[CARS] Online Car Buying Tips

Category: Auto

Most people would rather go to a dentist than a car dealership. If you hate the high pressure sales people, the negotiations with the invisible but all-powerful “finance manager,” the last-minute up-sales of extended warranties, undercoatings, floor mats, etc., then you may want to get as much of your car buying done online as you can. The good news is, you actually can buy a car without setting foot in a dealership. Read on to learn how...

Oatmeal in the Radiator?

I've heard apocryphal stories about used car salesmen using oatmeal to stop a leak in the radiator of a car. I'm doubtful that a dirty trick like that would work, but there are plenty of potential gotchas when purchasing a car. You have to be careful to avoid getting taken for the proverbial ride.

For most, the first step toward car-buying is to visit your bank or credit union. Get pre-approved for a loan so you know how much you can afford to pay in total and per month. Then stick to that budget no matter what. Tip: credit unions offer much better car loan terms than banks, and it’s easy to join one.

Next, do your research, all of which can be done online. Edmunds.com is one of the best places to start; the highly respected Edmunds has refined its proprietary method of estimating actual sales prices of thousands of new and used cars since 1966. Edmunds also published detailed reports on the reliability, maintenance needs, and insurance costs of specific car models. Consumer Reports New and Used Car Reviews & Ratings is another comprehensive, trustworthy resource.

Car Buying 2016 Models

If your car-buying goal is getting better gas mileage, MPGomatic is packed with useful tips. You'll also find helpful video reviews of many of the latest models to get a point of view from behind the driver's seat, before heading off to the dealer to check out a car.

When you have the field narrowed down to two makes and models, it’s time to get a feel for market prices. Edmunds is great, as I’ve mentioned. So is Kelley Blue Book. NADA.com is another popular pricing tool; but be aware that NADA is the National Auto Dealers Association and represents dealers’ interests.

Getting a Price Quote

Now that you have a feel for what your potential car(s) should cost, you can get actual price quotes from a number of Web sites. CarsDirect.com will help you find the right car at the right price and then connect you to the Internet sales department of the dealer who has the deal. TrueCar.com will show you what others have paid for similar cars as it displays dealer offers that meet your specs.

The American Automobile Association (AAA) has an Auto Buying Program that offers to help members "get a great deal on a new or pre-owned vehicle, while avoiding the stress and hassles normally associated with buying or leasing a car." AAA refers members to participating dealers that agree to provide low, pre-set, no-haggle pricing. There's no cost for AAA members. USAA - the United Services Automobile Association - has catered to military personnel and their familes with car sales, loans, and even insurance since 1922.

It may surprise you to learn that Costco has a car-buying program that moves several hundred thousand vehicles per year, including motorcycles, boats, and RVs. Overstock.com also has a car-buying site but it’s “building a new experience for you” as of this writing.

At this point, you can actually close a deal at a firm price without ever setting foot on a car lot. But if you prefer to buy in-person (and many do), you can approach local dealers with the best deals you found online and see if they’ll match prices.

Buying a used car from a private seller can save money; Edmunds reports actual sales prices for dealers and private sellers; the latter are often significantly lower for the same car specs (make, model, year, condition, mileage, etc.). But scams are common in private auto sales, so stay on your toes.

Avoid Car Buying Scams

I have a friend who has bought several used cars on eBay, sight unseen. He does tons of research, asks lots of questions, and has even traveled over 1500 miles to close the deal. Amazingly, it's worked out well for him, but I can't recommend doing it that way.

My advice is always, ALWAYS take a private seller’s car to a mechanic of your choosing, not his, for a pre-purchase inspection. If the seller won’t agree to that, keep looking. And never take cash to a stranger’s home - or worse, a remote “storage lot” - to pay for a car. Likewise, don’t wire money to anyone. Meet in a well-lit public place, preferably where video cameras are rolling. Some police stations actually encourage people to meet in a designated part of their parking lots for transactions like this.

Get your own car history report from CARFAX or AutoCheck. Don’t try to save a few bucks by accepting the seller’s report - it may belong to a different vehicle, with the VIN number altered.

Beware of stolen vehicles. The National Insurance Crime Bureau offers a free VIN check to see if a vehicle has been reported stolen and not recovered. Also demand to see the owner’s driver’s license and registration; make sure the owner’s name is on both and that he looks like who he says he is.

Buying a car will never be fun; it’s a confusing, stressful, high-stakes game. But with online resources, much of the pain can be eliminated, and a lot of travel time. Your thoughts on this topic are welcome. Post your comment or question below...

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Most recent comments on "[CARS] Online Car Buying Tips"

Posted by:

03 Mar 2016

Your suggestion about doing your homework is good. You need to know the average price for the vehicle you want and, if applicable, the value of your trade-in. Subtracting one from the other gives you the approximate out of pocket to which you should add estimated tax/license/fees.

For example, if I determine the difference is about $15,000 I would contact several dealerships through their websites where you are usually working with fleet managers. I then tell them I am looking for the best "out the door" price and let them compete.

I learned a long time ago that getting the best price on the car alone was not enough. They can really play with the other numbers and "document prep" costs can range from a few hundred to almost 1,000 plus the dealer prep.

Posted by:

03 Mar 2016

Almost impossible to negotiate a truly beneficial deal without knowing exactly what the dealer pays for the car, plus the cost of wanted extras, and the dealer's kickback or bonuses. There is a company out there that will give you all that information on any specific vehicle in which you may be interested for about $30.

Posted by:

03 Mar 2016

There are some reputable used car companies online. Carvana is one that comes to mind and has a good reputation.

Posted by:

03 Mar 2016

I have successfully bought several good used cars on ebay from dealers. It is important that the seller has a lot of very positive feedback. Dealers with limited feedback may have started over under another name after bad reviews. I trust significant positive feedback more than the used car salesman down the street.

Posted by:

03 Mar 2016

Konrad: and that company is...?

Posted by:

Daniel wiener
03 Mar 2016

When we leased our Camry hybrid three years ago, I first looked at advertised deals in the newspapers, while recognizing that those were teasers with a lot of hidden extra costs. But it served as a starting point. I carefully researched models and packages and prices on-line, then sent out a couple of dozen emails to Toyota dealers in Southern California asking if they could meet the supposed advertised lease price with absolutely no extra cash or costs involved. Most said that price was unrealistic, but they had cars for a somewhat higher cost. A handful claimed that they could meet it. So we then visited those few dealerships. When they said that the one available car at that price was gone, or that there were extra fees and taxes and whatever, we politely told them we could get a better deal elsewhere and left. (It was enormously fun having them go through the old "Let me check with my sales manager" routine in which the sales manager couldn't quite get the price down that low but still had a great deal for us, only to have us walk away. It completely flipped the negotiating leverage.) Finally, we found a dealer who actually came extremely close to our asking price, and was willing to take our trade-in (which wasn't really worth much) to make up the difference. We left with a brand-new car, an excellent lease rate, and zero out-of-pocket cost. (Note: A lease made good sense for us, but depending on average yearly driving mileage and other factors, for many other people a purchase makes more sense.)

As an interesting addendum, a year-and-a-half after the initial lease we got an email from the dealer offering to trade in our car for a new leased car of the same model. I replied that their offer didn't make much sense, since we still had 18 months to go on our lease, but if they really wanted to make such a trade at no cost to us (zero out-of-pocket expense) then we'd be willing. They said they really did. We speculated that there must have been some dealer incentives or other special conditions to make it worth their while. Anyway, we ended up getting a newer model Camry hybrid for "free" (it actually reduced our monthly lease payment by 59 cents). That effectively extended our lease by 18 months, which we thought was great. Now I'm waiting for another such offer; we love the car, and would happily keep leasing a new one every year and a half indefinitely.

Posted by:

Robert A
03 Mar 2016

Subscribers to Consumer Reports magazine are offered a new-car buying program, that, for a relatively small fee, will provide readers with a comparison pricing list of dealer cost vs. manufacturer's suggested retail price (MSRP) for the most popular vehicle brands. (High end luxury brands such as Bentley, Rolls-Royce, Lamborghini, Ferrari and Aston Martin, among others, are not available through the program.)

For any given make and model, Consumer Reports will tell you the dealer cost, which is usually the same to all authorized dealers of a particular brand, as well as the wholesale price of all option packages and dealer installed accessories. The prospective buyer can get a total cost of a car or truck, and then add on what he/she feels is a reasonable profit for the dealer, rather than working down from a MSRP window sticker price. Consumer Reports will also put you in touch with certain local dealers who will work with CRs pricing service.

Anyone who works for a car company generally gets the employee "A-Plan" pricing, which is the best possible discount off of the MSRP. But most automakers also offer a second tier pricing program for close relatives of the employee, such as parents, grandparents, adult children and siblings. Although not as substantial as an employee plan, these plans also offer a buyer a substantial discount from the MSRP.

A third tier, usually called a "Friends and Family" offers a smaller discount to more distant relatives (uncles, aunts, cousins and grandchildren, etc.)or close friends and neighbors. All of these plans offer a fixed, one-price, no-dicker deal to the buyer. It certainly may be worth it to see if you can qualify for one of these plans, if you know an employee of an auto manufacturer.

Posted by:

04 Mar 2016

Bob: You made a big mistake. You start out by talking about getting financing. If you can't afford to pay cash for the car you want, then you have no business buying that car. Why do you think so many Americans are one paycheck away from bankruptcy/homelessness?

Buying an older but reliable car is not anything to be ashamed of. Using all the ideas you suggest to get a good price is fine, but you're missing the forest for the trees if you buy something at a good price that you really can't afford.

Posted by:

04 Mar 2016

The car business is an ungodly business. During 20 years in the custom van conversion business I bought hundreds of empty shell vans and sold thousands of conversions to dealers. Seen the business from both sides.

The internet has become the great equalizer. It's not hard to find a good deal on a new car once the dealer knows that you have done your homework. The the dealing all hinges on your trade. The used cars are the profit center at most dealerships. You never know what the dealer has in his used car. If you shop your car to some of the bigger used car dealerships, the ones that make you an offer that's good for a few days, you will have a better idea what your car is worth. Tip - it's seldom worth what you think. You can sometimes get a better deal at the end of the month, if the dealer is behind his projections or maybe competing with another dealer. There are so many elements. Don't ever think that just because they gave you a good deal last time that they will this time-doesn't happen that way.

Willy, you were a little harsh on Bob, don't see a mistake. Dave Ramsey says to never buy a new vehicle. But if everyone took his advice there wouldn't be any used cars for people to buy. Car mfg would go out of business then you wouldn't even be able to get parts for the used cars. But that's not going to happen. There will always be people spending their future.

What Bob was pointing out is that the worst mistakes made in a dealership happen in the finance office. By the way, the finance manager is usually the highest paid on the sales staff. Have your financing lined up before you go looking. Sometimes the dealership has some good rates, but usually the credit unions beat them. And for crying out loud, read the sales document. What the credit manager tells you it says and what it actually says are not always the same! Never leave the dealership with a vehicle unless the deal is final.

And this lying works both ways. The customer is not always honest about his trade or credit.

The last sales manager I had a dealing with I had to remind him, after listening to him crying about having to make some money, that his job was to get the most money possible for his product--mine was to get it for the least possible amount. His dealership advertised they would beat anybody's deal. I beat his deal by $500 and he wouldn't budge.

One last thought, I prefer to buy outright and sell my trade. This is not always convient for everyone, in which case I would consider selling, my trade, to one of the larger used car dealers. I usually get my money's worth by driving it out of the vehicle.

Posted by:

04 Mar 2016

When buying a used car, watch out for cars that have been in a flood and simply cleaned up for resale. Especially true if there has been a hurricane in recent months.

Posted by:

06 Mar 2016

I wouldn't dismiss eBay so readily. In fact I'm more likely to trust a private seller than a dealer on eBay. Three of the best automotive deals of my life came via eBay. Here in Ontario though, many sellers have started listing with no reserve and then cancelling the listing at the last minute if it doesn't go high enough.
Another option might be local auction groups on Facebook. My current driver was found that way. Around here they tend to be 24 hour auctions with no reserves allowed. Makes for the occasional great deal.

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