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Need Car buying or leasing advice

Lord_AsmodeusLord_Asmodeus goeticSobriquet:Here is your magical cryptic riddle-tumour: I AM A TIME MACHINERegistered User regular
To make a long story short, my old car, a 2006 Nissan Altima is going to have to be scrapped and replaced. I have a few thousand dollars in the bank and a credit rating near the low end of "Good" and I'm trying to decide what to get next. What I'm looking for is a model a couple of years old, possibly used, something for something with decent safety and ideally suited to handle heavy winters. Other than that I'm pretty open minded, but I also have no real idea where to start. Anyone have any general advice on where to start looking or some suggestions of what might fit generally speaking.

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Posts

  • zepherinzepherin Registered User regular
    edited March 7
    Start with a budget and a credit union. Credit unions have the best financing rates.

    Edmonds and Costco are great Resources for car buying, if you can give us a price range we can probably help you narrow down make and model.

    I’m not a fan of leasing personally, but some people swear by it because they always have a new car.

    zepherin on
    chrishallett83L Ron HowardElvenshaeschuss
  • Inquisitor77Inquisitor77 2 x Penny Arcade Fight Club Champion A fixed point in space and timeRegistered User regular
    edited March 7
    All of this is caveated as being my own personal experience having bought a car 2 years ago in the Bay Area. It is mostly geared towards buying a new car, not a used one (although some may still be applicable for the latter case). Expect to spend at least a week doing this. Buying a car is never going to be a one-day 2-hour thing. But you can generally front-load the work so that you only have to spend one day on the actual lot making the purchase.

    Preparation:
    1) Leasing is only good for people in particular circumstances - those who use their cars constantly and need to constantly update it to maintain a particular value signal. For example, I know a realtor who only deals with high-end real estate who leases the latest and greatest luxury car every year because he knows his clients expect it, especially if he's the one who has to chauffer them around. Otherwise, you are likely better off buying.

    2) Get preapproval confirmation from a local credit union that you can take out a loan at their offered rate for your budget. Walk into the dealership with that paper. You probably won't need it, but it gives you security in the sense that you never have to take the dealership's loan - they have to at least meet if not exceed the offer from the credit union, otherwise you can just treat it as a "cash" purchase within your budget, because the dealership gets all their money up front and you pay off the credit union instead of the dealership's creditor.

    3) If you have access to something like a Costco membership, you may be able to get a good deal right off the bat by starting with them. They will generally give you a starting price point that is lower than the standard rate. Note I said "starting price point". You should ALWAYS treat the price as negotiable. If you negotiate properly, all you're really doing with these memberships is leveraging them to save you time (e.g., spending 4 hours instead of 6 because you started at a lower price point).

    4) The old advice about "buying cash" is not really applicable unless you have poor credit. Most dealerships, especially those associated with major manufacturers, offer loans backed by said manufacturers. And those loans often have significant incentives to both the dealership (kickbacks) and to you (0% financing) that make taking them win-win, assuming you have the corresponding credit rating to get them. In other words, you can very well get a better deal taking the dealer's loan than trying to buy the car with cash up front.

    5) Have a specific car in mind. Decide the make/model, year, and options you want first. If you do not know, then go window shopping and test drive AND THEN LEAVE THE LOT. Do not buy a car if you do not have something specific in mind. This is incredibly important. The only way to guarantee a good deal on a car is to have negotiating leverage, and the only way to do that is to be able to say, "I can get the exact same thing or something very similar 15 minutes from here for lower than you are offering". If you walk into a lot with some vague idea of some vague car that does some vague thing, then you will likely overpay because you have no anchoring or leverage for negotiation. Remember, the sticker price on the car is set by the dealer to make as much money as possible - it's not there as an actual price they expect you to pay.

    6) "Last year's model", regardless of whether it is new or slightly used, is usually a pretty good deal. Especially if it's in the same manufacturing generation as "this year's model" - likely the only changes will be minor/cosmetic between those years, and there will be enough data out there to let you know whether that make/model/year is a clunker or not (e.g., a recent Honda Civic generation was so bad it was essentially mothballed early). Dealerships generally want to get those cars off the lot because the newer years make them more money. If getting a used car, make sure it comes with a manufacturer's warranty that is nearly (if not just) as good as buying a new car.


    Negotiation:

    1) Once you have the car you want to buy, find every single one of them in a 50-mile radius (or 100-mile, or whatever-mile radius is applicable to you in the sense that you'd be willing to go out there and buy the car from that lot). Email every dealer that has one of those cars, and tell them:
    • exactly what you are looking for (providing the exact car # from their lot is really helpful)
    • that you have secured financing from a credit union at X% rate
    • if you have a standing offer (e.g., Costco), tell them the standing offer; if not, ask them what their best price is for the car
    • request that any offers be "out-the-door" pricing
    • that you are also providing the same information and asking the same question to other dealerships, and note that they all have the exact same car in inventory as well
    • that you are looking to close a deal by a particular date ("the end of the week, on Friday")

    2) Make sure you clearly set any price negotiations as "out-the-door" pricing, including any necessary licensing and registration fees. Do not deal in any other numbers other than "out-the-door". Do not negotiate with someone who is unwilling to start with this basic understanding. If they can't even start with this guarantee then you can bet your ass they will continue to try to screw you as much as possible the entire time. It's not worth dealing with them otherwise.

    3) Wait for offers to come in. People will want your phone number. You can chat on the phone, but ALWAYS get any verbal offer confirmed via text or email. "OK, great, so $15,000 is your new offer? Can you text that to me real quick? Thanks!"

    4) Per my earlier points, very few salespeople in my experience cared how I was paying for the car. If they asked, I pointed to the credit union loan as a my cost guarantee - unless they could make a loan offer that was better than the credit union, the deal to them was equivalent to cash.

    5) If they want to match or beat the credit union offer, they will ask what your credit score is. There's no reason to lie here. Be up front - once they check, the cat will be out of the bag, and all you are doing is wasting everyone's time if they have to check it and then come back to tell you that you don't qualify for a deal they assumed would work based in a lie. Loan terms are not part of the negotiation. If the dealership is offering you a lower financing rate, then that's because they will make more than selling it to you straight up. If they offer it, great. If not, who cares, because you already have a loan secured that is within your budget.

    6) Once you get offers, take the lowest one, and then send it out to all your contacts. You will then get counter-offers. Make them negotiate against each other. When you get a better offer, take it to everyone. Wash, rinse, repeat. This will take time. Perhaps even days. But the benefit of this process is that no one is wasting your time sitting at an actual dealership - and all the salespeople know this, too. So they will respond when they don't have an actual human being in front of them. Which is fine, because you're off living your life, too.

    7) People will start dropping out, and once you get a final offer that no one is willing to beat, take the deal by confirming it in writing. Then set a date/time with the salesperson to buy the car from them. Make sure you buy it from them unless they are willing to hand you off to someone else themselves - these people work on commission, and this person just helped get you a decent deal, so no point in screwing them.

    8) That is, no point in screwing them unless they try to screw you. If you get any noise about additional fees or financing or some other bullshit, just walk out. That dealership did not deal in good faith. Just go to the other one that had the second-best offer. If you're walking out the door and they cave in, then fine. Otherwise, take your business to the other dealership.

    9) Similarly, doing all the paperwork takes time, and during all that time and signing papers they will try to get you to buy more stuff. DO NOT UNDER ANY CIRCUMSTANCES AGREE TO PAY FOR ANYTHING OTHER THAN WHAT YOU NEGOTIATED FOR THE CAR ITSELF. Just sign what you need to sign for the car itself. If they try to argue that something mandatory will cost extra, then they are pulling a #8 and you can just up and leave. Anything else they offer, whether it's the extended warranty or the super special maintenance plan, can always be purchased later. You can negotiate for that the same way you negotiated for the car itself (yes, you can buy warranties and maintenance plans from other dealers that are backed by the same manufacturer).



    ============

    For reference, I ended up buying my car for several thousand dollars under the sticker price with a 5-year 0% interest manufacturer's loan. I started with a ~3.5% credit union rate and a Costco price, and had 3 dealerships negotiate against each other. One dropped out pretty much immediately, but the other two went to war. One day in I had one guy tell me the other guy was flat out lying, and he was so pissed off he got this manager on the phone to have HIM tell me they were lying. This is why it's important to get things in writing - at the end of the day they can call each other whatever they want and say that the other dealer is full of shit, but if you have a text or an email it's a binding offer and they know it. The sales manager for the guy I eventually went with was so annoyed at the price that he asked to see the text from my phone, and spent the whole time bad-mouthing the other dealership for calling them liars.

    I suspect that everyone was lying, and if I didn't have the texts I would've been fucked once I walked through the door.

    Inquisitor77 on
    Three things in human life are important: the first is to be kind; the second is to be kind; and the third is to be kind.
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  • VishNubVishNub Registered User regular
    The above is more applicable to new cars, IMO. Pricing on used cars is usually firmer.

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