Best Way to Buy a New Car: 3 Buying Tips That Actually Work
Updated on April 1st, 2021
While searching for tips when buying a new car, almost every guide out there doesn’t tell you how you actually use the sales process to your advantage. I briefly incorporate the typical ‘common sense’ information in the summary steps at the bottom for completeness, but the bulk of this guide is a Ryan original, tried and true method for the best way to buy a new car. This strategy has saved me thousands off of the sticker price and it doesn’t take much effort to do it either.
Saving money on a new vehicle purchase is one of the best ways to save a lot of money at once instead of skipping lattes and employing smaller scale saving strategies.
And while you can use this new car buying guide and tips herein for any new automobile purchase, don’t expect to get a good deal for any unique or collectible car model that is in a seller’s market, such as the new C8 Corvette which is selling for thousands over sticker price. Trust me, I know. I recently bought a car and this was one of the cars I was looking into. No deals available on that one!
New Car Vs Used Car Strategy
I want to make an important distinction with this guide as well. While some of these strategies and tips are helpful in the used car buying process, the primary focus of this article is how to buy a new car.
Buying a new car requires a completely different strategy than buying a used car because new cars of the same years and model are mostly fungible, with the exception of colors and optional equipment. But even then if you are set on a particular color or feature set, there are usually multiple cars available in for sale across multiple dealerships in your area. It makes no fundamental difference to you who sells you the red Acura TSX, for instance. By focusing on new cars, there is additional supply of equivalent quality. The less picky you are about the color and optional equipment, the more supply there will be and the more money you will save when buying a car.
However, on the contrary, when it comes to used cars, almost every one of them is unique with different mileage, wear and tear, service history and potential operating problems. Two used red Acura TSX’s will be two different cars even if from the same manufacturing year. You will likely have to inspect each car personally and test drive them to narrow down the set that you are willing to buy. But even then, there is no set rule how much a red Acura TSX with 10,000 miles should cost relative to a red Acura TSX with 14,000 miles. There’s a lot of subjective judgment calls.
New cars are a little more objective for the base part of the product.
Do Not Go to New Car Dealers in Person
Most people don’t have a clue how they can get a good deal on a new car. How their parents bought cars and maybe how they have done it in the past by going into a dealership and negotiating on the spot with a car salesman is the wrong way. In today’s world, you need a modern new car buying strategy that actually works and isn’t time consuming.
You will never get the best deal walking into a dealership because you will be worn out after the salesman goes to “speak to his manager” 15 times at every counteroffer and you will be at the dealership for hours. By the end of the day you’ll just pay any price to get the damn car off the lot so you can make it home by supper. The salesman’s job requires him to be there all day; it doesn’t matter to him if he keeps you there alongside him for the whole day, especially if it helps his side of the negotiation.
Wasting a day to buy a new car is the wrong way. Paying MSRP to save yourself some time at the dealership is even worse. Don’t do either.
The method I describe below is convenient and not time consuming because the only time that you actually have to physically talk to a car salesman is when you are entering the dealership to sign the final paperwork. Everything else is conducted online.
Every Dealership Has An Internet Salesperson or Department
I’ll detail the full steps you should take in the new car buying process at the end of this guide, such as getting your financing arranged prior to searching, but I want to cut right to the chase of the strategy you will use: buy a new car online using email negotiation.
Your new car search likely began with the internet, so why shouldn’t it end there too? Every new car dealership is going to have a website with their inventory online and at least one person who deals with the online inventory.
Using the internet will allow you to negotiate harder and walk away easier if a particular deal isn’t going to work for you. Many people, myself included, don’t really feel comfortable negotiating things in person. I hate haggling and I am pretty sure that if I was on the spot with a salesman, I might fall for the sales tactics and agree to a price that was more favorable to him.
They know this and will try to get you to come in throughout the process. Don’t do it!
Your Only Method of Communication is E-mail
The key method is that you are going to email the same message to every dealership in your area that sells the new car you want to buy (replacing the car model and optional features you want, of course). It’s going to take you less than 10 minutes to email 10 dealerships in your area with the copy and pasted message.
If you are interested in an Acura TSX, a Mercedes C class and a BMW 3 series, you are going to email each Acura dealership, each Mercedes dealership and each BMW dealership in your area and ask them about what the best price of the respective model and features they can offer today.
I suggest something like:
“Hello, I am looking to buy a new car within the next 30 days. I am particularly interested in the Acura TSX, with the sport package. I see you have one listed in inventory online. Do you have additional TSX models not currently listed or additional TSX models on order expected to be delivered to your dealership soon? What is the best out-the-door price you are willing to sell it for? Can you please send me the window sticker of the new car you are willing to sell at that price?
If you really, really want a red one, you can ask for it, but remember that you are limiting your options the more specific you go. Some dealerships might not have that color in stock, or they might not be willing to offer a good price on it because they are flying off the shelves.
Price Not Payments
A critical point is to always negotiate the price of the new car, not the payments. With payments, they can play games with the interest rate and stretch out length of payments to make damn near everything short of a Ferrari affordable. You’ll end up paying a lot more for the car and interest if you do it that way.
Also, it is important to discuss the out-the-door price of the new car. Every dealership has a load of bullshit fees that they tack on to the price of the car to pump up profit. Why does it cost $500 to fill out some paperwork? Why isn’t that factored into the cost of the car? Well because you didn’t know those fees were going to be tacked on at the end.
“Doc fees,” “preparation fees,” “destination fees,” and other unnecessary line items can add up to thousands more, which will negate any good deal you thought you got.
Make Sure The Car Actually Exists
Ask for the window sticker, which will show you the optional equipment and the VIN. It’s critical that you get this information to prove that the car actually exists. Some unscrupulous car dealers will claim they have a particular car at a good price and when you go down there to sign the paperwork, they claim the car was ‘accidentally sold to someone else’ even though there was no car to begin with. But we have these other cars available to buy today….
There’s another subtle reason for obtaining the VIN #. Some demo cars or cars that have used as courtesy cars are legally eligible to be sold as new cars if they’ve never been registered to a private party. It might have 3,000 miles on it and still be considered “new.” When you have the VIN #, you can run it through CarFax or EpicVIN (half the price for more info) to find out if it has a prior history.
And this isn’t just a pedantic theoretical point. When I was car shopping 5 years ago, one shady dealership tried to push one of these cars on me. Had I not verified the car, that great deal might have been for an “almost” new car.
Additionally, I don’t recommend you provide a phone number during the initial email because if you talk to 5 different salesmen from 5 different dealerships, all the details are going to get muddled on the phone and its better to have everything in writing so that a they cannot pretend something was or wasn’t said later.
I also think it is important to mention your timeline. If you are going to be taken more seriously if it sounds like you are on the verge of buying something and not just window shopping, poking around or dreaming about buying something without any intention of doing so.
And finally, don’t trade in a car in this process. Sell it private party and get the best price. If you do a trade-in, you will be low balled and then you are suddenly making your new car purchase conditional on a bad price for your trade-in.
Collect The Replies
After you send your 10 or so emails, you will get 7-8 replies, and 2 will be within the first 10 minutes and another 2-3 will be within the hour. I sent an email to a dealership a few weeks ago and got a reply within 5 minutes. Car salesman live by the commission, so they are motivated to get your wallet in front of one of their cars.
I would wait until a few offers have come in so that you can start the comparison process. The nice thing about email is that there is no urgency. If you talk to someone on the phone, they are going to try and get you to come to the dealership as soon as possible and give you the hard sell on the spot.
Now, if you’ve done some research already using TrueCar.com, you will already have a good idea what price range the cars will come in at. The price range of your replies will likely be pretty wide because everyone has different sales tactics and goals for the month. Some will be ridiculously high because a salesman might try to get you to work him down from his maximum price, whereas another might just need to get an extra sale in for the month to get a bonus so he’s offering a really good price.
The only real legitimate difference between two cars of the same model will be the optional equipment which you can back out of the price to get the ‘base price.’ When you back out the optional equipment you can compare apples-to-apples.
Play Them Against Each Other
Don’t just pick the cheapest new car from the replies, play them against each other. This is how to negotiate the purchase of a new car without haggling. Basically let them haggle against each other.
I always start with the highest offers (optional equipment adjusted, of course) . Email them back:
You absolute scumbag car salesman trying to rip me off, I’ll never buy a car from you ever!
No, just kidding! Don’t say anything like that! Don’t put them off, and don’t delete their emails just yet. Throw them back into the negotiation pool and give them a chance to redeem themselves. And be nice. I suggest something like:
Hi Tom, thank you for sharing details about the car you currently have available. However, I am wondering if you can do any better than this. I contacted another dealership and they have the same model, color and equipment package for $2,000 less.
I have no problems telling them which dealership if they ask, and you might even want to reveal it outright to prove you aren’t bluffing. I would say once they know that you have a better offer on the table, 99% of the time they are going to try to beat it. They won’t try to beat it by much, but you will now have a more competitive range of cars in the pool.
I’ve once had two dealerships outbidding each other $50 at a time. I was emailing back and forth multiple times before I straight up said that this was going to take all day and asked if they could just drop the price by $500. They did.
After you start squeezing them down to the minimum profit they are willing to accept, 2-3 dealerships some might request that you put down a $500 deposit on your credit card. You should only do this if it is a refundable deposit without any conditions. But they will know you are serious if you are willing.
Finalize a Deal
You’ll have to play them against each other for a few days (literally a few minutes per email crafting a response), but after you’ve gotten everyone’s best and final offer you can decide which one is the best deal for you. Maybe those $500 heated seats are worth it to you. Maybe the red car is worth another $1,000 to you instead of the blue one.
But under no circumstances should you go to a dealership before a car deal is worked out beforehand. Some new car dealers will say that they want to put a face to the person, or want to develop the relationship better, but all of that is just to get you down there to apply some sales tactics. There is no reason for you to waste your time.
Now, if you aren’t paying cash, you should have already procured financing ahead of time. Loans as low as 2.49% APR are available from Even Financial and their service allows you to see what their lowest offer is without affecting your credit score, which is pretty cool.
However, it doesn’t hurt to see what the dealership is offering for financing, as well, since I occasionally still see those “0% APR for 5 years” deals on some brands of cars. That would technically be better than paying cash.
One thing to watch out for is that some car salesmen condition the offer of the car price on the condition that you get financing through their financing department. They do this because the car company’s internal financing branch usually offers some incentives to get their cars financed through their own company. Why leave all that interest on the table, right? This is not necessarily a deal-breaker since you can pay off the loan immediately or refinance with your local bank after the first payment. Just be aware of this and maybe ask them during the initial emailing if there are any conditions on their offered price.
The Last Stage
After you have a car deal in writing, it is okay to move the conversation to the phone to provide your social security number or other sensitive information to see what offers you can get for financing loans.
If the financing is better than what you have great! Otherwise, tell him you will go with your bank financing. Set up an appointment to go sign the documents and have him send over the paperwork a few days before so that you can review it for any gotchas. Usually there is a whole host of paperwork that you are required to sign and signing it on the spot without reading it beforehand is uncomfortable.
Summary Steps: How to Get a Deal on a New Car
Step 1: Determine the pool of car models that you would consider buying
Which new cars appeal to you based on their design, features and affordability? You can be very focused if you have your mind set on a particular car, but you’ll have more options for a great deal if you have several models of vehicles that interest you. You likely already have some car models in mind before even beginning this process.
Step 2: Financing
If you are not paying in cash, get pre-approved for a loan ahead of time. Not only will you get a better rate than financing at the dealership, you’ll also have a good idea going into this process how much you can actually afford.
Step 3: Research, Lot’s of Research
After you have narrowed your list of new cars down based on what you can afford, you need to know what features come standard and which come as options. Options can change the price of a new car by thousands for some car manufacturers that offer spartan base models at rock bottom prices to get you in the door.
My favorite site for new cars is TrueCar.com that shows you ranges of sales that real people have gotten. They won’t show you how to buy new car at the lowest price like this guide does, but at least you will know what you should aim for. If you aren’t that picky about what kind of new car you will buy, this site will point out which cars are the cheapest.
Additional car buying websites like CarGurus.com, AutoTrader.com and Edmunds.com can also be helpful for the price comparison process, but usually if a car is listed on one site, it is listed on all of them.
Have an idea of what you might be able to buy the car for before even soliciting dealerships.
Step 4: Solicit Dealers online
Find out what models they have in inventory and get window stickers or VIN#s to prove they are real cars.
I don’t think it is helpful to start the conversation off with offering a particular amount of money though because if you are too low, they might not even respond to the email because it might be unrealistic and think you aren’t a serious buyer.
Use EpicVIN to confirm the car they are claiming is on the lot is real.
Step 5: Play the new car dealers against each other
Get the rock bottom prices by showing other dealers that better offers are available. At the very least get them to price match so that you have additional leverage with other new car dealers.
Step 6: Finalize The Deal
If you have done everything right, you’ll go to the dealership a single time, submit payment, sign your paperwork and leave with your new car.
Congratulations! Enjoy your new ride!
If you found these new car buying tips helpful, please share with your friends. You’ll set them on a path to save thousands.
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