I have driven a dirty black Dodge truck for the past 10+ years. In that time, I washed it only about 20 times total. Yeah, I'm gross, shut up.
I loved my truck so much. Then it overheated on the 405 Freeway a week ago. (Yes, the same freeway O.J. Simpson had his famous white Ford Bronco low speed chase on.) I decided it was time to make a change, so I broke down and bought a brand new Toyota Prius!
Yes, I joined the electric car idiot gang. SHOOT ME.
I just could not resist 44+ MPG! I also couldn’t resist the absolutely great deal I got on the car. Here's how I did it.
Know exactly what you want before you go anywhere.
I did at least 10-12 hours of research online before I ever set foot in a dealer. I decided on the model I wanted, the trim level, and the price I wanted to pay.
I went to a Toyota dealer at least 5 days before I planned to buy the car I'd chosen for a simple test drive. I didn’t talk money -- I just drove the car, thanked the salesperson, and left. I didn't even look the dude in the eye -- CAR SALESPEOPLE ARE THE UNDEAD
Figure out what to do with your old car.
You aren’t going to get the very best price possible on your new car PLUS the maximum trade-in value for your old car from the same place. (You can't have your cake and eat it, too. So sorry, Miss Marie Antoinette.) It’s best to separate these 2 deals.
I sold my 2003 Dodge with 99,295 miles on it to CarMax
for $3200.00, which was actually high Blue Book value
! I went in, sat in the waiting room while an appraiser checked out my car, and got a 7-day price guarantee certificate for them to buy it from me.
I could have gotten $500 or so more if I were to sell it myself, but then a bunch of creepy Craigslist
stalkers would know where I live.
Find the “target price" you will offer dealers.
Say it with me: "I am not going to pay full sticker price for a car ever again." And why would you, smart lady? The sticker price (also called the MSRP) is a TOTAL JOKE.
Let’s use my recent 2013 Toyota Prius v three model
purchase to show you how to find your “target price” that you’re going to then offer to as many creeps as necessary until one of them caves in and takes it.
I entered the info on the model I was considering into the True Car
price calculator. It spit out a handy graph showing me what the market is like for this particular car in my area:
's suggested price estimate for the car was $26,617.00. That's already $1,593.0 off sticker. But that's just a starting point -- it's never the rock bottom price right out of the gate. With a little extra effort, you can always
beat a car buying service.
See where I clicked to see what 2 people paid -- the "below market" price? That’s how you find your target price. This info tells me that I should be aiming to pay between $25,391.00 and $25,594.00 for the car. But let’s not get ahead of ourselves -- we still have to figure out how to pay for the damn thing!
Figure out your own financing before you go one step further.
NEVER go to a car dealer until you have your own financing already in place. Unless you have near perfect credit, your local bank or credit union will always be able to beat the dealer’s annual percentage rate. I got a great rate from USAA
, which is a private bank/insurer for Armed Forces members and their families.
You care only about your "target price." All other numbers are a smokescreen to confuse you. What your monthly payments end up being is none of the dealer’s business.
Find an online payment calculator and run some numbers to see what you can actually afford purchasing. Bankrate.com
is a good one. And never
sign on for a car loan for a term longer than 60 months -- otherwise you will always owe more than the car is worth.
Generate as many leads as you can to make your offer to.
This is the fun part of the deal. (But only if you have balls of steel. If you don't, recruit a helper who does!) You will need to generate dealer leads any way you can -- by cold calling dealers in your area, emailing the Internet or fleet department managers at dealerships, or by using a paid service from either Consumer Reports Build & Buy Car Buying Service
or Costco’s Auto Program
Blanket these dealers with your target price offer. Do this via phone or email -- there is no reason to trudge around to every single dealer. I spent exactly 30 minutes at the dealer buying my new car. There is no reason to be at the showroom for 8+ hours. (Look up "Buyer's Fatigue"
and how to avoid it -- it's a real thing!)
Here’s the email I sent to about a dozen dealers:
Hello helpful car salesperson!
I am looking to buy a 2013 Toyota Prius v, three model. I have already test driven the car, so I am past the tire-kicking phase. I am looking to pay $25,493.00 for the car. I have my own financing already in place, so I am paying cash. I do not have a trade-in.
I can take delivery of the vehicle any time that is convenient for both of us. Let me know if would like to sell me the car!
Keep it short, sweet, and to the point. Don’t be concerned with interior/exterior color at this point. The dealer can find whatever you are looking for and have it sent to his dealership in a day or so. Don't get all starry eyed at the idea of driving home in the new car immediately. All we are concerned with right now is the actual cash price the dealer is willing to sell you the car for. Once someone agrees to your price, you can tell them the color combo you want the car in and ask them to find it for you.
PATIENCE IS A VIRTUE. There was a very dark point in my recent new car purchase experience where I thought all hope was lost, and that I would be stuck driving to a dealer almost 50 miles away and paying $25,795.00 to a salesperson who’d been a real asshole to me. But I kept turning over every rock and eventually found out about Costco’s car buying program. I entered my info online and a (female!) car salesperson called me within 10 minutes.
I told her thanks but no thanks -- I had initially dismissed Costco’s car buying service because it hadn’t immediately shown me the selling price.
She asked me my price, I told her, and she beat it by 31 bucks! I drove straight to the dealer after work to sign the papers. Once I got her to agree to my price, I hit her with the exact color combo car I wanted. She had it delivered to the dealership for me the very next day.
Why was the deal suddenly so easy? She knew I wasn't bluffing and could tell I'd done my homework, so she offered me the very best deal she possibly could, knowing I'd most likely move on it immediately.
I had many dealers scoff at the deal I offered them. Some were downright rude, dismissive and nasty. One of them said all huffy: "I don't deal with lowballers!" Whatevs, dude. They all pleaded with me that their "invoice" price from the manufacturer was over $27,000.00. YEAH RIGHT. That's a fairy tale.
The "invoice" price car salespeople like to throw around doesn't include the often multiple thousands of dollars that the manufacturer kicks back to the dealership based on the number of cars they sell. So ignore all that talk. Just politely re-ask them if they would like to sell you the car for your price or not. If they say no, hang up and WALK AWAY. Be patient and wait for your price. This part of the deal is a test of sheer will.
Don’t you dare become emotional and cave in -- if I hadn’t stayed the course and turned over that very last rock, I wouldn’t have gotten such a great deal! Someone will eventually take your offer if you can stand to sit tight long enough. I had a dealer call me a week after I bought the car, wanting to finally take my offer. Too late, dude. Analytical buyers will always pay less for their new cars than emotionally charged buyers.
Sign on the dotted line!
You should go into the contract signing already knowing what your TTL (tax, title, and license) is going to be, and have added that to the previously negotiated cash price. Now you will know your OTD (out the door) price! The bottom line price on the contract you sign should not be one penny more than that figure. Your state’s DMV will have an online calculator to help you figure out the TTL. (I went to the dealer with all my numbers written on the back of an old envelope!)
Have your numbers in hand before you go into the finance office.
Most dealers charge a small electronic filing fee ($30.00 or so), and every dealer will charge you a document fee for doing the DMV paperwork. This should be no more than $80.00. An inflated doc fee is how unscrupulous dealers pad your costs and line their pockets, so always ask what the doc fee is in advance. (I wouldn't do business with any dirty dealer who charges a $300.00 doc fee.)
If you are considering springing for an extended warranty, remember: it's negotiable, too! Toyota wanted $2,300.00 for theirs, and I paid $1695.00. Do some research and see what others have paid for it, and don’t be afraid to make an offer.
The signed contract! There is no legit reason why it has to be soooooo loooooooong.
Before you sign the contract and take delivery of the car, insist on seeing it in its original state with the window sticker still affixed. Make sure the sticker price matches the amount you originally negotiated from, and that the VIN matches both what the dealer promised you and what your contract states.
By law, the dealer isn’t allowed to touch or change the window sticker until you allow them to. The sticker doesn't lie -- it's the one part of the process you can trust.
Here are the final numbers on my car to help you visualize the deal:
MSRP (STICKER PRICE): $28,435.00.
MY CASH PRICE: $25,462.00.
DOC FEE: $80.00.
E-FILE FEE: $29.00
TAX: $2,298.78. (9% sales tax in Cali, OUCH.)
EXTENDED WARRANTY: $1,695.00.
TOTAL OTD COST: $29,819.53.
MY DOWN PAYMENT: $7,000.00.
TOTAL AMOUNT FINANCED/60 MONTHS: $22,819.53.
This deal put my payment in a range I can afford to keep up with for 5 years. I couldn't have even afforded the car itself, much less the extended warranty if I had decided to just cave in and pay MSRP.
Now I need your help: Should I buy these ridiculous hot pink rims
for my new car??
Ask me all your car buying questions in the comments. I’ll answer anything I know, and tell you when I don’t! Happy car shopping, smarties.