First time car buyer

[Alishe]

I bought a new car, worse decision of my life. 5 years later, when you're done paying it off, enjoy the fact the car is worth only a small portion of what you paid for it to begin with. From now on, 5+ year old used cars for me.

[Melena]

As a person who got suckered hard core on my first car, here's some advice that I used when I bought my second car in 08.

1. Question the APR. My credit was near perfect, only blot would have been me having a shitty job at the time. One place tried to hit me with 8.9%. I told them my credit was close to 700 so they could either offer me a better APR or I walk before any negotiations.

2. Check multiple dealerships. I got two into a pissing match where they both kept knocking about 100-200 dollars off every time I got a new quote from a competitor.

3. Try to get buddy buddy with the salesman. The guy I ended up buying from showed me his cheat sheet with the dealer costs on the car (before dealer rebates) so I was already able to start low with the other guy.

4. Bring someone experienced with you. If I did this on my first car, i would not have paid over blue book on a used with 18% interest (no credit at the time).

What eventually happened to me was the car I wanted they were going to have to truck in. The manager found out, and asked me (with the salesman there) if I'd take the upgraded version with the Satalite Radio & GPS. I wasn't interested, but I ended up walking out the door over $2000 cheaper then sticker before factoring in tax and dmv with a 4.85% interest rate. Overall with all the discounts if you factor in taxes and state fees, probably closer to 4-5k.

[tyven]

people saying buy used are people you should listen to

[toonces]

like some have said, buy used. You can buy a 2010 car used if you look for it. Buying new is for super rich ppl that don't know any better.

[Diamicles]

I bought a new ____, worse decision of my life. 5 years later, when you're done paying it off, enjoy the fact the _____ is worth only a small portion of what you paid for it to begin with. From now on, 5+ year old used _____ for me.

Fill in the blank with something where this isn't true.

[willriker]

I bought a new White Woman, worse decision of my life. 5 years later, when you're done paying it off, enjoy the fact the white woman is worth only a small portion of what you paid for it to begin with. From now on, 5+ year old used white woman for me.

.

[Guitarman]

thanks for the tips everyone, definitely things ill have to look into. is MSRP the base price i'll be paying? I've done some online price comparisons and the price has always been very similar (within 200 dollars or so).

[Kilhart]

Fill in the blank with something where this isn't true.

Real estate? <_<

[Pirian]

like some have said, buy used. You can buy a 2010 car used if you look for it. Buying new is for super rich ppl that don't care.

ftfy. Like other ppl said, buy used. With interest rate on the loan you're going to be paying so much more than you should on a car that you most likely will flip right when the value bottoms out

[Sylvrdragon]

TAKE YOUR TIME! Seriously this is huge. Remember there is no rush what so ever for you to get this car, so don't let them set your pace. I got caught like that myself. I let them get me all excited and wound up dropping a down payment before i knew what was happening. Tho i do love my car lol

This is huge. I worked at a dealership for a while and I would chat with the dealers during the down time. They called this "Getting caught in the whirlwind" or something like that. People both overestimate, and underestimate this process.

A lot of people don't believe that anyone will actually sell them a car, or that it will be wrought with obstacles the entire way. This isn't true. In fact, they have the system fine tuned to the point where all you really have to do is sign stuff and sit around and wait while the finance guy haggles with the bank over the phone to get you a loan. It SOMETIMES takes a bit of time, but it certainly doesn't take much effort on your part.

The other thing people do is assume that the dealer has your best interests in mind. These guys are just like politicians. They'll smile at you, shake your hand, crack jokes, suck up, and pretend that they're giving you inside information. Hell, they'll even remember your name in the event that you don't get this done in a single day. Always assume that they are out to get more money.

As has been mentioned, the "invoice" they might show you as you try to haggle them down is bullshit. This isn't the real price that they paid for that car. Even if they show you the REAL price they paid for the car, that doesn't mean they won't go lower. The way the dealership that I worked for made money was, in addition to the money they made from sales directly (selling over invoice etc) they got a flat rate from the manufacturer for each car they sold depending on which tier they were in.

What this means is, they start out at maybe $100 per sale. If they sell 50 cars that month (completely made up number), then they get $200 per sale instead and further into higher and higher tiers. This means that if your sale is about to put them over a tier, they'll gladly take a loss on that particular sale just to boost their numbers.

The way you can use this is: shop for your car at the end of the month. Go to a ton of places until you find one that needs your sale (or close to it) to break a tier. Now, they aren't going to just TELL you if you're at that point, but you'll know based on how low they're willing to go. Basically, just keep trying until someone is willing to take a loss to sell you that car.

The downside to this is, it might take you several months. If you're in more of a hurry than that, then you can try to go a few days before the end of the month where most places are HOPING to get to a new tier and might be willing to give you the car for cost (or just over).

Oh, and as other people said, be wary of the extras they will try to sell you. Those are also a major source of a dealership's income.

[Skjie]

Don't let the salesperson know which car you actually want. Be interested in another car and haggle for it, make it clear you're settling for the other car and you'd really rather be elsewhere. When I had to buy a car in a rush after an accident ended up buying the car for barely more than auction value, knocking 40% off the price.

[Bikpik]

If you do find a car you like, or a couple, and the dealer won't budge on the price, leave your contact info and the price you want to pay, and tell him to contact you if/when he can come down to your price. Some places will come down to your price if they are low on numbers for that week/month and call you up for a quick sell.

[Skjie]

End of the month/week/night. They want to bump up the days numbers and bit and will be willing to do better deals.

[BunkMonk]

Ask to see the invoice price on the car. This will show what the dealership has paid for it, so you can tell whether or not they're ripping you off or not.

Pretty certain they have to show you, at least in CA, but if they balk at showing you the invoice, you might be better off walking away. At least to me, that would make it seem like they have tacked on an obscene amount of money.

When I bought my car, I actually did all of my searching online, and contacted a few dealerships via email to see if they had the car, or had the means to get it. The only thing I did at the dealership was my test drive and paperwork. Didn't give the salesman a chance to talk me into any shit I didn't already want.

I ended up paying just a few hundred dollars over invoice, so I'd say I did pretty well for myself. :3

[Mojo]

Like others have said, you should consider buying used. Buying a new car is an extremely dumb idea unless you get paid a respectable wage. In addition to paying a fuckload more money on just the base price of the car, you will end up paying thousands more to insurance. Newer cars have higher premiums and you will be required to pay full coverage insurance throughout the course of the loan. For instance, my friend took a loan to pay for his new car. He pays $377 per month to his loan and another $145 to insurance. He's over 25, so this would actually be around $170 for someone under 25. To keep the same car, a younger person would need to pay about $544/month.

I bought my car used. It's not the best car, but it's far from the worst (2001 Honda Civic.) I didn't have good credit at the time, so I had to take out an auto-loan with a cosigner. My car payment was $213/month and my insurance was around $160/month for a total of $373/month. After a few months of this, I took out a line of credit with a cosigner and used it to completely pay off the loan. I don't have a car payment and the insurance premium dropped to around $80/month. You would only really be able to manage that with a new car if you made a lot of money or hoarded up a bunch of Stafford loans. I do have to pay to that line of credit, although the minimum payment is only $25 (I pay more though because I don't want to be in debt.)

So yeah... $544/month vs $105/month. If you make a lot of money, then by all means buy a nice car (gotta use that money for something.) However, the title of the thread indicates that this probably isn't the case. Buying a new car when you can't afford it is nothing short of idiotic. My friend still lives with his parents because he can't afford to move out... Obviously a huge mistake. Don't repeat his mistake.

[MisterBob]

A big thing when buying a new car is, if possible, put down more than half of the car if you can. If you can't reconsider your financial situation, perhaps you can't really afford the car.

I did this recently, and was able to secure a 3.1% APR loan with my credit union, as opposed to the 6%-ish I would have gotten otherwise. For banks, it's a win win, since if you default, they get the car and can likely sell it for net gain (+ whatever you already paid in loans).

[jmc]

I don't know about you guys, and where you live....... but here in MA 2010 used cars are around, but the price isnt too much a difference and banks here have used car loans that have a higher interest rate than a new car loan. By a margin of about half..... when I was looking at a used 2007 Legacy Spec.B my interest rate was gonna be 7.8% from a credit union (national chain banks were higher) and when I settled for a new subaru my interest rate came out to 2.9%....... so ya

[archibaldcrane]

thanks for the tips everyone, definitely things ill have to look into. is MSRP the base price i'll be paying? I've done some online price comparisons and the price has always been very similar (within 200 dollars or so).

Oh jesus you need more help than I thought.

Go to truecar.com

Enter the exact car you're looking at.

Do not accept anything worse than a price in the "great price" range. You'll notice that this can be thousands of dollars below MSRP for many cars. Do not listen to any dealer who will tell you this is impossible, that the car you're after is too specific, in too high demand, etc. etc. to get it at that price. Walk away. Leave your phone #, tell them if they are interested in selling at X price, to let you know. And wait.

For example, during my car buying odyssey last summer, I got a new 2009 MSRP $19,630 Pontiac Vibe for $15,100 (before taxes).

Truecar.com is your key.

What kind of car(s) are you looking at? What price range? Are you financing or paying straight cash? Generally speaking I recommend people to get new cars in the June/July months, as the current model year is ending and the dealer incentives to move them are high. But if you're buying now, use truecar.com as your bible.

[Amastacia]

- Don't buy new unless you can pay in cash. If you have excellent credit and can get a lower interest rate than you can earn by investing that cash, finance the car, invest the money, and come out ahead. If you are not going to get a good interest rate, plop down a check. If you can't write a check, consider buying a less expensive used car.

- You can always walk away. No matter what. No matter how much you want it, no matter how hard the salesman is incenting you to buy on the spot, no matter how good the deal looks, you can always walk. This is by far your biggest tool, and your strongest weapon. They CANNOT make you buy a car, and most salesmen will take a smaller commission over no commission, even if that means coming back with an offer after you've walked away.

- Make sure you test drive the car you want to buy, do not let the dealer talk you into test driving a higher trim level, a different model, or even another car of the exact same type. The only exception to this is if you intend to use the strategy of "you don't have what I want" to extort an additional discount (e.g. you really want a blue car, and see they have one on the lot, but don't have a red one, so be insistent that you want a red car, and negotiate a discount to take the blue one instead).

- Research online... try to get the actual invoice price of the car, the invoice price of all options, and all dealer fees in your geographic area. And figure out all taxes, as mentioned above. Understand your exact out-the-door price if you pay what they paid, and start even lower than that.

- Understand that the invoice price is not the real price the dealer paid unless the car's been on the lot more than 90 days. Almost all manufacturers (excluding a few luxury brands like BMW, Audi, Porsche, Jaguar, and Land Rover) pay a quarterly holdback, which is done for a number of reasons, but the end result is that even if you pay invoice or less, the dealer is almost certainly still making money, and the salesman is still getting a commission.

- Have several "Plan B"s. If you can't get the car you want at the price you want, have alternatives. Don't get married to the idea of owning a particular car. That doesn't mean you can't have a favorite, but most competing cars these days are pretty close, and be willing to settle for an alternative if you can get a significantly better deal on a nearly-as-good car. Good enough at the right price trumps slightly better at an unreasonable premium (paying a little more for a car you want a little more is fine).

[jmc]

I didn't see anyone mention it

but NEVER LEASE a car.