New Car Buying Tips

[Andrew Joiner]

Any tips on recent new car purchases? Anything you'd do differently?

I'm looking to buy a new 6 passenger vehicle.
My priorities are:
1-reliability
2- low cost
3- decent mpg
4- longest factory warranty on electronics. The 5 year bumper to bumper on Kia, Hyundai and Mitsubishi looks good.

I bought a car 5 years ago by sending out emails to 20 dealers asking them bid on the exact same car model and specs. That was easy and we got a good price. I'm about to try that again soon.

[Jim Becker]

Know what you want in detail (make/model/trim/options/accessories) and certainly narrow by things that are important to you, such as the warranty period. But also have alternatives that will work for you so you can "walk" if you cannot get an acceptable deal. Know what it costs, both for MSRP and dealer invoice. Understand how sales taxes work on new vehicles in your state relative to trade-in, if you will be trading in. If you have a trade, do your due diligence to determine what the value range is for the vehicle before it's appraised by the dealer...they will always low-ball you...and don't even mention it until you have a price for the vehicle you want to buy. Negotiate the trade just as aggressively. Whether you are expecting to buy off the lot or factory order, be willing to travel to BUY the vehicle. That does not limit you from getting service locally for warranty work. Take advantage of programs like Subaru's VIP program where a contribution to certain charities gets you invoice pricing on the vehicle and any options/accessories you get at the time of initial purchase. Do your initial inquiry and negotiation online and don't accept "you have to come into the dealership to get the price". Make sure you get "out the door pricing" that includes required regulatory fees as well as any fees the dealer charges. Do not discuss "monthly payments". That does not come until you have a price for the vehicle. Do not agree to accept dealer add ons and if they are already installed, don't agree to pay for them. These are high profit things like "protection products", "etching", etc. You will be pitched on extended service contracts (what folks call "extended warranties") and you do not need to purchase them at the same time as the vehicle, particularly if they are manufacturer backed. If you want to consider them, take your time and shop multiple dealers. Avoid third party contracts...manufacturer back is they way to go. (There have already been multiple threads about these contracts; some folks like them for insurance (which is what they are) against failures of expensive electronics and system and some folks will not touch them. Choose based on "you)

Most importantly, and I already sort of mentioned this...be willing to walk out the door (or not walk in the door) if there is any funny business during negotiation or when finalizing your purchase. YOU be in control.

I'm a Subaru guy. I also buy the ESC at this point. It's cheap insurance, at least for me. I don't pay more than dealer invoice for the vehicle and for the ESC, I know what competitive pricing is before I get to that point.

[John M Wilson]

Carmax (and probably other national chain used car companies) will give you a firm price, in writing, for your used car. This number is good for a couple of days, and does not depend on you buying a car from them. Go there first & have this in your pocket for the negotiation with the dealer for your trade in. In addition to being able to spot a low-ball, this gives you confidence to be able to say "I don't need to trade in my car with you, I've got a better offer from XXX". In our state, sales taxes are a little less if you trade in at the same time you purchase your new vehicle, but if the dealer can't come close to the number I have in my pocket, I just tell them I'm not interested in trading my car at a loss.

It helps shift the power dynamic a little, but it's tough when you buy/trade every 5 years, and you're sitting across the desk with folks that do it every day.

[Jim Koepke]

Just curious, how is the car market these days?

When I was looking for a new truck vehicles were in high demand and dealer stocks were low. Are things anywhere near normal now?

jtk

[Jason Roehl]

Jim has great advice above. I've never bought a new car, but I have had a few friends who were car salesmen over the years. Your biggest power is to be able to walk--that is something they try hard to avoid. But you also have to be willing to pay a realistic price that is in the ballpark of the current market--that is, what they can sell the car for to the next guy who wants one. Having multiple bids from other dealers bolsters that price.

Another hard sell is often gap insurance--when we bought my wife's Explorer (a '17, bought in '20), the guy pushed the gap insurance hard because it would have meant a lower interest rate. I did the math right in front of him--$800 more in interest vs. $2700 in insurance over the life of the loan, plus we were putting enough down on the vehicle that we weren't ever going to be upside down. Ended up getting a much lower rate by refinancing with our own bank a year later.

Don't forget to consider what your time is worth. You can spend hundreds of hours researching and shopping to save $1000, and if that's what you like to do, great. Or maybe you hate car shopping and a little extra cost is worth it to get away from the snake pit sooner. (Me)

[Mike Cutler]

Don't believe that you are limited to buying from a dealer within driving distance of your home. Especially if buying new.
Cars dealers have to compete with all other car dealers, not just the ones in the local area. With new cars they have to compete with every other dealer in the US. I saved $3K on a BMW/Mini Cooper just by picking up the phone, prior to negotiations, and got exactly what we wanted. The "hook"? The car was in Pittsburgh, and I live in Eastern CT. I was going to have it shipped, but my wife wanted to fly out, pick it up, and drive it back for fun.
I have purchased cars, new and used, in Pittsburgh, Scranton, DC, Ramsey NJ, Vermont, and have come close to buying them from Texas and Seattle. Don't limit yourself to your local dealers.
I agree with everything Jim pointed out, and you absolutely need to do your research and know the market for the vehicle you're looking for. But when I walk out of a dealership, I walk for good. I do not come back again. There is no "find your best deal, and call us back" with me. A car dealer has one chance to sell me a car, and that's it. If you come back after "shopping prices", you've done their work for them, and surrendered your leverage.
I'm not a jerk about it, I have the offers and prices from other dealers nationwide and I know the cost of transportation to my door. I'm also realistic about what the price should be. I've walked out of a lot of car dealerships in my life.
The used cart market right now is still very tough for specific types of vehicles, so if you end up going down that route, be aware that you may not save big $$$$ going used, and that is a lot more work. New is easy. Find what you want and type in your offer to the website.
the cost for transportation has gone up, so if you do buy and have the car shipped to you, know those prices also, and know how your DMV works.
In CT I run the temp plate from the dealer I bought it from for as long as it takes for titles to transfer from state to state. I don't get a Temp tag from CT unless I have too.
Have fun "shopping". It's not the gut wrenching stress ball experience it used to be.

[Stan Calow]

I was in my Toyota dealer for service earlier this month. I took a look around the sales floor and the lot while there, and I still see a scarcity of new cars. I talked to my trusted salesperson who said that there was still a 6-mo backlog on the most popular models (need to put a deposit down if you want one). She said their biggest problem was a shortage of truck drivers to bring the vehicles in from the West coast. So she could never predict what was coming in and when, as stuff was being sold by dealers while still at the dock. I hope that's not true for other brands.

We have a Ford plant here (F-150s), and the people I know working there still get shutdowns due to part shortages. Nevertheless if you drive around, you'll see vacant parking lots suddenly full of hundreds of trucks staged for shipment. But their priority is their fleet customers.

[Brian Tymchak]

....Make sure you get "out the door pricing" that includes required regulatory fees as well as any fees the dealer charges.....

Yes, this ^^^^. I've always told the sales person at the dealership that my offer is "out the door price" and that I want their offers to be the same. I walked out of my very first negotiation when I was buying my first new vehicle because the saleman kept negotiating the costs of various fees, options, instead of the bottom line price. However, the last 2 new trucks I've bought, the sales people were very willing to work that way.

[Brian Elfert]

Are dealers actually willing to sell below MSRP these days? I know for a few years were simply telling potential customers MSRP take it or leave it.

I wouldn't buy a car simply based on the longest factory bumper to bumper warranty. You may find it a better value to buy a car that has a shorter factory bumper to bumper warranty and then add on a factory extended warranty. Do NOT pay full retail for a factory extended warranty at the dealer where you buy the car. Most, probably all, manufacturers let you buy the factory extended warranty from any dealer in the USA. There are plenty of dealers who will sell a factory extended warranty to anyone in the USA at a substantial discount. You can always ask the selling dealer for a price match on the extended warranty.

[Brian Elfert]

We have a Ford plant here (F-150s), and the people I know working there still get shutdowns due to part shortages. Nevertheless if you drive around, you'll see vacant parking lots suddenly full of hundreds of trucks staged for shipment. But their priority is their fleet customers.

I read about many fleet buyers who had trucks on order in 2020, 2021, and 2022 and had been waiting months, or years, to get their trucks. I don't know if things got better in 2023. The big three had no desire to build inexpensive fleet trucks when they had more orders for loaded $75,000 to $100,000 trucks than they could fulfill. Some fleet buyers ended up buying used trucks to get by until their new trucks finally came in. Companies needed more trucks to handle their booming business. Fleet customers didn't seem to have priority.

The same thing happened with car rental companies. Car rental companies dumped a lot of their fleet in 2020 when travel demand dropped to basically nothing. They assumed they could just order a new fleet of cars once demand picked up. They found that when they needed new cars that they couldn't get any. Car manufacturers were delivering all of their cars to dealers and they didn't have the capacity to supply car rental companies. I heard of some rental companies buying used cars to get by.

[Jim Becker]

Are dealers actually willing to sell below MSRP these days? I know for a few years were simply telling potential customers MSRP take it or leave it..

Absolutely. It was tougher during the pandemic, but the new vehicle market has recovered pretty reasonably. Of course, this is also geographical and competition matters. Even during the pandemic, I could have bought a Jeep product for 5-6% below dealer invoice and my local Subaru dealer continued to participate in the VIP program which gave dealer invoice pricing. That said, there are still dealers out there that consider certain vehicles to be "worthy" of above MSRP pricing in some areas, including for the larger Kia and Hyundai SUVs. Bottom line...shop around as one does not have to 'buy" locally.

[Jerome Stanek]

My daughter and her husband just bought a new SUV and she did most of the work over the internet. They ended up with thier own financing as the 1.9 was only for 36 months and they took it out for 84 but will pay it off in less then 48 by making double payments so the intrest is lower.

[Andrew Joiner]

Thanks for the responses, good information. I don't have a trade in and won't be getting a loan. I'll be paying cash so that makes it easier to get out the door prices.
I guess it's worth getting bids outside of a 200 mile radius. I can't believe the cost of transporting a new car would still make it competitive but it's easy to check out.

[Jim Becker]

Thanks for the responses, good information. I don't have a trade in and won't be getting a loan. I'll be paying cash so that makes it easier to get out the door prices.
I guess it's worth getting bids outside of a 200 mile radius. I can't believe the cost of transporting a new car would still make it competitive but it's easy to check out.

You don't necessarily need to transport...take some form of public transportation to the destination if it's available to get close and then grab an Uber/Lyft for the "last mile" on delivery day. Drive the vehicle home (gently 'cause it will be in the required break in period) and enjoy it. Or do a road trip with a friend and convoy home, paying for their gas and meals.

[Brian Elfert]

You have to consider how many miles you're putting on a car versus how much money you are saving. If you're the type who calls a tow truck to take a car to the scrap yard at the end of its life then it probably doesn't matter. If you tend to trade often it could make a difference.

My brother drove from Minnesota to Florida to buy a late model used minivan around 2012. He said prices he was finding were several thousand less than Minnesota and no salt exposure. The intention was to have the dealer scrap the current car once he got there, but the car gave up in Georgia. He rented a car to make the rest of the trip. He tends to keep his vehicles until the wheels fall off.