QuickOverview

It is a lot of fun to drive off the lot with your own brand new car. However, the process of buying that car can be absolute torture. Auto dealers deserve to make a profit in their business as much as the next guy, but their tactics can be infuriating to consumers.

This guide will help you take some easy steps to get the car you want for a fair price while minimizing frustration. Don't be in a hurry to buy your car. It is best to have about a one month time frame.

Decide What You Want

Initially, you will need to decide on not only the make and model of your car, but also on the options. Start by going online or to the library. Review your needs and which cars match those needs (size, power, options, capabilities, etc.) Consumer Reports is classically a great guide. Car and Driver magazine will also give you a different perspective. Don't go to a dealer before at least having some idea of what you are looking for because they are experts of convincing you that what they have in stock is exactly what you are looking for.

Take Test Drives

At this point, you probably have a few different makes of cars on your list that you are interested in checking out. Go to the appropriate dealers and ask them to test drive the cars and see how they feel. Make sure they understand that you are just starting and that you don't intend to buy on that day. They will tell you stories about a car that will probably not last past today that they can give you an incredible deal on. Ignore their offers. Refuse to talk money on the first visit.

Do get a brochure on the car and understand all the options packages. Take a look inside others with the bells and whistles you might be interested in like leather seats, high end stereo equipment, GPS navigation, etc.

The dealers are trained to make you wait, because statistics show that they longer you stay there the more likely you are to buy a car. Avoid sitting down and waiting for them to look for something. If they can't take you on a test drive quickly, be prepared to go to another dealer.

It is a good idea to set aside an entire day for your test drives since it can be time consuming going from dealer to dealer. Start early on a Saturday to avoid crowds as much as possible.

Decide on the Car

After your research and test drives, decide on the car you want. At this point, you may wish to do more research, or take more test drives, if you don't feel ready to decide on the car.

It is very important to be sure of and write down the exact options you are looking for in a car. The dealers are experts of "apples and oranges" selling, meaning that they will try to beat a price of a car with another car that has cheaper options. Remember that dealers can always order the exact car you want from the factory and that option should not be more expensive than selling you a car from their lot. Cars are very expensive, and you should insist on getting exactly what you want.

Research the Price

Don't pay any attention to the sticker price you see at the dealer, otherwise known as the MSRP, or Manufacturer's Suggested Retail Price. It is important for you to find out what the Dealer's Invoice price is for the exact car you want. That is the price that includes all of the dealer's costs. A great source for getting the dealer's invoice price for your new car is the Kelley Blue Book. Pay very close attention to make sure you configure the options properly. Don't look at the retail price, but rather at the invoice price.

It is useful to look at a deal based on how much above the dealer's invoice price you are getting, depending on how popular your car is, when in the model year it is, and how many of them exist in stock. If the car has been manufactured in sufficient quantities, which is almost always the case with rare exceptions, you should be able to get a price that is $500 over dealer's invoice or below. If you find yourself at the end of a model year and buying a car that may not be the most popular, you might want to shoot for getting the car under the dealer's invoice.

Be sure to understand the factory incentives in place for your car because that will lower dealer's invoice. For example, if your $30,000 MSRP car has a Dealer's Invoice price of $25,000, but the factory is giving the $1,500 leather option for free, you should figure that the Dealer's Invoice price is $23,500. In this case, make your target price about $24,000.

Get Online Quotes

The car buying services on the internet generally give great prices over email with no haggling. This author has bought his last three cars that way and has never had a dealer beat an internet price. Use services like Auto By Tel and Carpoint and configure the exact car you are looking for. Wait a couple of days to get all the quotes.

Compare the quotes to the Dealer's Invoice price and make sure they are close.

See Who Can Beat the Lowest Price

At this time, you need to decide if you are willing to bend slightly to get a car that is in stock. Depending on your preferable options, they may have exactly what you want, or you may need to get a different color or an extra or missing option. It is easier to stick to exactly what you want and to make the dealer order it, but if you want to be flexible, make sure you understand the incremental costs of all the options so you can make real apples to apples comparisons.

Print out your internet quotes, and start doing some phone work. Auto brokers can sometimes get great deals so they might be worth calling. They charge a flat fee and have great negotiating power. Before signing a contract an auto broker, make them commit in writing that they can offer you a better price than the lowest offer you received. Don't pay an auto broker until you pick up the car.

Call the dealers where you test drove the car. They deserve a chance to earn your business since they took the time for the test drive. Tell them the price on the phone and have them check with the sales manager if they can beat the price and by how much. Tell them that you are willing to go buy the car if they can beat it. Tell them if they can't quote a lower price on the phone, you will buy it elsewhere. Stand tough.

Only go back to a dealer when you know their best price. Often times, you will find that the internet quotes you received are the best price. Those are usually from dealers that are somewhat near by so go ahead and buy from them.

Financing and Leasing

It is recommended that you only discuss financing after you agree on the best price. And leasing for the most part, is not a good deal for consumers.

Unless the factory is offering a special financing deal with very low interest rates, you can probably get a better deal with your local bank or better yet your credit union. Usually, the dealers can offer you temporary financing that will give you some time to secure the proper financing for yourself. Make sure you have your final financing solution figured out before you sign on the dotted line.

Now buckle up and don't drive too fast!

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