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Hagerty
Hagerty Employee

8 steps to buying a new car without getting ripped off

Meet Joe Schreiber. He's just like you, an automotive enthusiast who wants the most bang for his buck. He's been everything from a jail guard to an amateur boxer to a teacher of high-school special education: all character-building endeavors that led to him become a gifted lawyer and writer.
https://www.hagerty.com/media/buying-and-selling/8-steps-to-buying-a-new-car-without-getting-ripped-...
76 REPLIES 76
kyree-williams
Detailer

Bob Howard CJDR recently built a standalone store for the Jeep products that looks pretty upscale.
Sajeev
Community Manager

I am pretty sure that between their pricing strategy and the capitol spent on that Jeep store, BH CJDR has a lot of fans in Auburn Hills. 

jeffzekas
Intermediate Driver

Here in Oregon, Subaru dealers are asking $8,000 to $10,000 over MSRP which means I'm keeping my old car!
CitationMan
Gearhead

I just got a dealer email and one of the tag lines was “Some models available with no market adjustment!”
LOL
Gary_Bechtold
Specialist

Translation: We can't find a sucker for these vehicles. How's sticker sound to you?

JayUtah
Pit Crew

Are you a sucker for buying gas when the price goes up?
JayUtah
Pit Crew

Do you laugh at the grocery store when milk goes up in price?
JayUtah
Pit Crew

Good for you
MustangJim
Technician

Good points Sajeev! I think that the biggest problem people have buying a car is that they are not prepared. Weather ordering as Joe did ( mostly necessary now) or buying off inventory do homework. Build your own so many time that you know every option, package and color. Find what you want online, know what you will pay and then find a dealer that has what you want ( or willing to order it ) at the price that is fair for both buyer and seller. Personally I have done it wrong so many times, I finally got it right the last time. Thankfully because the local dealer that I normally go to had no inventory so I just did it on my own and got so much of a better deal that I'll never go back to the local dealer.
Sajeev
Community Manager

I am glad to hear you searched out other dealers and got a better deal too! You just don't hear stories like yours very often on the Internet. 

MustangJim
Technician

My timing was perfect for once.  February of 21 and I found an overstocked dealer.  I wish I was able to time the stock market like that !

hyperv6
Racer

I have always preached do your home work since the web arrived. 

#1 know what you want. Don’t go to buy till you know just what you want vehicle wise and option wise. 

#2 drive it enough to to know if you like it or it fits your needs. Too many never test drive or just go around the block. Many dealers will let you take a vehicle home over night. 

#3 know what to pay. Many web sites are available today with the price range in specific zip codes being paid. 

#4 use the web yo find what you want. 

#5 utilize dealer trades. Now is not a good time but with inventories up it is a good tool. 

#6 go with your financing. 

#7 know the fees you should or should not pay. 

#8 know your trade value and do not say you have a trade or special offers like money back card money on new cars. 

#9 expect that if the air bag ever has gone off the dealer will refuse the trade no matter the car condition. 

#10 the most important thing do not get emotional on any car. The sales staff can use that against you. They build new vehicles every day. If they do not come to a reasonable price wait. You can get another car found or built. 

#11 if things stall walk. 

#12 take advantage of cash back cards. My GM cards average $1500 to $3000 off a new purchase. Use them to buy gas and pay them off monthly and it is free money. 

I have averaged $6k to 8k off each of my new vehicles but one right up till last July. My father taught me well on  how to deal. 

I hate to deal but I do love the feel of when you know you did get the goal price you set when you go in. 

I cringe at sone of the deals I see people make or see them complain on the web about how a vehicle drives after they buy. It drove like that before you bought it. 

 

Most people fail as they do not keep their emotions in check and or fail to do the home work. 

 

Sajeev
Community Manager

#6 is great, although I must say that in my experience a dealer's F&I manager has always beat the rate given to my referrals by their bank/credit unions. It's likely worth letting them try to beat it. 

 

#12 is a fantastic point, something I shoulda added to the article...but it assumes the buyer is loyal to a specific brand. 

DougL
Detailer

I agree about dealer financing. I have gone in with financing in place but the dealer has always been able to beat the rate I arranged.
bradfa
Advanced Driver

I hadn't ever taken advantage of dealer trades (your number 5) until I bought my current Colorado. The exact configuration I wanted was a 2 hour drive away and my local Chevy dealer did a trade with the dealer who had it and went and got the truck for me. When I took possession of it there were about 220 miles on the odometer (it had been traded between dealers once before, too) and my GM warranty info says the warranty starts with the odometer reading at time of sale (which I had never realized) so I still had the full warranty duration and mileage.

One other piece of advice if buying off the lot or doing a dealer trade that I employed this time, especially if you have a trade-in, was to set a "best case" total cost after trade-in that you really want to get but might be impossible and a "reasonable" total cost after trade-in where you walk if the dealer can't hit but you buy if they can. My negotiations were pretty quick, about 5 minutes total, and I ended up slightly better than my "reasonable" total cost number, which I had previously told myself would be my own personal line where I should be happy at the price. This had a huge impact on my mental state as I gave myself a really easy out to walk away if needed and I didn't feel like I had gotten ripped off as they did in fact beat my number. From start to finish of my negotiations the total cost after trade-in moved about 8% in my favor but I stayed very calm because I had my numbers which I decided before the negotiations started. Don't buy a car while emotional, you'll just feel bad afterwards.

The dealer beat my credit union's finance rate through another local bank by 0.5% so I took their financing.
Tim
Technician

Regarding #12, I don't think saving money on a vehicle-branded credit card is necessarily the best way to go. Typically, the cash back to be applied a new vehicle purchase is based on 1% cash back. I accumulate 5% on specialty categories, 4% on gas, 3% on restaurants and travel and 2% on everything else. All of the above in cash, not points. That's cash that can be taken to any dealership to buy any car (if I wanted) rather than one specific brand.
Tinkerah
Engineer

I chuckle at the card offers that scream "50,000 free points for new members!" Only in the microprint do they admit a point is $0.001 or some such token, only valid for that specific airline, motorcycle brand or whatever.
audiobycarmine
Technician

Confession first: I have never owned a new car and never plan to.

Now, I’m no conspiracy-theorist, but I also know that many business practices are more than just mercenary, they’re predatory. Carnivorous Capitalism, if you will.
Auto sales probably the most.

I have known FAR too many decent, innocent folks who bought a new car because they thought “Well, at least there’s a guarantee and the dealer HAS to be the expert...” Oh they’re expert, alright.
In the true-life experiences of all those new-car purchasers I’ve known, their satisfaction with pretty much every post-purchase dealer interaction was a resounding negative. ESPECIALLY when service and repairs were involved.

If a dealer’s Service Department is really “factory-trained”, and they basically ONLY HAVE TO WORK ON ONE BRAND; then why is the quality of that work so often subpar? They certainly SHOULD be the experts, right?

I’ve often said that the only way I’ll buy a new car is if I’ve bought the dealership first.
I still feel that way.
Tinkerah
Engineer

What's discouraging is that all your acquaintances went against any recommendations if they even asked, and dismissed the widely known stereotype of dealers to go and get burned.
CitationMan
Gearhead

My Dad, one of the nicest guys in the world, but a really great negotiator, used to use me and my brother very effectively as props at the dealer. We would be sitting obediently in the dealer’s office while my Dad negotiated with the salesman. The salesman would eventually push the piece of paper with the car price across the desk towards my Dad. If the number was bad, he would look down at the paper in disgust, glance dismissively at the salesman, and not say a word. Dad would just turn to us and say “Boys, it’s time to leave”. We would all get up, make a commotion moving chairs and start to walk out as the stunned salesman would sputter something and try get us to stay. Dad would stop at the office door, look back at the salesman and say, “Do you have a number that will make me stay?” Then a quick, “And don’t waste my time”. I learned from the master.
surfdrifter
Pit Crew

I must have missed a lot of things in this article as it pertains to metro Washington DC vehicle dealers. No dealership, none, zip, zero, nada is selling anything for dealer invoice. A buyer pays sticker or an inflated markup over sticker - - something that I've never witnessed in 35 years of purchasing new vehicles. What is this author referring to when he infers that a buyer today, May 2022, can purchase a new vehicle at dealer invoice?? Because reality sure isn't that.

Then there's the other reality these days: I've been trying to purchase four new Ford Transit 250 cargo vans for my business. It's been 6 months. Still no ETA available from F or dealership. F has instructed dealerships to cease taking orders for 2022 - - have to order for 2023.

Here in metro DC there are a lot of customers & there's a lot of money. No deal is selling at anything less than sticker.
Sajeev
Community Manager

Invoice pricing in this case is a statement of fact (not an inference) as verified by both the buyer and seller. And it isn't an isolated instance. Not only did my friend Joe get a new Durango at invoice, the dealership's General Manager insists he isn't the only person getting that deal. 

 

DC must be a tough region for buyers these days, I'd recommend doing a multi-state search and budgeting for some shipping costs. 

mfp4073
Advanced Driver

I am inclined to agree with you! Its not just in your area either. The only exceptions for buying a vehicle with some kind of a price reduction are. Certain models (witch is very few), some areas, and the timing. Timing may be the biggest factor. It is in my area where almost everything has a dealer mark up above sticker.

surfdrifter
Pit Crew

edit, pardon me:
No dealership, none, zip, zero, nada is selling anything for LESS THAN dealer invoice
FloridaMarty
Instructor

You obviously haven't successfully purchased a new car without overpaying. Yes, you can pay below invoice. There are many reason it's possible, floor plan, holdbacks, manufacturer incentives to dealers. Rebates from auto finance company/banks. Dealers have 100 ways to make money at the time of your sale, not all revenues come directly from you.
Motorpsycho
Intermediate Driver

Beware the phony "invoice". Some stealers have an official looking document they claim is the invoice, when they actually paid far less. There are websites that can tell you approximately how much tge dealer really paid. Factor that into a "fair offer".
uweschmidt
Instructor

very true worked for a dealer where everything was phony also believe that all car dealers that charge more then $50 $60 documentary Fee are Outright CROOKS when in our part of the world registering a new vehicle with the provincial authority is no more then that
surfdrifter
Pit Crew

Less than sticker. Ok I give up. All the best ! 🙂
Sajeev
Community Manager

Tim
Technician

I'm waiting for my vehicle to be produced. In this market of up to $15K over list for the vehicle I have on order, I'd rather wait than over-pay. In a year or two, markets will return to balance and those who overpaid will be upside-down for the life of their loan. Meanwhile, I have a discount off MSRP locked in on my infamously-backordered vehicle. 🙂
FloridaMarty
Instructor

My son wanted a new Rav-4, and I helped him shop here in Jacksonville Florida. The local Toyota dealers weren't any help and prices were way over MSRP. Inventory was limited. He wasn't in a hurry, as this was going to be a 2nd car for him. I suggested he start shopping out of state, even with the travel or shipping costs, it might still be cheaper than locally. He did, and found a great dealer, and deal in North Carolina. He flew up in the morning and drove back down the same day, with his new vehicle. He paid well below the local Toyota dealers, in fact, he paid below sticker. I told him to focus on the bottom line, but still review the deal. No surprises, no funny business. The catch was he told them what he wanted and what he wanted to pay, and he would wait as long as needed for the car. In about 90 days, he took delivery. The dealer treated him so well, the whole extended family is considering buying from that same out of state Toyota dealer in the future. The local dealer will most likely loose out on many future sales. Makes you think...

dooscoop32
Detailer

My son recently purchased a new fully loaded 2022 Ford F-150 pickup. It was a $70k vehicle. He claimed to have done his homework ahead of time. But he told me that between the current shortage of vehicles and his buying a high-demand vehicle, the dealer told him the bottom line was they would sell it to him for $7500 over sticker.

Then the salesman said if he didn't want that deal, there were plenty of others who would.

Sadly, I believe in this instant-gratification society in which we live, that was probably true.
Trhinehart
New Driver

Wow, how times have really changed. I bought a 2020 Ram Longhorn in February of 2020
and the sticker was about $70k and with all the rebates back then the dealer allowed me
$13k in rebates. I don't see new car sales ever going back to the way they were, imho.
GoFaster
Intermediate Driver

I'm sick of playing the game. I put down a deposit on a RAV4 back in February to get a place in line. I was told that this particular dealer will sell at MSRP with no add-ons, which is a good thing. But, I am just about ready to pay someone their extra markup just to get the vehicle. It's just a big game. And, the dealer web sites are never up to date. A dealer can list an inventory of 5-7 vehicles and the actual inventory is 0.
Classicbird
New Driver

What has worked for me. Last car I bought (18 months ago) I researched the vehicle with options including checking the cost of the vehicle to the dealer. Walked in with a printed" Offer to Purchase", binding until I left the dealership, and a check. Told the dealer I was paying cash, no trade in and refusing to pay the supposed "legally required documentation fee" (no such requirement in KY). Sales manager said they could not sell for that price, Told my wife it was time to leave and we started to walk out. Sales manager followed us out to the car asking where we were going. I politely told him he said he couldn't sell the car at that price and I was taking him at his word but we wouldn't pay a penny more. Sales manager asked us to wait a minute, checked with someone and came back and accepted my Offer to Purchase and check. He said he had been selling cars for over 20 years and no one ever walked in with a "Offer to Purchase" before. Actually pretty easy. Do your research, figure the tax and registration fees, determine as close as you can the wholesale cost of the vehicle to the dealer, check for incintives manufacturers are giving dealers and then determine iwhat you are willing to give the dealer for profit. Be reasonable. The dealers must make some profit to stay in business. Dealers respect serious buyers and generally will not turn down a realistic offer.
cslandry
Intermediate Driver

I've done essentially the same thing, but without a written document. This for a 1-year-old car from a dealer. I told them "This is the bottom line of what I will pay for this car. You can list all the BS fees you want, but it needs to add up to my bottom line." Told them I was leaving when they didn't agree - then they changed their mind. Worked great. You do need to do your research and be reasonable.
drhino
Technician

I don’t see anything about a test drive in this article, Sajeev. I always narrow my choice down to a couple of cars; and test drive each to see which drives better. Then I get dealer invoice price and trade in numbers from Edmunds, et al— and make a deal from there. At least this was my method in the past. I have walked out of plenty of dealerships when the numbers didn’t work.
Sajeev
Community Manager

He didn't test drive one, but it shouldn't be too hard to get behind the wheel of a Durango like the good old days. Good luck test driving something like a Ford Maverick, though. 

drhino
Technician

No way I would ever buy something without driving it first. If none are available for a test drive— it would be off the list.
autowriter
Detailer

My wife wanted a 2018 Volt Premier. Hard to find those but did find one at a local dealer (different brand), even in the color she wanted, with <25,000 miles. Wandered in to discuss buying it - cash straight up. No discussion -- the asking price was The price, but hey -- they might discuss a trade-in on her well-maintained Rav4. No thanks. Well then, we can offer you this Great deal on financing? We were just offering money, nothing else. So the attitude changed and got somewhat surly. Finally the salestwerp came back to give us the Good News -- our offer was accepted. And obtw, here is a list of other stuff that the car "really should have" in order to make the deal worthwhile. Extended 3-year dealer warranty. No. Special finish protection. No. The thing that nearly made us walk away was $150 on the list, ostensibly involving a "tax" on the sale for $150. I brought the statute up on my smart phone, and showed him where it said that the alleged tax May Not be charged to the customer. He went back to the "sales manager" and came back with a form that was back to our original price with nothing else added. The $8,000 charges for all those Needed Extras disappeared. Then we got passed over to the Closer. He offered us a 5-year extended warranty "that only I can offer -- those guys on the floor can't." No thanks. He got surly then too. When it came time to make the purchase, he called a "service" that would pre-clear the check. They wouldn't OK it. Odd -- there was about $20,000 more in that account than would be required to cover the purchase. So I called my local credit union, got a manager on the phone who then assured him that the check would clear. Again, nearly walked out on the deal. When we left, my wife said "I feel dirty" after getting everything signed off. But it was the car she wanted, so I said just buy it and we won't be dealing with them ever again. I did send a complaint letter to the state consumer fraud people noting the addition of the "tax" to the purchase, and wondering whether this practice had been going on for some time. Copy to the owner of the mega-dealer. My wife likes the car well enough. Fits her driving needs perfectly, gives good performance and is comfortable and economical so far. We will Not have anything good to say about the local dealer any time soon. If ever.
Tinkerah
Engineer

It's all those deceitful hard sell tactics that perpetuate the evil dealer stereotype.
autowriter
Detailer

My best advice is simple: Don't start to buy a car, new or used, when you Need a car. Puts too much pressure on. Do your research ahead of time and keep your eyes open for a deal. If a really good one comes along, jump on it.
Gary_Bechtold
Specialist

#1 If you can I would recommend also not being so in love with one vehicle that you aren't open to a better priced, etc. Plan B. Like buying a Frontier instead of a Tacoma because they are sitting at the lots while the Tacoma's have Dealer Adjustments on them. Granted if you want some limited production, soon to be gone model well then not much you can do about that then.

#2 Check a buying program, like through a Costco or something like the Car Pro Show, etc. and see what is available out the through those programs.
Sajeev
Community Manager

That's a big no to #2...all they do is take their cut/commission out of the money you could be saving if you do all the steps yourself. Go straight to the source (well not in person, just online). 

Gary_Bechtold
Specialist

The Costco program gave my Dad cash on his Hyundai towards the vehicle at the time.  Things may be different but it really depends on the program.  I used a program which discounted a Subaru I had about $3500 under sticker.  I realize in 2022 things may be different but it is worth checking the overall price out the door you get.  It could be worth it. 

 

The best thing I have found is an honest salesman at an honest dealer who wants your business and knows that if you treat the customer well a customer will return.

 

Sajeev
Community Manager

Programs make life easier, and when you factor in time-value of money, maybe its the right move. I am very confident you would have gotten the same Subaru for hundreds less if you removed middleman from your transaction.

 

Nobody works for free in the car business, unless its someone like me. 

Tinkerah
Engineer

They pay you in glory then eh? 😉
MARK400
Detailer

Ah yes..... car dealerships......( especially used vehicles ) are right behind most lawyers and politicians in people who may not have your best interest at heart. Bottom line......do your homework and have an experienced buyer (father, brother, gear head, etc.) help you with advice. And as they say...........Caveat emptor.
kht60025
New Driver

Never go to CarMax they give you pennies on the dollar. I've had a lot of friends and myself go to them they give you way below even the wholesale price. Also never ever tell them that you're financing until you've got the price agreed upon. If you're paying cash you're you're going to pay more for the car because they make money on the financing. I played the whole game with the dealer about financing and checking credit Union and their financing prices and when we agreed to a price I went to the finance office and we started writing thinking stop and then I dropped the bombshell I said oh I'm going to pay cash. You should see his face of the finance manager I thought I hit the floor he said of 100 car sales maybe six people pay cash