of the time it is a long process with lots of twists and turns that will leave you exhausted.
If you were contacted by a dealer that says they have the exact car you are looking for, or decided to spend the day test driving cars it’s time to visit the dealer. Keep in mind that there always is another dealer selling the car you are looking for so don’t feel you have to by the car you see that day or from that dealer. Repeat this mantra in your head. This is important because it is easy to get swept up into the sales process once you get going:
“I am not buying a car today, I am buying a car today, I am not buying a car today.”
Even if the dealer told you they had your dream car in stock be sure to clarify what exactly you are looking for in your new car. I found time and time again that they had a new car they wanted to sell me but they never had the car I was actually looking to buy. All dealers will request a copy of your license for you to test drive a car. This is totally normal, but make sure you ask for it back immediately if it’s not returned.
Once in the car take it for a test drive. Drive around town, and on the highway. If the salesperson won’t let you take it on the highway, simply say ok, finish the test drive, say thank you and leave the dealership. There is no reason why you can’t test a car on the highway.
After completing the test drive the salesperson will turn to you and say “so what do you think?” It’s ok to be honest. Tell them what you liked or didn’t like. They may be able to show you how to fix the issue or find a different trim level that may fix the issue. I also find that if I am not interested I try to end the conversation ASAP so that I don’t have to get in to the salesperson’s selling process. I always respectfully thank the salesperson, and ask for their card.
Step 7: Compare Online
By now you hopefully have an idea of a few cars you are interested in. I find it useful to go back to Edmunds and compare the specs of the cars. For me it was fuel economy, rear legroom, and cargo space. I also watched a ton of reviews on Youtube. Taking all this research and mixing my personal opinions based on the test drives I was able to narrow my decision to two. I was able to narrow my choices down to the Mazda CX-5 and the Ford Escape. Both cars offered everything I needed and wanted.
Step 8: Re-vist the Dealer
Prior to returning to the dealer I emailed the two dealers I was dealing with and said I wanted to come in for a final test drive. I made an appointment and asked to have the exact car ready. I had an idea of what the cost of the car would be, and I knew I would be financing using Mazda Credit. My family and I went back to the dealers for the Mazda and the Ford for a final test drive. This was my car but they had to feel comfortable as well. I put my kids’ car seats in, and checked the legroom. My wife drove both cars and really liked the Mazda more. We were ready to buy.
Step 9: Buy the Car at a the Best Price
Based on my research in Step 5 I knew the price of a Mazda CX-5 with the trim level and options I wanted would be around $28k.
- We reviewed the sales worksheet for my new car
- We talked about any incentives offered by Mazda. In my case it was $500 loyalty cash.
- I showed the salesperson my Carmax offer for my trade. I really wanted to trade the car in and not sell the car to Carmax because of a state tax credit. This could give me a bit more cash towards my purchase. Many states offer this, does yours? The gladly matched the Carmax price.
- I also had brought printed out prices that were listed on competitor websites.
We took the lowest price I found online, deducted the $500 and my tax credit, and landed on the price $27,809, a $2,416 saving from the MSRP from Mazda.
Deal is done!
This is not a perfect science. There are 6,718 books on Amazon on how to buy a car. I hope these steps help you to get the right car for the right price. Please leave any tips you have in the comments. Good luck!
To read more of my rants check out https://medium.com/@andrewjb44 or follow me on Twitter @andrewjb44.
