Buying a Car Using the Web

I wrote this piece for a national magazine a few months ago and thought you'd like to see it. Using this method, I purchased two cars in the past few years at just a couple hundred dollars over the dealership's TRUE cost -- pretty good results.

The next time you’re shopping for that new family car, try using the Internet. It’s a great way to get a good deal, hassle-free. Here’s how:

• Do your research – Head online to www.edmunds.com to review the myriad of cars available today.  Consider your needs and budget (including gas and insurance) to find the size car you can afford. Check the site for well-rated vehicles that meet your needs.  Also review all the options for the two or three cars that seem to be the best choices for you, noting what each model has available and its prices.

• Go offline awhile — Go to the dealerships and test-drive your top few contenders, seeing how you like the driving experience of each.  Then, when you’re back home, consider this experience with the information you’ve gathered off the web, and pick your favorite.

• Get information—Go back to www.edmunds.com and enter in your potential car and options. You’ll get an estimate of the dealer’s invoice price (his cost) as well as the True Market Value (TMV), the average amount others in your town paid for the car.  If you can beat the TMV, you know you’ve gotten a good deal.

• Get the inside scoop—Order a cost report on the car you want at www.ConsumerReports.org. (Cost: $12) This information will verify the Edmunds data and also reveal any dealer incentives (rebates manufacturers pay dealers to sell a car).  If the dealer receives $500 for selling your car, for example, his cost is $500 less than the listed invoice price.

• Identify potential dealers—Search the web for dealerships in your area.  The best way to locate all your options is to go to www.google.com and search for the car model (i.e. “Chevrolet”), your city (i.e. “Nashville Tennessee”) and the word “dealership”. This should give you a choice of several options.  Record an e-mail address for each one.  Get at least four to six of them within a 100-mile radius of your home.

• E-mail them all—Develop a standard e-mail message that tells who you are and details of the car you want. Tell them you’d like to know their price for such a car and that they should respond back by e-mail. All your negotiation will be by e-mail so you can avoid the hassle of negotiating in person.

• Go back and forth—As they e-mail you back, keep asking the higher-priced dealers if they can do better. Let them know in a subtle way that they are not the cheapest and are in danger of losing your business. They’ll lower their prices, and by this time you should be below the TMV.

• Keep lowering the price—As the bidding starts to slow, let them know that you are aware of their costs (including incentives), and offer them a price that allows them to make a couple hundred dollars (with incentives added in). Most dealers will take this deal, especially if it’s at the end of a month and they need to hit a sales quota.

• Keep them honest—As you near an agreement price, don’t let them throw in extras like advertising fees, special charges, or anything else other than taxes and delivery (which everyone pays).

• Make the deal—Print out your e-mails and bring them to your closing to be sure you get the agreed upon price. Buy your car!

Buying a family car doesn’t need to be intimidating, painful or costly.  Just do your research online, take your time, and get the car you need for the best price possible.

Comments

[LivingAlmostLarge]

Was this for a new or used car?

[FMF]

I bought two new cars using this method.

[Brian Smith]

That was very interesting, thank you! I'm totally in the dark when it comes to cars and I currently own a Saturn. One of the nice things about buying that brand is that the price is fixed; no negotiating. This appealed to me because I knew I'd walk out of the dealership without feeling I'd been fooled into paying more than I should. This is nice, of course, if (a) you like Saturns and (b) you want to buy a brand new car. My next car may or may not be Saturn, but it certainly won't be brand new and your information will be very helpful when it comes time to go shopping...online, of course :)

[beef]

I bought a new car with this method and it worked for me. Sticker price was 24k and got the car for 16.3k. Before the 1k and 2k rebate, I was just under TMV. The dealorships don't lose money on the rebates, the car manufacturer does.

[RR]

What do you think about the Costco car buying program? Can it compete with your method?

[FMF]

RR --

That's a good question. I'm not sure which would work better. I think I see a post on the subject coming... ;-)

[wannacar]

I would like to purchase a new nissan altima 2.5s, the models with sunroof is 24K. I also qualify for a supplier discount, which says I get to see the dealer invoice. Which I haven't been shown. Then if they did show it, I'm afraid I'm not seeing the real deal.
I have always had my father do the dealing for me. I want to do this myself. What kind of asking price should I start at?

[FMF]

Wannacar --

See the post above. You can get all the info on the dealer's actual costs from Consumer Reports. From there, you can decide how much you should offer them.

[Jaxon]

You simply have to be able say 'no, thanks at that price' at least once to the dealer. This gives them a strong message that you are serious about your research.