Car buying advice to my future self
I wrote this out in an online debate – preserved here for posterity
The main reason IMO for buying new, for me – (note, I’m assuming you’re doing to hold the car for ten years) when combined with the option of non-seller financing (and also paying cash if possible) is that it allows you follow a strategy where you maximize your bargaining position.
- Determine the car you want, do basic research and test drive without buying
- Call every dealership in a 100 mile radius asking for their “Best Price”, and asking them to call you back – tell them that you have financing and can buy immediately
- Not many will call you back, but of those that do get their best price if not financed with them and their best price if financed with them (David is very right about them selling the loan more than the car)
- Haggle as best as possible on the price of the car and the trade-in – be prepared to walk away
- Profit/Savings
Note, that most of the work is done before you step on the lot to buy the car. Also that you’ve reduced as many thing as possible to a fungible category, namely the car (every new car of the same model is the same), and the APR. You’re also attracting motivated sellers much more so than if you just walk onto the lot and start negotiating then.
That’s how I do it anyway
Note – step 2 is doing most of the work in the entire process