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The two previous were SPOT ON!
Also, Know that the "Invoice Price" has become just as a factory construct as "Sticker", because the dealers and factory build up the cost above Invoice with obvious and covert extras you may or may not actually have to pay.
It really is worth it to spend 15-20 man hours doing the research:
Which brand, then which model, then which major options, then the Sticker (publicly distributed "retail price"), then the Invoice (much harder to find "wholesale price"), factory and the Dealer Incentives (aka "Trunk money", or factory rebates that go to the dealer unless you discover them and insist they be applied to your bottom line), and finally after all the above, then you
Research what the above car is selling for in YOUR MARKET.
FINALLY, take the selling prices above, subtract out the Invoice Price for the car and Invoice price for your options, and subtract the dealer extra charges that are proper, such as tax & tag, (aka "documentation"), delivery, and such, while NOT subtracting dealer non-proper, rip-off charges like "prep", floor mats, gas fill up, and such.
The number you are left with is the actual profit the dealer would get. (A few years ago, for my hot, sporty car, I found anywhere from $200-800 profit seemed to be common and I felt, fair, but I saw people paying over $4,000 profit for my car).
From that, you can determine if it's a fair profit, based on the availability and local selling conditions.
Also remember. There are no laws precluding dealers from lying to your face. It's all about what's on paper. READ the fine print, do the math.
I did all the above, and I spent about 40 man hours over a week doing research and such before I got a car, options, price, and found a dealer who would find that car to sell me, with all the math visible.
And I saved $1,400 from what was commonly sold. That's $35/hour savings, to get a great deal on the exact specific car I wanted. Well Worth the work.
However, if you just can't spend that kind of time, here's one more tip.
Join a Credit Union, and use their financing. Since they are - by definition - non-profit, user-owned, they will give the best financing you can find. And some have car pricing services.
Any sites you recommend for finding the REAL invoice price and dealer incentives/factory rebates?
There are tons of sources out there and I'm not sure which one to trust at this point.
Any sites you recommend for finding the REAL invoice price and dealer incentives/factory rebates?
There are tons of sources out there and I'm not sure which one to trust at this point.
I would love to find some too. Best I've found is a GM website with all of their various discounts listed I accessed through my employer, but the current "invoice" prices don't seem to mean much now. Back in the day, I bought a minivan with a MSRP of $22K for an advertised newspaper price of $18,790. That was $200 below the invoice price that I calculated from the pricing guide books they used to sell at the grocery store magazine racks. The salesman told me they were only making about $400 on the deal selling it for $200 under invoice, and he was right since the factory holdback was about $600, which they got from Ford after the sale.
We will look into credit unions, the car I financed in my teens was through one and I got a much better APR through them.
Well, if your name was on the loan, then you are probably still a member of that credit union. You have a history with them, and as long as the car was paid of with no issues, they should be able to offer you something reasonable. Mine charges only 1/2 - 1% more than the best rates on scores under about 700 and a bit more for ones under 630 or so.
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I think you have a Costco in Columbus ??
Find a friend you can trust and ask if he/she would go with you to Costco and try to buy a car via their resources.
Just one more way to compare.
My husband and I will be going to look at cars this weekend and I was wondering what are some useful tips for people new to buying a car?
I have bought a car at a dealership before when I was in my late teens but I feel like I didn't really do a great job during that experience. I went alone and was young and impatient so I ended up paying way more than I should have. I do NOT want that to happen again...
Without getting into too much personal detail... We are rebuilding our credit currently and have already been approved for a car loan at a "high APR" (I'm still waiting on them to get back to me on that, I told them I'm not going to their dealership until I know what a "high APR" is exactly) and a $1500 down payment for a 72 month term. We plan to shop around to get the best deal though and it's our intention at this point to purchase the most car we can get within our monthly budget and pay it off within 2 years (so earlier than the loan term).
Random tip: Read up on direct injection (GDI) and carbon deposits before assuming it's a must-have newer engine technology. Fuel injected directly into the cylinders prevents the usual valve cleaning benefits of gas that normally gets sprayed along the valve body. PCV system oil catch-cans may be a good way to reduce the problem in any GDI engine.
Well, if your name was on the loan, then you are probably still a member of that credit union. You have a history with them, and as long as the car was paid of with no issues, they should be able to offer you something reasonable. Mine charges only 1/2 - 1% more than the best rates on scores under about 700 and a bit more for ones under 630 or so.
Again, good luck!
Unfortunately, the car was repossessed 2 years after purchased so I doubt they'd be willing to even consider me. In fact, due to me having a car repossessed before and being a stay at home mom, we haven't even been putting me on the applications as co-applicant.
I thought about Costco but I don't know anyone who has a membership. I did consider getting a membership just to see what kind of deals they could get us but I wasn't sure if I'd have any better success with them. So far we've had a lot of outright denials, some people asking for 30% down, and a lot of maybes.
The dealership that sold me my last car (different state than I live in now) also has a relative who owns a dealership in Columbus so we did apply there. Even though I overpaid on the car, they were able to find get me financed through a credit union when no one else would give me a chance. So maybe we'll have some success there.
Thank you for the advice, everyone. We have very poor credit so we are having trouble finding people who will give us a chance. We have bought and paid in full two cars from a buy here pay here back when our credit was so bad we couldn't even get an apartment (let alone a car) so we can definitely afford it but we have to find a bank who agrees.
We will look into credit unions, the car I financed in my teens was through one and I got a much better APR through them.
You need a course on finance and savings, something like Dave Ramsey Financial Peace University. Stay away from dealerships unless you can pay cash for your car, if you can't then it's not for you. I wouldn't be able to sleep at night knowing I have a mind-boggling debt for 72 months for a product that lost up to 40% of its value once you drove off the lot. Just think about the total amount of $$$ you'll spend after you pay the interest rate, some banker somewhere is drinking a thousand dollar bottle of champagne in your honor. Now, think what you could have in 72 months if you were to invest this amount of money even at a moderate rate of return.
To be honest if you are stretching a car loan to 72 months and only have $1500 to put down, you should not be buying a new car. It doesn't make sense from a financial standpoint.
Look at CPO vehicles. Some manufacturer warranties on CPO vehicles is even better than their new car warranties. Say you want a $25k car. Save $10k up front on the cost of the vehicle but you still get a similar warranty.
You need a course on finance and savings, something like Dave Ramsey Financial Peace University. Stay away from dealerships unless you can pay cash for your car, if you can't then it's not for you. I wouldn't be able to sleep at night knowing I have a mind-boggling debt for 72 months for a product that lost up to 40% of its value once you drove off the lot.
Good advice, the smartest thing to do would buy a used small car that gets 35-40 MPG and is cheap to insure. If you don't need to buy a car right away try to save as much as possible and write a check for it when the time comes.
Good god, one paranoid car buyer getting loads of horrible advice from a bunch of other paranoid car buyers. Please, do every car salesman you're considering talking to a favor: Get a used car loan from your credit union and buy something from a private party. That way, you'll know you aren't "overpaying".
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GDI precaution
