Our Jeep is the very first car we bought brand new. It was the most painless and easy transaction. It only took a few emails, a phone call to verify the transaction, and 30 minutes at the dealership to pick up the car. Half the time was spent watching them clean it. The best thing was that we got a great deal. We bought it at only $500 above invoice cost.
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If you’ve ever bought a car before, you know that the whole transaction can be a full day event at the dealership. You negotiate on the car price, the car loan and run through various add-on sales pitches they throw in. The first time I bought a car was full of theatrics from the sales folks. The salesman would pretend to be on our side in getting a great deal and would walk over to the manager who would flare his arms up in disbelief with our offer and send the salesman back with a counteroffer. This was repeated several times until a deal was agreed. Afterwards it was several more hours for paperwork and by the time we are done, it was night time. It was lots of wasted hours and not the best deal for us. The good news is that we got smarter since then.
When we bought our Jeep, we knew exactly which model to buy. We are Jeep folks. We love the outdoors so replacing our old one with the same model was an easy decision. I read the suggestions on Edmunds.com on how to get the best deal and employed what I learned to snag the deal we got.
Since we were buying a Jeep model, I reviewed all the options and add-ons for the model we want on their website. I also applied on their website for financing in advance and was pre-approved for the best rate they were offering. I read the reviews on Edmunds.com to ensure the ratings and user feedback were satisfactory. I printed the invoice cost and true market value (TMV) in my area for reference.
Once I had that completed, I checked the websites of the local dealerships for their inventory. I emailed the Internet manager of each dealership with my offer. Armed with all the information from Edmunds.com, I had a ballpark range for the best price I can possibly get. I low balled all of them to see what their best counteroffer was. I was essentially offering at invoice cost. Most responded off the bat that my offer was $4-5k below their lowest price. However, two dealerships were willing to work at my price range. I played them against each other and settled with the lower priced dealership. The dealership also had the exact model and color due for delivery the following day. I gave the Internet Manager a call to confirm delivery and to negotiate the price down more. He agreed to give it to me at $500 above the invoice cost published on Edmunds.com. I contacted the other dealerships again to see if they would try to beat the price. I knew I was getting a great deal when the other dealerships told me that the price was impossible for them. Prior to heading down to the chosen dealership the next day, I called them again to confirm the transaction. We were told that everything was ready. They also confirmed that the financing and approved rate was in order.
When we got to the dealership, the car was waiting for us. We took it for a test drive around the area. After the test drive, we paid our down payment and the Internet Manager finished the paperwork. As he was doing that, we watched them clean the car. Once both preparations were done, they handed the keys to us and sent us off with smiles. I can’t recall the exact mileage when we got the car but it was less than 20 miles. The car came directly from the factory. No one else have driven it besides their QA team. The other miles were from our test drive. It was such a good feeling knowing it was completely new.
I’m not sure how the dealership was able to offer the car at the low price when others couldn’t. They are, however, the biggest dealership in the tri-county area so that might have given them an advantage over pricing. Whatever the reason, we were impressed with the whole transaction and with the deal we got.
If you are shopping for a car, here are five tips in getting the best deal on a new car. These are the steps I used.
1. Decide which car to buy – narrow down your choice to the exact car you want to purchase. Compare the five year cost of ownership among your choices to help you decide. Read reviews and ratings. User feedbacks are a great resource to anticipate common complaints and problems with the model.
2. Get financing ahead of time – obtaining a pre-approved loan ensures that you can afford the car you want. Shop around for the best rates available to you. If you choose to obtain financing from the car manufacturer, apply directly at their website ahead of time. This helps reduce the amount of time you have to spend at the dealership. It also eliminates haggling over the terms of the car loan. Dealerships make money on your loan when negotiated through them since they often raise up the rates.
3. Check the TMV and invoice price on Edmunds.com– knowing the true market value (TMV) of the car gives you leverage during the buying process. Ideally, you don’t want to pay more than the TMV. Dealerships pay less than the invoice cost due to various discounts and terms they have with the manufacturer. So, even when I paid only $500 above invoice cost, I know they didn’t simply make $500 in profit. That would be too low for them. Make sure that your offer is reasonable. Dealerships need to make profit to stay in business. Feel free to low ball initially to get a feeling of their ballpark, then adjust your offer accordingly but stay within the TMV.
4. Contact the Internet Manager from several dealerships and let them compete – this method saves you time and allows you to control the negotiation process. Dealerships typically have the advantage when you are at their location.
5. Pick up your car or have it delivered – once you have agreed on a price, confirm your purchase by phone or through email. I recommend getting on the phone to confirm everything prior to delivery or pick-up. Talking to a real person on the line adds a layer of security and authenticity to the transaction.
Do you have other tips? Share them by leaving a comment. How and where did you buy your car? Did you get a great deal?