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Thanks misssourimule.
You convinced me!!
You have been most helpful- i had no idea that there were such cheap new cars out there.
We went and test drove the chevrolet spark today-2500 off this weekend makes it 10500 pre tax.
But we really liked the next one up the sonic in the sedan- very smooth indeed.3000 off that one this weekend so it would be 12,000 pre tax( both manual which we prefer but maybe that could affect the market we would sell to if we ever needed to??)
A little less gas efficient but our current jeep is not so suited to family needs as teh trunk is tiny and when we go on camping trips etc we pack it up and i think it would be so great to have a proper trunk that can fit more than 1 suitcase in.
But I will check out the Cruze which is only a little more- will go back tomorrow and test drive that and the spark- i only drove the sonic which was pretty nice.I know there are 'better' sedans out there like the corolla but honestly they cost more. This is a big deal for us to drop 13,000 on a car but we intednt to use it for 10-15 years. We are not the sort to trace cars in and as we will only get 5000 a year on it maybe it should stay low mileage for many years.
So misssourimule- would you really pay a couple of grand more for the cruze- do you think it is worth the extra- do you get extra ride? Would you pay more for automatic if you have always driven manual and don't intend to sell the car on for many years to come?
You have been most helpful and i always get the prize for rattling on!)
If you like to drive a manual I would buy the Chevy Cruze. It has several features that the Sonic hasn't. But I liked them both.
If you aren't gong to sell it for a long time, the transmission is not a big deal if you are happy with it. Personally, I don't think the market is that large for manual transmissions today so it is obviously a consideration.
I'm not trying to sell you on a GM product. I just know of those two and have drove them. They are both nicely styled but they don't have all the bells and whistles of more expensive cars. You can drop $40K on a new Impala but you don't need that. I don't either.
One excellent vehicle is the Honda Fit. But I don't know if the price is very negotiable. You will just need to look at it and see if it appeals to you. All the reviews have been very highly rated. But I think it will be more expensive than the Chevy models. The Honda nameplate is worth a lot of money on the market. In general, the Japanese and also the Korean nameplates are about impossible to tear up unless you really try. I like the Ford and GM lines. I don't know that much about the Chrysler line-up to render a fair opinion.
You might want to consider a Kia Soul. They are somewhat different in looks but I have driven one and are pretty highly regarded.
I don't know how deep your pockets are. If you give me a price range I might be able to further assist.
Just for the record, I drive and own a different Korean nameplate and have two new ones in my garage. Like I needed them but as I say, I don't like used cars. But each to his own.
Check out what Consumers Report has to say in its April 2013 issue. They rank all of the cars and give trouble prone areas to consider. It is not a perfect guide but will allow you to eliminate those make and models you don't want to consider. They also give a breakdown of used cars to consider in the various price ranges and used cars to avoid as well.
I may offend some here but I wouldn't consider any of the European nameplates under any circumstances. Too expensive and too expensive to repair and maintain. But they are undeniably very attractive vehicles. My 1981 Saab I purchased new was an outstanding car but they don't even make them any more. Most cars today are what one might think of as "world" cars in that they are manufactured all over the world, with different parts from different countries. The sticker on the door frame should give a breakdown of the origin of the manufacture and part content.
One final thing. After considering all of the possible candidates, look at Edmunds and do a comparison of each vehicle (up to five I believe) and you can see the specifications, wheelbase, seat space and a lot of things that will be helpful.
And one more final thing. NEVER, NEVER, NEVER make an offer on a car. Always let the dealer negotiate with himself to get his bottom line price. And don't fall for any of the shenanigans in the finance office like extended warranties and life insurance; etc. That's all a rip-off and a huge profit center. Just learn to say "NO" to each question posed.
And learn to use the internet to get what will probably be the best price offered, although the newspaper ads can be very helpful as well. Just be sure to read all of the very fine print. And call first; once you enter the showroom you are a potential customer and they won't want you to walk out of there without an effort to "earn your business." Merely tell them you have decided on a particular model with the features you want and want to know what it can be bought for bottom line price. Don't pay any significant money for documentation fees or that nonsense. When I bought my cars I paid $1 which I thought was fair. Some will give you this malarkey about state mandated fees. It's nonsense.
If you have a trade-in it is a problem in that you will never know what you really got for your car. There are two transactions involved. You buy his car; and he buys yours. But the paperwork will cloud the facts. So you need to know the cash price up front before you talk trade. Use NADA to get the value of your current vehicle. Consider "Good" as the guideline unless it is well worn.
Anything over 100,000 miles is either a "cash" car or will be auctioned. Less than that and it can be financed.
If you want to discuss incentives, let me know and I can probably help you there. Enough for now. Some probably think I have dominated this thread but I wanted to be helpful. As I have said, I love to shop for cars (and buy them), so I have picked up a few pointers along the way.
You have received great advice already, the only thing I would add when dealing with Internet sales is make sure you compare apples to apples by getting a final price to include taxes, tags, processing fee, and destination charge. You will see very quickly that some will quote you a price without any of these included (processing and destination especially) and those two alone can easily add $1K on the price depending on the dealership and manufacturer.
Could someone give some tips for those who need/want financing? I've heard that you should get a quote from someplace else, like your bank and then take that to the dealer to get them to go lower.
Here's what I'm wondering: Let's say your annual household income for three people is around $40,000 or so. You've got around $35,000 saved in the bank and the sticker price for the car is $15,500. Is it better to just take the money out of the bank and pay the dealer that way and just put $400 or so back into your bank account every month (in replace of what you would've paid through financing)? Or is it better to just buy the car with financing? If you just take the money out of your bank account, wouldn't that save you money in the long run just as long as you made sure to actually put money back in every month to replace what you took out? I'm guessing some people wouldn't be disciplined enough to do that, but if you were disciplined, wouldn't that be better? Or is there some huge downside to that? Would that be bad if the car was in an accident and got totalled?
Could someone give some tips for those who need/want financing? I've heard that you should get a quote from someplace else, like your bank and then take that to the dealer to get them to go lower.
Here's what I'm wondering: Let's say your annual household income for three people is around $40,000 or so. You've got around $35,000 saved in the bank and the sticker price for the car is $15,500. Is it better to just take the money out of the bank and pay the dealer that way and just put $400 or so back into your bank account every month (in replace of what you would've paid through financing)? Or is it better to just buy the car with financing? If you just take the money out of your bank account, wouldn't that save you money in the long run just as long as you made sure to actually put money back in every month to replace what you took out? I'm guessing some people wouldn't be disciplined enough to do that, but if you were disciplined, wouldn't that be better? Or is there some huge downside to that? Would that be bad if the car was in an accident and got totalled?
With these lower interest rates today it almost makes more sense to finance it. I expect that prices will go up in the future and with it interest rates as well.
Let's assume one got an interest rate such as we did - 2.64%. If the CPI goes up to 3%, my arithmetic tells me that I am essentially getting free money just like my 3.25% mortgage rate. I've seen 18.5% interest rates on mortgages in the 1980s.
As for as the car being totaled, as sometimes happens, our insurance company that supplies the financing automatically has "gap" insurance to cover the difference. For example say one purchases a car for $20K and has reduced the amount financed down to $17000 a year or two later and the car is totaled but deemed to have a value of $15,000 even after tough negotiations. With the gap insurance the difference is paid for with no out of pocket costs to the consumer except for the payments he made during the time of ownership.
If one puts their money into a stable index fund (one I know of only charges .18% yearly fee), if the stock market goes up substantially, that $15,500 taken from the bank account might have increased in value to $25,000 (or it could go down). However, through the power of dollar cost averaging, the steady stock buyer gets the benefit of the lower stock prices if the stock market goes down and then when it recovers the buyer has more stock shares. (One can buy shares of index funds through internet brokers as I have done.) At my station in life I'm not really investing in the stock market because I think it has probably peaked for now or close to it and my life expectancy is not that long. However, if a person of 40-45 puts steady money into the stock market it could grow exponentially to unbelievable levels. If I had known then what I know now, I would have retired quite wealthy but one doesn't get that knowledge then.
In any event, I would advise financing it and expect the interest rates to go up in the future and if the return on invested funds goes up, it would be financially advantageous not to tie up available monies in a depreciating asset.
Everyone's conventional wisdom is that we should be a debt free as possible; paying off our home mortgages, etc. That's all fine and good. But does it really make good economic sense? I'm not convinced. After all, the average home owner moves something on the order of every 5-7 years so the 30 year mortgages are in reality are just an amortization tool to get the monthly payment down to a manageable level. The houses will never be paid off in a vast majority of cases. One of the worst decisions I have personally made was to take this "extra cash" in our bank account and applying to our home at the time. It turned out that we came to want something different and meanwhile we had to dig deep to fund a new mortgage. I think having a good cash hoard is just sound money management. Don't get head over heels in debt but don't be afraid of it either. I track all of our income, expenses and income on a monthly basis so I know up to the minute exactly what we have at hand, what we owe and what we have. I use a spreadsheet so I'm not guessing.
A car is different in that it is a depreciating asset but still, if the money invested would yield more money than put into "dead money" (the car), it doesn't make sense to my way of thinking. My $0.02.
P.S. It is perfectly fine to do dealer financing if the rates are very low and the rebates are contingent on factory financing. As soon as the loan is "booked", merely go to the preferred lender and pay it off. (you can also pre-arrange this as we did) Not too far from where I live are a lot of well off people who want to take advantage of special incentives but if they pay cash the extra $1,500 incentive is not available. The obvious answer is to finance it and then pay it off. So long as the loan is "booked" it is perfectly fine. The financing guys will tell you differently but they speak with forked tongue.
Save your money. But a pre owned that just came FV a lease. Buy a three year old car that you can get a extended FACTORY warranty. Dealer tactics is to try and get you to give them a monthly okay meant number. Most people shop off if a. What can I afford per month. To know exactly what you will be laying for the car take the monthly payment nd x 60 or however many months. That gives you the cist if the vehicle. So when they say its only $20 more a month yeah it's 20x60=$1200
Go to NADA and see the true value of the vehicle you want to buy. Then send emails to the dealers and speak to the fleet manager or Internet sales if you gotta have new. Just remember you lose value as soon as you drive it off hell as soon as you sign paperwork.
Buy a 3 year old car. Get the factory warranty. The pre owned ones are good cause they have bring them to certain standards. I won't buy a new car. Let imminent see take the depreciation hit. Also don't discount used private party. You simply tell the seller that in order for you to buy you want it checked by a dealer. If they decline you walk
Good luck. Also take a friend who can help you walk away. Salesmen can be pretty persuasive in selling. I'm sure plenty f people went home with a car they never wanted and couldn't afford.
Also dont believe anything they say unless its in writing
With these lower interest rates today it almost makes more sense to finance it. I expect that prices will go up in the future and with it interest rates as well.
This. We could easily buy our next car cash comfortably but why do that when I am making more in my investments than the rates on a car loan? Especially if you take advantage of the 0% or 0.9% rate deals from some manufacturers. On a car that price, you can take out a 10K loan for 24 months and keep your savings (better yet invest) for a rainy day. Some people talk about cash, cash, cash but a savvy finance person knows it is all about making your money work for you and sometimes using cash just doesn't make sense.
Also, when you are ready to buy make sure you have a pre-approval before you head to the dealership. I normally don't talk how I am going to pay for a car until I settle on the price.
If you have a Costco membership, they have a new car buyer program. I don't suggest using the program to buy the car unless you really hate negotiating. You can still get a cheaper price if you negotiate, but you can use Costco's price to give you a baseline and start the negotiation process with the dealers.
Do you not have an older male that you can take with you? Father, Uncle, Coach, *anybody*? They will spot you coming a mile away and chew you up and spit you out.
Never buy *any* add ons such as "undercoating", "extended warranty", "rust proofing" it's just a way for them to make more money and it does NOT improve the quality of your car.
Low ball them to DEATH. Pick a number that is so absurdly low that you are almost ashamed to offer it. Get EVERYTHING in writing and SIGN NOTHING. Take their offer to another dealership and have them beat it. Never, ever, ever look excited about buying the car. Never let your enthusiasm get the best of you. Act like you really don't care about the whole thing.
Check prices in dealerships that are in smaller towns. They are more willing to negotiate, usually because they don't have the foot traffic. Check on TAX RATES before you pay the sales tax. If you live in a high tax rate town (Houston, Dallas, etc., 8%+) then see if the dealership will pay the sales tax for you in their town (if it is lower), you could save hundreds of dollars.
All right, this is a subject near and dear to my heart. I do part time delivery work for a dealership and have purchased about 65 cars in my lifetime including about 30 new ones.
The way to negotiate is to do a check of the "TrueCar" or Edmunds pricing to see what the dealer has to get out of the deal to make a profit. No business stays in business long if they don't turn a profit and pay their help.
The truth is that very little money is normally made on new car sales except to inexperienced buyers. The money comes from the sale of the used cars, service and the financing department.
There are three prices to bear in mind. Obviously there is the MRSP posted on the window. Then there is the dealer invoice. On top of that there is usually a 3% "hold-back" that is paid to the original dealer who took delivery. If there is a dealer trade it does not transfer to the new dealer although his trade will get the hold-back so it evens out, generally speaking, less the cost of picking up the trade.
Then we have the matter of incentives. Those can usually be found in various places; especially enthusiastic forums that discuss these things all the time.
I never negotiate over price. Just don't do it. Not worth my bother. What I do do is to merely ask by telephone or the internet what the price is. That is usually about the lowest unless there is a newspaper advertisement but read the fine print.
There are two transactions involved. He buys your car and you buy his car. You must separate out the two, otherwise you may just be giving your car away. Before you go in, check the used car valuations; NADA is considered the most reliable and is what the banks use. That's the value and if your car is in good shape, will be assigned the "clean" trade-in value. Very rarely will it be assigned a higher value but sometimes if it is a true jewel.
If the car has over 100,000 miles it will either be a "cash" car or will be auctioned as it can not be financed.
A new car will always have the most favorable interest rates. Right now a good rate is about 2.64% or less on a new car. If it is quoted as 0%, usually the rebate goes away but not always.
What you want to do is to simply state you are not going to make an offer. Just ask what he wants for it. If it is to your liking then you can proceed. Bear in mind any financing will throw a lot of "junk" fees on top to fleece you and you can demand they be removed and probably will if it will kill the deal. The finance manager may throw a fit but that's OK, it's your money. The last two deals I made the documentation fee was $1. I paid no other financing fee although it was financed in order to purchase it. Then I promptly went down and refinanced it at a lower rate. I actually bought two new cars in one week and got $2,500 in rebates on both of them; $5,000 both. I hate used cars.
View a car as an appliance. They are all pretty much the same today with minor exceptions. Truth is that very few could be said to be bad cars anymore. The market simply won't support a defective car as it did in past years and decades. And believe me there were some pretty pitiful cars sold years ago. And BTW, the Mazda 3 is a fine car and value.
I would go to Edmunds and compare all of the cars being considered and get all the vital statistics and options and price them out. You can and should eliminate all cars that don't meet your requirements. When you do that your choice will be easy. If you decide on "XYZ" car, call a few internet salesman that every car dealer has today with rate exceptions and ask for exactly what you want and leave out the trade at this point. When you get the number bring up the trade if you have one. Then you will know what your trade is actually worth. That's when the rubber meets the road. If you know your car is worth $10K and he offers $5K then obviously he's not the dealer to buy it from. Someone will beat it. And any dealer can service another car bought from another dealer. They don't care since they get paid the same regardless. With any luck, you'll get the first few oil changes free anyway and not many of them break so you should enjoy your new car without having to concern yourself.
Good luck.
P.S. Personally, I find the Mazda 3 as very appealing and there is a lot of car for the price especially if the rebates are substantial. There are other cars on the market that compete for it but you won't go too far wrong if you can get past its grill.
I've rattled on enough but you get the idea. Car shopping is fun if you stay in the driver's seat and know the values. It need not be hard or unpleasant. Most of the time the people you will deal with will be quite pleasant as well. They are just trying to make a living like everyone else. Some are crooks or unethical. Most are not.
Great post, and spot on!
I've done work for several dealerships, and even tried my hand at sales for a little while. You speak the truth. Not every person there will be all flowers and sunshine, but it's not the wretched den of evil and deceit that some make them out to be. It's just a business like most other legitimate regulated businesses.
Know your values beforehand so you know your lowballs and highballs from what's reasonable, and go with what's reasonable. But don't overvalue your own trade-in if it has dents, broken or stained interior parts, rust, or higher than average miles for its age--that all detracts considerably, more than some people want to accept. On the other hand, don't be afraid to say "I don't think that's very good, can you do any better?" It's just important to know what's a reasonable deal beforehand. The internet makes that part pretty easy.
If at some point, they break down and ask "what will it take?," tell them. You'll be able to do that if your homework is done. They might say "great, let's write it up!," or perhaps they say no. If that happens, it's time to go home and re-group your thoughts. Don't let them hammer you for more money. Get out of there, regroup your thoughts, and call the competition. See if they can do better. Maybe they can, maybe they can't. If they can't, then you probably had the first dealer's bottom dollar. Assuming it didn't get ugly or awkward at that dealer (and it shouldn't if they're professional about it), call them and tell them you accept their offer. Assuming there wasn't some manufacturer incentive that expired, they should be happy to help, even if it's a few day or a week later.
I've done work for several dealerships, and even tried my hand at sales for a little while. You speak the truth. Not every person there will be all flowers and sunshine, but it's not the wretched den of evil and deceit that some make them out to be. It's just a business like most other legitimate regulated businesses.
Know your values beforehand so you know your lowballs and highballs from what's reasonable, and go with what's reasonable. But don't overvalue your own trade-in if it has dents, broken or stained interior parts, rust, or higher than average miles for its age--that all detracts considerably, more than some people want to accept. On the other hand, don't be afraid to say "I don't think that's very good, can you do any better?" It's just important to know what's a reasonable deal beforehand. The internet makes that part pretty easy.
If at some point, they break down and ask "what will it take?," tell them. You'll be able to do that if your homework is done. They might say "great, let's write it up!," or perhaps they say no. If that happens, it's time to go home and re-group your thoughts. Don't let them hammer you for more money. Get out of there, regroup your thoughts, and call the competition. See if they can do better. Maybe they can, maybe they can't. If they can't, then you probably had the first dealer's bottom dollar. Assuming it didn't get ugly or awkward at that dealer (and it shouldn't if they're professional about it), call them and tell them you accept their offer. Assuming there wasn't some manufacturer incentive that expired, they should be happy to help, even if it's a few day or a week later.
Good luck.
I agree with your take and would add some more thoughts. It may sound somewhat odd but I try to act as though I may actually buy the car. I think a lot of people get the idea if they act disinterested the sales person is going to come over and overwhelm them with their personality and force the sale on them. I try to act not only interested in the car itself but that I am interested in him or her as a person. I actually try to build a friendship if that is possible. If they are very busy that may not be possible but on a slow day I might sit next to them in a chair and just shoot the breeze and pick their brains for what is going on, what's moving; things they would have a handle on.
Last edited by rmissourimule; 08-31-2013 at 07:26 PM..
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Great post, and spot on! 
