How to Buy a Car the Same Way You Would Buy a Big Screen TV

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The following is a guest post from Find the Best Car Price. For additional perspective, see my thoughts on buying a car.

If you’re reading this blog, you’re most likely not the type of person that would walk into Best Buy and buy a big screen on the spot for $2500.  Instead, you would look at the TV’s, pick out the beautiful 55inch Samsung LCD and write down the model number.  Then you’d go home and type it into google product search to find 30 different online retailers and ultimately have it shipped to your home for only $1500.  That same strategy can and should be applied to buying a new car.

Rather than going to a car dealership and getting a single price from one car dealer, you should get prices from multiple dealers and make them compete with one another.  Here’s how to do it:

Step 1:  Get Several Car Price Quotes

After you’ve done a few test drives and figured out exactly what you want, go home!  Use a free online car quote service and put in a request to have multiple car dealers email you offers.  After submitting a request you should get several responses within 24 hours.

Step 2: Compare Apples to Apples

The first responses from these quote services will certainly not be the best price.  Sometimes they may not give you a price at all, just contact information. Do not be concerned.  It may take a few emails back and forth, but you should be able get several prices for a specific model.  Once you get enough quotes, organize them so that you can compare apples to apples.  You want to make sure to compare the exact same make/model/trim/equipment package to really understand which price is best. It’s easiest if you put them all in a spreadsheet.

Step 3: Negotiate

After you've lined up your initial quotes, email each of the dealers and make them compete against each other.  Start with the dealer that gave you the highest price and ask him to beat your best price.  Work your way through all of the dealers until you get a price that makes you happy. 

Step 4: Close the Deal

When you have the final price in writing (email is sufficient) make sure it includes the VIN number of your new car and arrange an appointment to close the deal. You won’t need to actually purchase the car online.  But if you know what you want, you should be able to come to terms on a great price via email and then go to the dealership with everything pre-arranged.

Comments

[Evan]

I just did this for my wife's leased car (gasp a leased car lol).

I got a deal - a starting point, and then called a ton of dealers within a 15 mile radius of my house (it was a nissan and I live in NY so there are a lot lol) and told them the deal and said can you beat it...yes or no?

A lot wouldn't commit on the phone they got crossed off, and most couldn't beat it. I am happy with my deal because I couldn't get it lower!

[billyjobob]

Sounds like good a good method to me.

@Evan ....Leasing?...you bad boy ;-)

[Bobbert]

Sounds good, but who buys a TV this way?

[BillV]

@Bobbert
You and me both. I can't imagine buying a 2500 TV online. I guess folk do it. What do they do for servicing? Can anyone share their experience?

I prefer to buy an item like this from a store I trust even if it means I don't get rock bottom price. I prefer quality stores. In came in handy for me. My first large screen bought 4 years ago--Mitsubishi DLP had problems from day 1. (And the store folks set it up) After the 4th visit from a technician, the store mamager said something like: "Looks like you got a lemon, let's just exchange it". They did. It has worked fine. Alas, Twitter is no more.

[David]

Sounds great if you don't value your personal time, or are retired and don't have enough hobbies. Otherwise, join Costco or, if you love to haggle, go online, get the actual dealer cost, and go haggle with one or two dealers armed with the knowledge of what their bottom line has to be.

[J.P.]

I agree that this is a huge expense in time. I would recommend buying the Consumer Reports price report (which is more complete than edmunds.com, which is also a great resource), and using that number as the basis for negotiation. Then at least your e-mails can start with your offer rather than their made-up price. Too, I agree with BillV that buying from a credible, reliable source is worth a little more than rock-bottom pricing. Play it right and you get both.

[texashaze]

I just bought a new truck 2 weeks ago. After getting some quotes in person I decided to get a quote through the dealers via email and WOW, what a difference. It's important to let them know you are serious and will be buying in the next couple of days. Emailing led to quotes far less than those given in person. Several dealerships bid with me this way until I got the best price. Afterwards I asked why they would give a better price via email. They said that an internet buyer has often highly researched the car and it's all about the price. If they give too high a price then they lose the deal so they always go rock bottom just to get the volume in sales. My truck (2010 Ford F150 crew cab XLT w/extras like chrome package) stickered for $36k and I bought it for $26k plus they threw in leather seats for free. This was just over the price for 1 and 2 year used trucks on the resale market in my area.

[Budgeting in the Fun Stuff]

I bought our $1200 Phillips Magnavox LCD TV online during a Thanksgiving week special and it's been working great for 3+ years...

Good advice on car buying. Knowing what you're willing to pay will save you thousands of dollars.

[T.A.]

I purchased a new car in 2007 doing just this. My comparison price was the so-called "no haggle" price available from the likes of Costco and AAA. I saved some $2,600 compared to those Costco/AAA prices, which were already discounted. A few observations:

1) I can only assume that whoever wrote that somehow this is a huge time commitment doesn't realize how much of a commitment it is to drive around to several dealerships and think you'll do better. If you do this right, you're only visiting ONE dealership, and that's just to do the paperwork.

2) I would make two alterations to the author's recommendation as written. In Step 2, you have to get dealers to give you an all inclusive quote to drive it off the lot. Dealers think that car buyers just want to bragg about discounts below MSRP, so that's what they'll dangle if you let them. The problem with a price $X below MSRP or over dealer invoice is the double-secret sucker fee they tack on at the bottom of the invoice. Tell them you don't care about anything but the bottom line and not to bother impressing you with line item discounts.

3) In my approach there was no negotiation, really, not in my experience. Tell them up front what you're doing and that you don't intend to haggle, just to buy from the lowest bidder. One third will balk or won't reply and two-thirds will. For the ones who replied, the prices were great and nobody budged from their initial response, even when I told them they were underbid.

3) Two other things surprised me. 1) One guy actually tried to argue that the lowest price -- remember, this was the all inclusive price, calculated to the penny -- wasn't necessarily the "best price." He knowingly implied that there was some other, secret definition of "best price" that he knew and I didn't. Guess he showed me. 2) Before visiting the dealer who quoted the best price, I called a dealership close to my home (a dealer who never replied to my initial e-mail) to see if they'd match my best price. Over the phone they said they would and invited me in. When I visited they TWICE tried to bait/switch me with the paperwork. First they asked me to sign an invoice with a higher price, and then they asked me to acknowledge the options on a separate sheet, which was a blank sheet of paper. After I made them correct both, they gave up and gave it to me for a few dollars less than I asked.

4) This approach is generally described well in Chapter 1 of Bruce Bueno de Mesquita's book, "The Predictioneer's Game." Bueno de Mesquita has been using this approach for decades, according to him. There is also a website out there, called Fighting Chance, that will sell you very thorough details on every aspect of this process, including what to do with trade-ins, financing, leases, etc., for less than $40. Small potatoes when you'll likely save several grand.

[P. Dris...]

I did something similar when I bought my wife's car, but a little more underhanded. I went to the internet dealer and was asking if they had the corolla in the color my wife wanted. They did not, but a dealer 8 miles away did. I told him I was going to double his "mini" (a mini is the minimum amount a salesmen gets when he sells a car and is what the dealership pays the salesman if there is no/not much profit on the sale) if he gives me a printed quote for the lowest he has ever seen the car sold for. He did, and I went down the street where they sold me the car for $200.00 less then the quote plus 4 free oil changes. Everyone was happy. This was also about $3,500.00 less then the lowest price I was able to get a floor salesmen to quote me.

Internet and leverage is the way to go.

[Joe]

FLAW...

Except there are NO INVOICE prices for TVs, Milk and clothing... LOL