how to buy a car from a dealership

Invoice price is what the dealer pays the manufacturer for the car; the manufacturer’s suggested retail price (MSRP, or “sticker price”) includes hundreds—usually thousands—of dollars of profit for the dealer.
The Fair and Accurate Credit Transaction Act of 2003 (FACTA) allows every consumer to get a free copy of his or her credit report once a year from each of the three major credit-reporting agencies (TransUnion, Experian, and Equifax).
But that doesn’t mean it’s an easy time to buy a car, and it doesn’t mean dealers are going to lie down and give the cars away.
If dealers know they are being pitted against other stores, it will be easier for you to get their best offer right off the bat, and waltzing into a dealership with a first offer already in hand gives you an advantage in negotiations.
If you come into the dealership on a midweek morning when business is slow, the salespeople are more likely to make a good deal as well.

The low Annual Percentage Rates (APR) that dealerships and car companies advertise on television are the interest rates the dealer charges for financing.
If you meet the qualifications set out by the car dealer — perhaps you’re a first-time car buyer, or you have excellent credit — you may want to consider going through their finance department.
But most car buyers today make their purchase by paying a down payment and then financing the balance — making monthly car payments until the remainder of the loan is paid in full.
You’ve done your work and now the dealer has to work to get closest to the price you want to pay.
The key to a great deal is to get the best price on the car as well as the best possible financing rate.
One more thing to keep in mind is that, according to Car Buying, trade-in buyers are among the world’s most gullible people.
Unless you don’t mind paying thousands of dollars in interest, you’ll want to make your down payment as high as you can afford.
Often, those low rates are only for people with perfect credit or they are an introductory rate, meaning they will go up after a certain period of time.
Whether you buy from a dealer or a private party, both require equal amounts of diligence on your behalf, including running vehicle history reports/VIN checks, comparing prices, working out financing, weighing car insurance costs, and inspecting and test driving the vehicle.
Before shaking the seller’s hand and signing a check, it’s important to weigh the possible pros and cons of a buying a car from a private seller.
To be clear, the Range Rover is unrelated to the Range Rover Sport.<br /></span></p><p><span class="ecbody">Land Rover’s venerable Range Rover can tackle tough off-road terrain that would foil less-capable SUVs, yet it still has the cachet to warrant a front-and-center parking space at an upscale hotel.
2679912011311715674611/8/2010Choice of two V-8 enginesSix-speed automaticStandard navigation systemOptional adaptive cruise controlOptional cooled storage boxRange Rover cachet for a less expensive priceStylish interiorFront-seat comfortTowing capacityFuel economyBackseat spaceRear seat folding action<p><span class="ecbody">Land Rover’s venerable Range Rover can tackle tough off-road terrain that would foil less-capable SUVs, yet it still has the cachet to warrant a front-and-center parking space at an upscale hotel.
<br /></span></p> <p><span class="ecbody"><span class="echeader">New for 2011<br /></span>&nbsp;<br />Aside from changes to option package content and new exterior colors, there are no significant changes for 2011.<br /><br /><span class="echeader">Exterior<br /></span>The Range Rover Sport features a two-bar grille and a large air intake flanked by LED headlights.
Exterior features include: <br /></span></p> <ul> <li class="ecbody">Standard 19-inch alloy wheels with low-profile tires</li> <li class="ecbody">Standard skid plates</li> <li class="ecbody">Standard rear spoiler</li> <li class="ecbody">20-inch wheels optional </li> <li class="ecbody">Optional adaptive headlights swivel to better illuminate turns</li> </ul> <p><span class="ecbody"><span class="echeader">Interior<br /></span>A 5-inch LCD screen within the instrument cluster houses an information display.
Interior features include:<br /></span></p> <ul> <li class="ecbody">Standard DVD-based navigation</li> <li class="ecbody">Optional upgraded Harman Kardon stereo</li> <li class="ecbody">Optional cooled box for drinks, etc.</li> </ul> <p><span class="ecbody"><span class="echeader">Under the Hood<br /></span>Two 5.0-liter V-8 engines are offered.
I had received $10,900.00 for trade on the first car and financed $7,367.00 for a total purchase price of $18,267.00. In January 2010, I called to get the car brought in for new tires… It was at this time that I was informed 1) I was informed I had to drive the car at least 25,000 miles before getting the new tires and 2) that the car had to have all oil changes done at the dealership and that since I had not done so, the tire warranty was void.
My car had died unexpectedly, so I went out and, after a few test drives, I bought a car in November 2009 and it wasn’t the right car for me so I traded it back to the same dealer for purchase price minus "registration fees" Those fees came to $1011.00. But I bit the bullet and took it as a "rental fee".
Now ask the Internet sales manager or the dealership’s Price Promise contact to supply a breakdown of all the fees, or a "worksheet," which lists the purchase price, the vehicle’s invoice and all related fees.
If there’s no Price Promise offer on a car you want, shopping through a dealership’s Internet department will save you time and money.
Just look at this article, loaded with warnings about how you could get taken to the cleaners during vitually every step of the car buying process! What does that tell you about the integrity of the whole class of businesses that sell cars? While the internet appears to be helping buyers, I’m finding that many dealerships view it merely as a toll to gather sales leads which they then want to lure into the same sordid sales process.
But how much of a discount can you expect?’s True Market Value (TMV®) pricing uses actual sales figures to reveal the average price buyers are paying for cars in your area.
Now that you are approaching the deal-making phase of the process, here’s more about a good pathway for buying a new car: the Price Promise program.
Look for Price Promise offers on the car of your choice, print out the certificate on the page and you are ready to go to the dealership to conclude the deal.
But back to the financing question: Bill reveals, "One tactic dealers sometimes take is getting the buyer lost in the numbers, by asking them, ‘Where do you want to be? What’s your budget?’ And then once we know that, we start talking about financing through us, which is a way we make a lot of money on the back end of the deal.
It’s not necessarily bad form for the buyer to tell the car dealer up front that he’s strongly considering financing the car through the dealer — and then, later, saying, "I changed my mind," after negotiating the purchase price.
Apprehensive about shopping for a new car? Afraid you’ll say the wrong thing to a car dealer that will give him the upper hand in the price battle? Shopping for a new car, or even a used one, doesn’t have to be that kind of nerve-jangling roll of the dice that it was many years ago.
"So if you tell them up front you’re paying cash, the dealer knows he has no opportunity to make money off you from financing.
"When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains.
It’s best not to reveal your hand on the outset that you don’t plan to use dealer financing before you negotiate the vehicle price.
"Dealers will absolutely try to get you to negotiate monthly payments instead of purchase price, because we make more money if we do it that way," says Bill.
It’s a common consumer tactic to play two car dealers off each other, or in auto dealer parlance, "cross-shopping," to see which one can give you the best deal.
And while it may be unwise to tell a dealer you’re desperate for a car — information that can bring out the shark in any sales rep — there’s nothing wrong with telling the car dealer that you’re definitely looking to a buy a car in the next few days.
But it still helps to know what to say and what not to say as you and the car dealer play the game of haggling the price, because, you could still say the wrong thing to give the car dealer a leg up on the negotiations.
A word on invoice price, which was a valuable tool when it first began appearing online: Dealers have figured this out, and now muck it up with holdbacks or other fees to convince consumers they are getting a cheap price while hiding their profits.
The world is now full of consumers who think they’ve scored a great deal by getting "invoice price" off the Web, only to get screwed by tack-on delivery fees, expensive financing or back-room shenanigans like window etching.
Once you’ve settled on the car you want, with the options you want, e-mail at least five local dealers and one non-local dealer, and ask for their best out the door price.
Put another way: in a presentation on the car buying process that has a cult following, video game developer Rob Gruhl makes this point — "You wouldn’t stock up on candy at a movie theater." Say, "No, no, no," and hand over that check with only the out the door price on it.
If you find you’ve been tricked into purchasing an extended warranty, many states have "regret laws" that give consumers five or 10 days to back out of that part of the deal, no questions asked.
Some consumers also have luck buying a car near the end of the quarter, or of the month, when a dealer might be more anxious to "make a number" and reach an automaker sales incentive.
Many people think they are good at buying cars, but like a good wrestler, dealers are very good at using their alleged strength against them.
because the bulk of money in a dealership is made on the back end… by service contracts and financing kickbacks….. financing institution offer dealers “BUY rates” for specific customers and delares kick this up to make more money…… the financing comapny and the warranty company come to the dealership and emand money back when you pay off the car with cash or your other fonanacing…… they knocked the deal down to bare minimum and sometimes loss to make what they think is more money on the back end….
It took a bit of time to find a dealer willing to work with that price, but I ended up paying substantially under the invoice listed on Edmund’s and got a couple hundred dollars’ worth of free options owing to the fact that the dealer had to do a swap to get the car in the color I wanted, and the swap had some more goodies that I wasn’t willing to pay for but was quite willing to accept at no cost.
If you can find one of these dealers and don’t like the negotiation process do yourself a favor and find a “true” no haggle dealership, be armed with model information, maybe write down or phone in the VIN to a service that can give you price and history.
One other tip – if you don’t have a trade and have your outside financing already buttoned up, e-mail multiple dealers in your area and solicit “all-inclusive, out-the-door” prices on the vehicle you want.
Whether you already got financing from your bank or you’re planning on financing through the dealer, you should walk in there and ask them what the cash price is for the car, also known as the “out-the-door” price.
One trick I’ve noticed here in Arizona is that they advertise vehicles on eBay for a certian price, then when you call they say, “sure, that car’s right here on the lot!”, but when you come down it’s always “just been sold by another salesman”, and they try to upsell you on another vehicle.
The dealer has tools in their pocket, asking you questions about things in this order, what vehicle, what kind of trade in, then “payments”, then the vehicle price, then surprise you at the end with dealer fees.
Does anyone know if buying from a Ford dealership using their X-Plan is really a legitimate way to avoid all the nonsense as described here? Supposedly if you can get an X-Plan pin number, you can get the vehicle for a significantly lower price than through haggling, no extra dealer fees are tacked on, and you are still eligible for any incentives that are in effect.
That’s close enough, right?” They’ll nod their head (another psychological trick to get you to agree), and almost every time the person says “Yea, that’s fine!” The problem is, they didn’t realize that a $10 payment bump over a 5-year loan nets an extra $1k in profit for the dealership.
@kenposan: The last two cars I’ve bought I told them that if they didn’t remove the dealer name sticker and the license plate runner advertising the dealership I would walk (and i was serious about it).
I had my eye on one sedan in category 1 (lowest kilometers)but concentrated the dealing on the two category 2 cars, got it down to a very nice lower price with a couple of the ‘back-and-forth’ trips to the manager, discussed financing, down payment and monthly payments through the dealer,etc.
We went through a couple of rounds of haggling, then I noticed on their form to get my price down there was a first time buyer discount, and a factory rebate for nearly 4 grand, I was like, ‘where did this come from’, and they were saying that they were trying to make the deal work, I cried B.S. about them wanting money down and trying to screw me out of 4 grand, and got ready to walk.
Now, lets say you’ve got a problem with the trade price, as well as the other figures (other than price.) The salesman (and manager) will probably agree to whatever price you want for your trade, within reason.
At the heart of it all is the “4-square,” a sheet of paper (sample above) divided into four boxes: your trade value, the purchase price, down payment, and monthly payment.
Grown men will melt and sell their souls for a briefcase full of 20-dollar bills, even when what they are getting is half of their asking price.) I just kept pointing at my “firm” price soaped on the windshield, and told him I’d seen much more cash than that before.
A good place to look is at the web forums, sometimes you’ll find an employee from a dealership will post the real dealer price sheets.
Will you accept this offer?” 4 out of 6 dealerships tried to get me in or came back with a higher price, but 2 said, “yes, we agree.” I responded that, pending a test-drive, we’ve got a deal.
What were you looking to pay on the car for payments?” You respond, “I didn’t plan on paying that much, must less more!” The salesman will pause, hoping that his last line will sink in a bit and you’ll either acquiesce to the current number or offer something higher.
If you are able to make early payments, there’s usually money to be saved by going with a simple-interest deal, but you should really look at each loan on its own merits – sometimes the dealer financing *is* a better deal, particularly if you can’t make early payments and the manufacturer is subsidizing a ridiculously low interest rate.
If you want the difference to be $5,000, it doesn’t matter if the dealership writes the purchase order as Trade value = $100,000 or trade value = $1, as long as the total price on the bottom line is $105,000 or $5001.
Your pre-approved remember, when you close the deal, they will write the invoice up such that if you don’t bring in your check from the credit union within a week to 10-days then you’ll automatically get a dealer financed loan.
If you are interested in a Volkswagen, definitely ask “Will you order what I want, for the price negotiated?” If they say no, or tell you they can’t do custom orders, call someone else.
Another thing I do is go to carmax and get their no haggle offer on my trade in and make the dealer I’m really working with give me at least that price.
Pick a vehicle you would buy, write the VIN on the contracts and tell the dealer to write on the back of sales contract (the true legal purchase form you will be signing) every fee EXCEPT the vehicle cost as a line item with the words “dealer determined fee” or “exact fee required by law”.
I punched in some numbers and found he was really trying to rook me over on the deal – 15% interest? On 50% down? That’s all they can do? Well, we got the car for a VERY good price but really crappy financing terms.
I then went to the dealership, and when I was ready to negotiate, I told them how much I wanted to pay for the car (I had a check from the credit union on me already), which was actually the price that Consumer Reports said the dealership paid for the car.
You don’t have to deal with scummy salesman, only people on your level – people who have as much experience buying and selling cars as you do – and most importantly, people who either aren’t smart enough or don’t care enough to scam you.
Let them go to the manager and “work it out”, I did this and stuck to my guns – I ended up getting the car for $20 less a month than the other dealership as an “incentive” for going to them.
After getting suckered a few times we learned to get financing beforehand (never had to use it because the dealerships always managed to find a lower rate, they wanted the business more than our finance company) and focus intently on the asking price and base all other negotiations off that.
Once you’ve got the trade in and purchase price where you want them, then you offer to let them beat your pre-approved financing.
Most people, at this point, will write the check – if the salesman is good enough with the snow job, people will honestly think that they’re getting a good deal and that they need to do everything they can to get the manager to cave and sell them the car for next to nothing.
After hemming and hawing, Mr Salesgenius says something like “wow, thats a LOW price, you’re already getting a REALLY GOOD PRICE here.” As if, apparently this will prevent me from future negotiations.
I worry when I hear people say, “I got it for $X less than MSRP!” – you should NOT be negotiating down from MSRP, but up from the invoice price.
Last time we bought, he sneaked a 10.9% interest rate into the contract when the agreement was for 4.9% (he then blamed the sales manager for the mistake even though the finance office prepared the contract), then he doubled the value (and tripled our cost) of an extended warranty, pure gravy for the dealership had we not noticed.
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We analyze millions of currently listed and recently sold cars to determine the Instant Market Value for a vehicle based on year, vehicle condition, trim, mileage, transmission, options, region and other factors.
Mechanical problems or maintenance issues that the mechanic finds may determine whether or not you buy the car, and the mechanic’s report may provide you with the necessary leverage to negotiate a lower purchase price.
Ultimately, make sure to go into the buying process with an open mind, considering both new and used cars and running the numbers before making your final decision.
Be sure to always negotiate based on the purchase price of the car, and not the monthly payment.
Also, if you are considering buying a new car, your goal is to find the “invoice” price of the car, not the MSRP.
The sticker price of the car might be cheap, but insurance costs could cancel them out.
Auto Trader, Consumer Reports, Kelley Blue Book, and the Yahoo! Autos section are great places to start researching cars in your price range.
If you have a trade-in worth $2,000, the dealer might offer to give you the car for $20,000 plus the additional $2,000 for the trade-in, for a total purchase price of $18,000.
For example, the Honda Accord, Honda Civic, and the Toyota Camry are favorites among car thieves because of their higher resale values, and the insurance premiums for these cars can thus be more expensive.
Factor costs for car insurance premiums into the purchase price of your car.
In the end, buying a car is a major purchase, and it’s important to research each and every aspect of the process.
My Honda Civic has always been a pleasure to drive and cheap to insure too.I would say that buying a car that’s expensive to insure is the top mistake.
For example, let’s say you’re looking at a $22,000 car and the dealer’s rock-bottom price for the car you’re considering is $18,000 (although he won’t share this information with you).
There could be many extra, hidden costs factored into the price including various taxes, car preparation and delivery fees, and dealership costs that you won’t know about unless you ask.
Your bank or credit union is one of the best places to start researching car loan rates, and you can obtain “relationship discounts” that you won’t find anywhere else.
If you hadn’t mentioned your trade-in, you could have negotiated the price down to $18,000 and then told the dealer about the trade-in, resulting in a final purchase price of $16,000.
If you do decide to buy a car online, you’ll still want to test drive the car and have it checked by a mechanic to make sure there are no issues or problems.
The extended car warranties offered by dealerships are expensive, and, even worse, the coverage is often very limited and doesn’t cover the costs of many types of mechanical failure in new or used cars.
Sports cars have higher premiums than conventional cars, but some cars have higher insurance rates for other reasons as well.
If you’re planning to buy a used vehicle, it’s important to have the car thoroughly checked out by a mechanic before you finalize the purchase.
Consider this: A salesman on the showroom floor is trying to negotiate the highest price possible, since his commissions are based on a percentage of the sale price.
If you are considering buying another car before your current vehicle is paid off, you need to seriously reassess whether or not you can really afford to buy another car.
Do everything you can do to negotiate the car loan and knock the purchase price down.
Also make sure that you know the “full” purchase price of any car that you buy.
If you’re buying a new car, the car should come with a manufacturer’s warranty that provides ample coverage for your vehicle.
Seriously though, in addition to serving as a Credit Sink where you can spend Simoleons for some fancy rides, it is also a venue that has been used in the past by advertisers – car advertisers – which means every now and then you may find a free ride there.
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Car makers here aren’t allowed to make such bold claims, but in the build-up to budget brand Dacia’s launch in the UK in January 2013, the company was keen to point out its "clear and straightforward" pricing policy and suggested that the price you see would be the price you pay, with no room for negotiation.
Is it desirable red, or vibrant pink? And is it the only car of its type you’ve ever seen not to have alloy wheels, electric windows and air-con? They are all items owners of other models will have paid extra for, so are negotiating points on the price.
Cognitive scientist Art Markman explains: "Unless you know the real value of the object, you’re unlikely to adjust enough." So the first lesson in haggling over that new motor is to know its true value, so you’re creating your personal anchor before negotiations begin.
It’s still worth looking at price guides but there are other clues to a car’s true price and whether or not a dealer will be ready to negotiate.
In other words, when a car dealer puts a price sticker on the windscreen they are setting the anchor.
According to Autotrader’s research into haggling, men negotiate an average of £323 more off their car’s price than women.
The vehicles in the showroom can be driven, but Carl needs to break a window to get them out of the building; to avoid damaging the cars, a shotgun blast is sufficient to break the glass (smaller guns and Carl’s fists aren’t strong enough).
Unfortunately Carl cannot use Wang Cars as a "garage" to save vehicles of his choice, though the vehicles obtained through missions that spawn inside are relatively rare.
Completion of the missions will reward the player with new vehicle spawns in the showroom (always vehicles obtained during the missions unlocked by the purchase of the lot) and the business as an asset will generate a maximum of $8,000 per pick-up once a series of missions are completed related to it.
A Pay ‘n’ Spray and a Transfender are located adjacent to Wang Cars – indeed they are part of the same compound – but are not considered part of the business so when Carl buys Wang Cars he is still charged for using the two services.
At some point after Carl purchases Verdant Meadows, Wang Cars becomes the staging point for the San Fierro legs of the race tournaments.
When he arrives in San Fierro, Carl Johnson realizes he has been tricked into accepting an abandoned garage in the industrial neighborhood of Doherty as his prize for beating Claude and Catalina in a street race.
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In addition to Caldwell, Bragg and Olsen, at the table were: Larry Dominique, executive vice president at; Jared Rowe, president of Kelley Blue Book, which operates, and Jake Fisher, head of auto testing for Consumer Reports, who is involved with the magazine’s pricing data and who buys from dealers the cars the publication tests.
"It tells me that (automakers) and dealers responded to the publishing of invoice pricing online and said, ‘We need to find another way to mask what (dealers) are being paid so that people don’t feel like they’re getting screwed,’ " says Patrick Olsen, editor-in-chief of and a roundtable participant.
This example uses actual sticker, invoice and holdback amounts, but then subtracts hypothetical rebates of the sort often given to dealers, showing how the true cost to dealers might be much less than the invoice price that’s the popular benchmark for car shoppers.
6 experts tell you what to watch out for: Jessica Caldwell,, James Bragg, Fighting Chance, Jake Fisher, Consumer Reports, Patrick Olsen,, Larry Dominique, and Jared Rowe, Kelley Blue Book.
But perhaps surprisingly, given how often they use "invoice price" as a touchstone, many brand-name online car shopping sites tend to agree with Bragg’s dismissal of that price.
In fact, at least one shopping expert argues, neither do some of the online services that a lot of people count on to guide them toward the best price for the new cars they crave.
The dealer’s actual cost for a car — which will determine a price you can negotiate — may be much lower than the so-called invoice price because of undisclosed rebates from the maker.

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