New Car Buying Question (1 Viewer)

[Vrana]

I've never purchased a new car before. The only car I have purchased was a private sale, so I've never actually been to a dealership.

I know what car I want to buy, and I know what kind of offer I'm going to make. I've done a ton of research, so I feel very confident in that aspect. What I don't clearly understand is how the process works.

I've been approved for a loan from my bank (Bank of America, in case that matters) for an amount GREATER than what I think this actual car will cost me. I asked for a bit more money than I thought I would need, just in case something weird happens and I go for a different vehicle or choose a different package. It's not a LOT more than what I expect to spend, but it is some.

What do I actually do when I am ready to purchase the car and have an amount worked out with the dealer? I have an approval letter from my bank, but I am not planning on buying from one of their "preferred dealers". Do I just give the dealership my approval letter and they will take care of it?

Also, what do I need to actually drive away in the vehicle that day? Will the dealership take care of the registration while I am there? I'm assuming I'll still have to go to the registration place to transfer my license plate, right?

I've done a lot of research into the actual car and what is a fair price, I'm just worried that I don't understand how the process is actually going to work after I agree to purchase the car. Any help or tips would be appreciated.

 

[eoMMan]

Chances are that the dealership's interest rate will be better than BOA on a new car.

 

[avoiding injuries]

The price is the only complicated thing. The dealership will take care of the rest, and if it's a new car, their rates will most likely be better than what your bank or credit union can offer.

Be careful of the add-ons they try to sell you in the finance office.

I assume you used trucar.com to assist in the offer?

 

[Dan Lambskin]

Only thing you should need to do is contact your insurance company to make the switch...you'll need the new car VIN though...dealership should handle the rest

Also not sure on the pre-approval route you are going but the dealership should be able to access multiple lenders to find you the best rate

 

[ClownCausedChaos2]

Do NOT show them or mention the approval letter, especially if you were approved for more than you really want to spend. Make the deal first. They do not need to know ahead of time that you have been approved or for how much. If they know that, you'll never get a price below it.

And all registration, plates, etc. can be handled at the dealership. If they have the car on the lot and you decide to purchase it, if its not filthy, there's a good chance you could drive it home right then amd there.

Also, be prepared to pay more than you make the deal for, because there is tax on the car, registration fees, and they'll probably charge you some sort of BS destination charge.

They will also try to get you to buy additional/extended warranties. I'm in the camp of never buying anything beyond standadd warranty on anything, so I would advise against that. New cars these days seem to seldom have problems.

Have fun with the experience! Remember, you hold the cash and the final decision is yours! Don't let them talk you into anything that you're unsure of. Be patient. If you don't feel comfortable with what they're offering, there's another dealership in the next town over who may be more willing.

Good luck!

 

[DropKick]

Lots of good advice already but DO NOT have "walking out today with a new car" as your objective. I can't think of a worse way to get the best deal.

Somebody mentioned trucar.com, which is a great suggestion to understand a good and realistic price. Once you know the car (I mean exactly "the car" - trim line, options, etc.) and the price your willing to pay, be ready to "walk" if they can't meet the price.

Have options in mind... They'll probably ask what other cars you're looking at - be ready to name one of their competitors. Or, tell them you're going to check out other dealerships... anything to avoid giving them the leverage.

 

[Juxtatarot]

I've been approved for a loan from my bank (Bank of America, in case that matters) for an amount GREATER than what I think this actual car will cost me. I asked for a bit more money than I thought I would need, just in case something weird happens and I go for a different vehicle or choose a different package. It's not a LOT more than what I expect to spend, but it is some.

What do I actually do when I am ready to purchase the car and have an amount worked out with the dealer? I have an approval letter from my bank, but I am not planning on buying from one of their "preferred dealers". Do I just give the dealership my approval letter and they will take care of it?

Also, what do I need to actually drive away in the vehicle that day? Will the dealership take care of the registration while I am there? I'm assuming I'll still have to go to the registration place to transfer my license plate, right?

I've done a lot of research into the actual car and what is a fair price, I'm just worried that I don't understand how the process is actually going to work after I agree to purchase the car. Any help or tips would be appreciated.

Call Bank of America and ask about the financing logistics. I suspect the preferred dealerships can generate the BoA paperwork for you to sign right there at the dealership. For the other dealers, you might have to involved in getting a purchase order to BoA and perhaps signing papers at a branch.

How much shopping around did you do for financing? I'd also look into rates at a local credit union and maybe even getting preapproved there too. Also, there is a good chance the dealer can beat any rate that you can find on your own.

Do NOT show them or mention the approval letter, especially if you were approved for more than you really want to spend. Make the deal first. They do not need to know ahead of time that you have been approved or for how much. If they know that, you'll never get a price below it.

<snip>

Remember, you hold the cash and the final decision is yours! Don't let them talk you into anything that you're unsure of. Be patient. If you don't feel comfortable with what they're offering, there's another dealership in the next town over who may be more willing.

Good luck!

Showing the approval letter is no big deal. People just have to know what they want and be able tell the dealership no. I agree with the last part, though. It the first dealership doesn't give him the deal he wants, he should be willing to walk out. (And you can always go back later!)

Vrana, another bit of advice is to try to keep the purchase price negotiations completely separate that the financing discussions. Dealerships will often try to merge to two, focus on a monthly payment and that's where they can screw you. You have done your research, get the fair price. After that's agreed upon, you have your own financing. Only go with theirs if it beats yours.

 

[BlackHole]

I personally negotiate assertively when buying a new vehicle. My dad literally buys a new truck almost every year for work (tax reasons). I know the game well.

Now is a great time to buy, if you understand your position. Your single deal is not the main motivator. The entire sales team is linked to each other with different bonus programs. End of month (the entire sales force from the top down is always close to the next tier of bonus' and more willing to make less on your deal). End of year. Same as end of month, just larger incentive to the higher level sales/finance team. And the mother of them all, right after Xmas. THEY are more motivated right now then at almost any time of year to sale, sale, sale.

My bottom line suggestion for you though is this:

Go through On Line sales force. They are easy to work with, not face to face (less pressure for a rookie buyer and none of the slaes games you'd face in person). You can take your time, use Edmunds.com, trucar.com, etc to check on everything they are offering you, without the immediate pressure felt at a dealership. In your position, and most peoples, this is the route that will be your best experience and get you the best price. Once the deal is landed on, it is not binding for you, but no car dealership will back out of an agreed upon price from their on line sales team. Most will even have an expiration time period on the offer they give you.

you then set a time to go in and see/drive the vehicle. If you don't like it, you are not obligated to purchase. If you do, then pay what you agreed on On-line and nothing more. If they try and "bump" you with extras in the finance/paperwork process just continue to stick with your statement of no thanks and you have an agreed upon price and that is all you are paying today. You can even tell them to please stop trying to bump you or you will walk out and go to Joe Smith's Chevrolet instead of this Chevrolet. They will stop for sure at that.

Good luck. Again, I promise you On Line is the way for you to do this.

 

[[icon]]

What add ons are legit and need to be added on? Which can you reasonably tell them to F-off on?

 

[BlackHole]

I've been approved for a loan from my bank (Bank of America, in case that matters) for an amount GREATER than what I think this actual car will cost me. I asked for a bit more money than I thought I would need, just in case something weird happens and I go for a different vehicle or choose a different package. It's not a LOT more than what I expect to spend, but it is some.

What do I actually do when I am ready to purchase the car and have an amount worked out with the dealer? I have an approval letter from my bank, but I am not planning on buying from one of their "preferred dealers". Do I just give the dealership my approval letter and they will take care of it?

Also, what do I need to actually drive away in the vehicle that day? Will the dealership take care of the registration while I am there? I'm assuming I'll still have to go to the registration place to transfer my license plate, right?

I've done a lot of research into the actual car and what is a fair price, I'm just worried that I don't understand how the process is actually going to work after I agree to purchase the car. Any help or tips would be appreciated.

Call Bank of America and ask about the financing logistics. I suspect the preferred dealerships can generate the BoA paperwork for you to sign right there at the dealership. For the other dealers, you might have to involved in getting a purchase order to BoA and perhaps signing papers at a branch.

How much shopping around did you do for financing? I'd also look into rates at a local credit union and maybe even getting preapproved there too. Also, there is a good chance the dealer can beat any rate that you can find on your own.

Do NOT show them or mention the approval letter, especially if you were approved for more than you really want to spend. Make the deal first. They do not need to know ahead of time that you have been approved or for how much. If they know that, you'll never get a price below it.

<snip>

Remember, you hold the cash and the final decision is yours! Don't let them talk you into anything that you're unsure of. Be patient. If you don't feel comfortable with what they're offering, there's another dealership in the next town over who may be more willing.

Good luck!

Showing the approval letter is no big deal. People just have to know what they want and be able tell the dealership no. I agree with the last part, though. It the first dealership doesn't give him the deal he wants, he should be willing to walk out. (And you can always go back later!)

Vrana, another bit of advice is to try to keep the purchase price negotiations completely separate that the financing discussions. Dealerships will often try to merge to two, focus on a monthly payment and that's where they can screw you. You have done your research, get the fair price. After that's agreed upon, you have your own financing. Only go with theirs if it beats yours.

Good point. The only thing they need to do is apply the interest rate to the $$$ and length of time on the loan and tell you the monthly payment plan. You want nothing more to do with this person(s) offers. Make them stay on track with this.

 

[BlackHole]

What add ons are legit and need to be added on? Which can you reasonably tell them to F-off on?

I live in NorCal. So almost none. Anything I want/need I will have in the "package" I've selected with my vehicle. If for some reason I didn't get leather seats, I will get the protection plan for the interior (3 kids and I will use this warranty, plus the seats really do clean up much easier/better) I

f you deal with more severe weather, the undercoating, etc might be a good option, but I don't have the experience with those type of needs to advise. Edmunds is a good source for this research also.

 

[eoMMan]

And DO NOT walk around the dealership with a raging hard on. Trust me. This isn't a good look and could result in a worse deal for you.

 

[Vrana]

Thanks for the tips guys. I received in insanely low interest rate from BOA (I have pretty good credit), but is there any harm in letting them run my credit and seeing if they can possibly match or even offer a lower interest rate?

I appreciate all the advice. I feel very confident in my research and ability to get them to my price (or else I'll walk and head to a different dealership), I'm just anxious about everything else that goes with it.

 

[ClownCausedChaos2]

Thanks for the tips guys. I received in insanely low interest rate from BOA (I have pretty good credit), but is there any harm in letting them run my credit and seeing if they can possibly match or even offer a lower interest rate?

I appreciate all the advice. I feel very confident in my research and ability to get them to my price (or else I'll walk and head to a different dealership), I'm just anxious about everything else that goes with it.

Nope, no harm in having them run it. It may nick your credit a little if you have every car dealership in town run a check, but a dealership or two (or three) isn't going to hurt. The credit bureaus expect that when you're shopping for a car.

 

[shadyridr]

Thanks for the tips guys. I received in insanely low interest rate from BOA (I have pretty good credit), but is there any harm in letting them run my credit and seeing if they can possibly match or even offer a lower interest rate?

I appreciate all the advice. I feel very confident in my research and ability to get them to my price (or else I'll walk and head to a different dealership), I'm just anxious about everything else that goes with it.

what car are you looking at? You can usually tell the special financing offers right on the company website. Its not some big secret.

 

[Judge Smails]

You'd be surprised re interest rates. I have a FBG worthy FICO score and got a very low pre-approved rate when shopping for my used car. But once I settled on the price and told them I had a pre-approved rate for the loan sure enough they beat it.

As for the comment earlier about saying that you are going to buy a car today being the worst strategy possible, I respectfully disagree. Maybe it's different with a new car, but I knew the exact year/model/color/mileage range/option package I wanted for my daughter's car, then called the Internet fleet managers from the 3 dealers in a 100 mile radius and told them I am buying a car today from one of 3 dealers (mentioned their top competitor). Told them I wanted to know their best price if I drove down and bought the car now. One dropped several thousand from their previous "best, drastically discounted" price. So much has to do with how long the car has been on the lot, bonuses/contests, etc.

Just ignore all of the upsells.

 

[[icon]]

Check out penfed.org for rates too...

 

[Ed Wood]

Good luck. Again, I promise you On Line is the way for you to do this.

This. Let the internet do the dirty work for you. I bought a new car in 2007. Knew exactly what I wanted (Civic EX). Didn't have a trade to complicate things. Emailed all Honda dealers within a 150-mile radius of where I live. Told them what I wanted. Said make your offer by such and such a date. Took an offer that was a little higher than the best because it was the local guy and didn't feel like making the road trip to buy.

Next time, I'll do the same thing but when the offers are in I'll send another round of emails to those with the best three prices asking them for their "final" best price. That should be fun.

 

[Nugget]

Best of luck on your purchase. It should be a fun day - I enjoy the process and the atmosphere.

There are many ways to do this - you have the advantage with the pre-approved financing. This is the busiest week in the auto business - the best week to buy. Dealers want to end the year with all cash and no inventory - doesn't make a lot of sense for tax purposes but this is an ego driven business.

Are you trading something in? If so, work the deal solely on a difference figures. My car + x = their car. Minimize X.

If no trade, just work the price - this should go quick. Tax and registration fees are what they are. Anything on the monroney (window sticker) is going to be included. Anything that is an addendum is optional (accessories, paint sealant, alarms). Work your price to include the doc fee.

At this point and time, the car deal to you is nothing but "metal and numbers". The model you are looking at is likely available at 6 other dealers within 45 minutes. Offer to call them from the showroom. Show them that you are ready to buy today if they hit your number - they don't want to give you a price to take down the street to be beaten by $50. Offer them your watch as colateral. These are old school guys who are working 70 hours this week. They want to wheel and deal and will take a shorter deal if they are entertained. What type of customer would you want to deal with.

After you make your screaming deal, let them try to beat the rate. They may stay with BOA and get you a lower rate - they do much more volume than you do. Credit inquiries within a short time frame count as one hit - they understand that you are shopping. They will offer you GAP, extended mechanincal plans, maintenance plans, etch protection, credit life, wheel and tire protection, and anything else they can think of. These are all negottiable. Depending on risk aversion, these may make sense for you. I would only consider a product offered by the manufacturer. I don't like the stand alone companies - they have no skin in the game.

Don't be afraid to walk but don't be afraid to be honest. Tell them what they need to do to sell you a car and they will likely cut to the chase to make it happen. They may stall once or twice to see how serious you are - they are just trying you on. Again - this is not personal - just metal and numbers.

 

[shuke]

Good stuff in here guys. I've never used online process but am thinking about it. I'm looking at Edmunds right now, and they are showing that I can get an offer from some of the dealers they have listed just by pushing a button. What are the pros/cons to doing this? I know I want a new Accord, but am willing to go 2013 or 2014, and would be flexible about some of the options. One thing I'd like to do is test drive the different transmissions, but I'd like to go into the dealership with a pre-negotiated prices via online. Can I do that for a number of cars, then go test drive and pick the one I want?

 

[Osaurus]

Hey Shuke...I usually test drive a few cars, completely ignore the sales people except for the test drive, and then go home and email multiple dealers in the area with the price I want. You can do a pre-negotiated price, but don't waste your time going to the dealer until it's time to take delivery. I play the dealers against each other usually resulting in whoever I decide to go with usually making ~$300. HTH

ETA: Forgot to mention this usually only works with a car they have on the lot.

 

[shuke]

Hey Shuke...I usually test drive a few cars, completely ignore the sales people except for the test drive, and then go home and email multiple dealers in the area with the price I want. You can do a pre-negotiated price, but don't waste your time going to the dealer until it's time to take delivery. I play the dealers against each other usually resulting in whoever I decide to go with usually making ~$300. HTH

ETA: Forgot to mention this usually only works with a car they have on the lot.

OK thanks. Got online quotes through Edmunds at one dealer, all about 4-5k below MSRP. The other Honda dealer closer to me is not open Sundays and it looks like they are not part of this price promise thing through Edmunds, but will try to do something online with them tomorrow.

 

[Osaurus]

Hey Shuke...I usually test drive a few cars, completely ignore the sales people except for the test drive, and then go home and email multiple dealers in the area with the price I want. You can do a pre-negotiated price, but don't waste your time going to the dealer until it's time to take delivery. I play the dealers against each other usually resulting in whoever I decide to go with usually making ~$300. HTH

ETA: Forgot to mention this usually only works with a car they have on the lot.

OK thanks. Got online quotes through Edmunds at one dealer, all about 4-5k below MSRP. The other Honda dealer closer to me is not open Sundays and it looks like they are not part of this price promise thing through Edmunds, but will try to do something online with them tomorrow.

TrueCar is another one. I don't know much about it though.

 

[The General]

And DO NOT walk around the dealership with a raging hard on. Trust me. This isn't a good look and could result in a worse deal for you.

 

[shuke]

Hey Shuke...I usually test drive a few cars, completely ignore the sales people except for the test drive, and then go home and email multiple dealers in the area with the price I want. You can do a pre-negotiated price, but don't waste your time going to the dealer until it's time to take delivery. I play the dealers against each other usually resulting in whoever I decide to go with usually making ~$300. HTH

ETA: Forgot to mention this usually only works with a car they have on the lot.

OK thanks. Got online quotes through Edmunds at one dealer, all about 4-5k below MSRP. The other Honda dealer closer to me is not open Sundays and it looks like they are not part of this price promise thing through Edmunds, but will try to do something online with them tomorrow.

TrueCar is another one. I don't know much about it though.

Interesting that I can only see the costs from this one dealer, while for the others I had to request a quote. I guess I'll just expect a barage of emails/calls tomorrow, and see how low I can get them. I guess I better figure out what car I want.

 

[Zasada]

FWIW, I did my most recent new car purchase entirely over email (save for the delivery itself). Sent an email to 8 of my local dealers asking for the best "all-in" price on exactly what I wanted (Make, Model, Colour, features, accessories, charges, taxes, & fees all included).

Seemed to work well. I got deep into the "unusually low price" part of the TrueCar curve, without actually using the site to get the quotes. When some dealers bowed-out of the bidding (it went multiple rounds), they complained about how the lowest offers were actually priced at a loss. Not sure I believe that, but with the level of whining it seems like I was extracting a good price.

By the time I was down to one dealer, we had a settled price and all I had to do was show up at the dealer, walk around the car, drive it briefly, and pay.

I guess my point is that while TrueCar looks great, I imagine they get a commission and that to me is just another opportunity to save money by doing it myself.

 

[Tiger Fan]

For anyone buying a new car, this site is an absolute must - http://www.fightingchance.com/

follow the instructions and you'll have no buyers remorse

 

[shuke]

I guess my point is that while TrueCar looks great, I imagine they get a commission and that to me is just another opportunity to save money by doing it myself.

The prices I'm seeing through Trucar are more than what I got by just requesting quotes through Edmunds.

 

[Zasada]

I guess my point is that while TrueCar looks great, I imagine they get a commission and that to me is just another opportunity to save money by doing it myself.

The prices I'm seeing through Trucar are more than what I got by just requesting quotes through Edmunds.

Yup. Nothing drives price down like competition. It's not hard to get the email addresses through Edmunds or some other way and just have each dealer compete with one another.