How We Saved Thousands Buying A New Car

Thursday, December 17, 2015 0 No tags Permalink 0

Our lease was coming to an end, and we knew it was time to invest in a new car. We live in a part of Chicago that is not super easily accessible through public transit, and we were ready to make an investment in a car that would serve our family for years to come.

Now what?

We started by making a list of all the features we wanted, then looked at the safety records and recommendations of all the cars that fit our descriptions. There was also the question of whether to buy something new or used.

We decided to get an Acura RDX due to the AWD, safety record, size, and all around great reviews. We fell in love with some of the technical features available only in the 2016 model — like blind spot monitoring, lane assist, and an Acura app that connected to the car which is why we opted for new rather than used.

Once we got the basics down of what model year, interior and exterior features, and packages we wanted, we began to employ the method outlined in this amazing post on how to buy a new car, written by a mentor of mine,Jason Heltzer.

I made a spreadsheet of all the dealerships nearby — around 7 — and copy and pasted links for each car we liked through their website. This is really important so you don’t have to waste time by going through the sales process. You may not realize this, but dealers list their inventory on websites, down to the VIN number of each car. Knowing the inventory is a great negotiating tactic. For example, if I know a dealer has a lot of one type of car in a certain color, they may be more willing to negotiate on price.

With my handy spreadsheet filled out, I contacted each dealership with the following email — (you can get contact info on the websites)

Hi — I’m running a reverse auction today on the {insert car, model, features, color, and year.} I have secured financing/am paying by check and am ready to make a purchase today. I will pick the dealership that gives me the lowest price. What is the best price your dealership can give me? Please give me the total, all inclusive number.

Screen Shot 2016-05-17 at 4.14.21 PMNow, let’s break it down:

  • You include every detail about that car. I even included the link to the specific car on their website when I emailed.
  • You do not give them the opportunity to offer financing (a bargaining chip).
  • You indicate you are ready to buy today.
  • You ask for the total, all in price. This is REALLY important. We noticed that dealers were very hesitant to send a written price, and would say things like “We’ll beat your lowest offer by $500.” That is a giant red flag: as soon as they get you down to the dealership, they can start running sales tactics. You must get the final price in writing before you go to the dealership. More on this later.

The variety of responses was really interesting. Not only was there a discrepancy in the price quoted (the delta was around $3k), but there was also a discrepancy in the tactics employed over email. One dealership had an “internet sales manager” who did not fool around. Clearly he was there to deal with buyers like us: he gave us a price upfront, and was extremely straightforward in his communication.

Other dealers emphasized coming down to the lot and scheduling a test drive before giving a number. Some didn’t even give a number at all!

It was time to do some follow-up and more importantly, pin the dealers against each other. Having all the prices in a spreadsheet, the next day my husband called all of them to feel them out and finalize the prices.

He definitely got a sense for who wanted to play ball and negotiate versus who didn’t play games. We got offers down below the initial quotes, and finally one dealer gave us a number that the other dealers said “You should take that one.”

That’s when you know you’ve hit the bottom (and there is a bottom). Once dealers started dropping out, we knew we had a good deal on our hands. There remained a couple of dealers who said they would beat our price if “we came on down to the lot” but we knew from previous research that this was a scam.

The final step in making sure we got a good deal also came from Jason’s post. He said to tell the dealer:

“I am writing one check for the exact amount before I leave my house. I need to know all the taxes, fees, exact price etc. before I leave. If what I owe you is any different, I am marching out of your dealership with Twitter, Facebook and Yelp a’blazing telling people about my bad experience. So this number better be right.”

So that’s what we did. I took one check to the dealer, and everything turned out perfect.

In the end, the hardest part was actually choosing the car. This process took just over one day, and it literally saved us thousands of dollars. Previously, everyone in my family would just go to a dealership and negotiate on the spot. After reading this amazing Edmunds post on the secret life of car salesmen, we knew this approach would be much more transparent and effective.

And it was.

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