How to Steal a Car! Well sort of.

Updated: Nov 24, 2019

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The Dealership Experience

Personally, avoid the dealership. The only constructive purpose of the car dealership is to test drive a real car. Don’t buy the car at the dealership.

Know your credit score! Pre-arrange your auto financing. I once got a great deal because I walked in with the check written from my credit union. I negotiated as if I had cash in my pocket. Sorry, Mr. Salesman, I only have $16,800 in my pocket. Not a penny more. I left with a new car.

At the beginning of the negotiations, get a number proposal from the salesman. When the salesperson returns, ask them, “Is that the best you can do?” When the salesperson returns…Look at the number, shake your head and say, I’ll have to think it over. Go through the awkward meet the manager routine and LEAVE the property. Come back a month later preferably at the end of the month and test the same model you like again. Repeat this as many times as can to wear the dealer down and not the reverse! Shop at the end of the model year to secure better deals and higher rebates.

The chore of buying a car is work!!!

I have to Buy a Car from a Dealer

Take your time purchasing your next car. Do the research. Investigate alternative dealers, cars and lenders before stepping on to a car lot. It’s all online. First, find the value of your next car through Kelley Blue Book www.kbb.com, and Edmunds www.Edmunds.com. NADA is another resource, http://www.nadaguides.com/Cars. Check out Carvana.com and Vroom.com to get a feel for how much you will spend on the car of your choice. If you are brave, use one of these trendy services. The downside is that you have no opportunity for negotiation. The price is the price. You do not see the car in advance. You should reserve this method for mature audiences. 😊

Second, negotiate the financing in advance before walking onto a car lot, with a lender separate from the dealer. Go to your credit union in advance and get pre-approved. Do not rely on your lender to approve you for a realistic loan amount based upon your budget. They will pre-approve you for an unrealistic high loan amount unrelated to your needs. Lenders are in the business to make money, not help you with your budget! Make sure you plan your auto expense budget in advance. In 2010, they approved me for $40,000. I spent $16,800.


📷These are my cars. I bought the Hyundai Sonata new in 2010 after the 2009 financial crises for $16,800 with a credit union check. Both cars are paid off with lots of life left. We will pay off the mortgage on the house in the background in 7 years, Lord willing.

Do as I do.

Get a great interest rate when you finance a car. They base your interest rate upon your credit rating. Know your FICO score. Order a free copy of your credit report before you go shopping. https://www.annualcreditreport.com/index.action

The auto lenders use an “Auto-Enhanced” score which looks at auto loan specific risk. It is ok if this looks different from your regular scores.

Get copies of the three credit reports at no charge. Insist upon https://www.annualcreditreport.com.

Third, learn how to negotiate and buy a car at a price below its (depreciated) blue book value. (Should you go to negotiating school first? Check-out discover.scotworkusa.com to take a negotiating class. Find a financial coach in your area who will aid you in the car buying process) Remember the seven best words in the world. “Is that the best you can do?” Put the dealer on the defensive. I can assure you that salesman take negotiating and sales classes to improve their bottom line at the cost of your bottom line. “Money does not care who it belongs to.” A good salesman sees that “their” money is in your pocket. They will use every “professional” trick in the book to lighten your purse as much as possible. Take notes during the negotiation phase. You will refer to them later and this puts the salesman on notice; Don’t fool around with this customer, they write everything. Negotiate each part of the deal separately. What do I mean? Do you have a trade? Negotiate the trade separately from the car purchase. Research the value of your trade online. I negotiate the purchase of the newer car first as if I have no trade. If I have a trade, I sell it to a private buyer. It is a hassle, but you will receive the retail price for your trade. This assumes the car is in good shape. If your trade needs a little mechanical or body shop makeover, then a trade could be beneficial to you and the dealer. The dealer can repair your well-worn trade at wholesale in the company garage. Bring the trade in after you have a signed contract for the newer car. A reputable dealer will honor the new car contract and give you a good deal for your trade. You risk another round of intense negotiations using this method and ultimately, no deal. This method is for the seasoned car buyer. An alternative is taking your trade to CarMax and sell it outright for cash. I have done this and experienced a smooth, fair transaction.

The dealership will want to combine everything into a nice neat package for “your convenience”. New car, trade-in and financing wrapped up in a neat little package. The package method is not for your convenience, The package method is for their largest profit. Fourth, learn to be unemotional during the negotiation phase. The dealer will try to convince you that the bar you are buying is the last car on the planet. It is not. The dealer will explain that your research is flawed. I have heard statements, “Well, Kelley Blue Book is not here to buy your car” which means KBB’s numbers do not show the local market. True, the dealership is not bound by any external auto appraisal service. Don’t trust the dealer statement, “Here is the invoice, and you are killing me with such a lowball offer! If I honor this deal, I will have to go out of business.” That statement and the invoice the dealer shows you is a joke. Dealers receive monetary incentives behind the scenes that never make it to the invoice. The invoice is a good place to negotiate down.

If this dealer is not in the mood to make a deal, fine. Find a different car at a different dealer. WALK. It is the best negotiation weapon. NO DEAL!

Know what you can afford and don’t budge. Everyone in the car buying process will encourage you to “Live a Little”. This means, you can afford to spend “a little” more. It won’t hurt. Don’t cave. Stick to your budget.

📷

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Ken Remsen has passed a criminal background screening

Candidate AFC®, Association for Financial Counseling and Planning Education

Member, American Association of Daily Money Managers

Insured, Lloyds of London

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