Buying A New Car? Read This First

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No single consumer purchase causes more headaches, more irritation and leads to more buyer’s remorse than a car purchase. Nothing even comes close to it.

And with good reason: Car dealerships love fees and extras perhaps more than anyone else in the travel industry. They rarely tell the entire truth about their prices, indiscriminately blurring the lines between the sticker price, invoice price and out-the-door price. They try to upsell you on preposterous extras like “undercarriage protection” and extended warranties. And they play games with you when you just want to buy a car, doing the “I’ll-talk-to-the-boss” two-step while you stew in a cubicle.

The result can be up to 15 percent net profit margins on some sales for the dealership. But it can leave you feeling ripped off.

I ought to know. I’ve played that game more times than I’d care to admit.

But there’s good news for you: In just a few weeks, a brief window will open where you will have the advantage. And outside of those few weeks, I have a little advice that will ensure you don’t get taken on your next car purchase.

If you’re in the market for a new car, the scales tip in your favor on the last day of the month. That’s when car dealerships are under pressure to make their numbers, say insiders. “If you can coincide your purchase with the end of a sales quarter — March, June, September or December — you’re liable to see even greater results,” says Jim Milan, a manager for Auto Accessories Garage, a car accessories website.

The day of the week and time of day is important, too. Swing by your dealership on a Monday or Tuesday, when no one else is there, and you’ll get better service and perhaps even a lower price. Later in the week? Not so much. Also, if you come into the dealership late in the day, you’ll probably be able to negotiate a more favorable price, so it pays to wait until late afternoon to take that test drive.

Pay attention to specials, too. Manufacturer promotions can change monthly. For example, last March, GM offered lessees of Asian brands a $3,000 bonus on select models.

“You could lease a 2017 Cruze LT from just $99 for 24 months with $219 at signing,” says Alex Bernstein, a senior pricing analyst at CarsDirect. “We haven’t seen a deal that good on the Cruze ever since.”

Generally, the best time of year to buy a new car is fall and winter, according to data compiled by TrueCar, an auto buying site. Bonus points if you can hit the retailer at the end of the model year. For example, the car I covet is a 2017 Honda CR-V. The model year ends in December. Maybe I’ll pay a visit to my dealership on a late Monday afternoon at the end of December to see if anyone there is in a sellin’ mood. Betcha they will be.

If you’re considering a new car purchase in 2018, wait until Labor Day, which consumer finance expert Andrea Woroch says is considered the “Black Friday for car shopping.”

“With the release of new models and the holidays coming up, dealerships need to make room for new vehicles and lower prices on older models accordingly,” she says. “You can also expect more competitive financing offers like zero-percent interest for qualified buyers. Such deals will trickle through the following months so keep looking out for discounts through October through December. Just don’t get talked into buying the latest model for more.”

The “how” is an interesting — but more complex — question. You can drop by your dealership for a test drive, but that’s exactly what they want you to do. Once you’re behind the wheel of a new car, they think you’ll be hooked and the sale will be theirs. Don’t put yourself in that situation.

“From the color of the ink salespeople use, to the angle of the writing, to the need to ‘check with the boss,’ to the circling of numbers, it’s all thought out and strategically planned to get someone to buy,” says Bill Brierley, a former car salesman from San Diego. “It was fascinating the psychology that they put into everything.”

So, rule #1: Avoid the dealership if possible. Do all of your negotiating before you buy, not when they have you right where they want you.

Professional car buyers like AAA or Costco will find the model you want and broker the deal. They usually negotiate with a dealership’s fleet department, which is programmed to sell lots of cars quickly. The broker adds a fee, but you usually pay close to or less than the published invoice price.

Readers have had mixed results with these services. Pam Mandel bought her car through Costco, which offered fixed pricing and “no screwing around.” She adds, “it was painless.” But another reader, David Simundson, tried AAA’s Auto Buying Service. Not only did it fail to find the vehicle he wanted, but it inundated him with phone calls about cars he didn’t want. “Never again,” he says.

My own experience with AAA was similarly disappointing. It found a price on the car I wanted for a few hundred dollars below the sticker price. No one pays the sticker price.

Use an online buying site

These come in many different flavors. Among the most most popular sites: CarsDirect and TrueCar, both of which let you find actual prices on cars and shop real-time inventory. There are also online sites such as Authority Auto, which will look for the model you want, but charge a fee. Or you could check sites like Carvana for a pre-owned vehicle.

Online buying can work, but not always. Audrey Strong used TrueCar to buy a used car earlier this year. “Worked great,” she says. “The car actually existed, was on the lot and they gave it to us for less than the price listed, provided the Carfax [repair report] and were transparent about issues with the car.”

I personally found the inventory selection on TrueCar was good for my desired model, but it required that I enter my personal information, which added me to some dealerships’ spam lists. For the vehicle I wanted, Carvana only listed used, high-mileage vehicles which were of limited appeal. CarsDirect had the most options. And Authority Auto’s approach felt wrong. I’m deeply skeptical of paying money for the opportunity to buy something, so I skipped it.

My favorite buying method is being your own broker and buyer. Use a service like TrueCar or Kelley Blue Book to find the invoice price and “fair market range” of the vehicle you want. Then contact the dealerships directly by email. Pro tip: Dig up the fleet manager and contact that person directly, asking for a bid. They typically won’t try to lure you in for a test drive, focusing instead on making a quick sale.

That’s what Ross Werland did when he bought a Subaru last year. “Using a very specific model, I queried every Subaru dealership within an hour’s drive via email about that model,” he recalls. “All of them got back to me with offers. Very easy. We took the lowest one.”

If only it were always that easy. But these expert tips will help you get closer to a painless car purchase.

Christopher Elliott specializes in solving unsolvable consumer problems. Contact him with your questions on his advocacy website. You can also follow him on Twitter, Facebook and Google or sign up for his newsletter.





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