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Websites to Help You Get a Better Deal on a Car
By JLP | October 24, 2006
For most people, buying a car is about as much fun as going to see the proctologist. The two times that I have purchased a new car, I felt like I was being ripped off. I didn’t feel like I could trust the salesmen or the finance department. Part of the problem was that I had no idea what the car was actually worth when I went to see the dealer. BIG MISTAKE! Now days with the internet available, you can get a solid picture as to how much you should expect to pay for a new car.
There was a great article ($) in today’s Wall Street Journal by Jennifer Saranow that lists several websites that can help equip car shoppers with the necessary pricing information so that they can talk intelligently with car dealers. The sites:
AAA.com – website offers invoice prices, reviews, and car buying tips.
Cars.com – Offers invoice prices, reviews, vehicle summaries, ratings and recalls – pretty much everything that has to do with buying a new car.
Consumer Reports – most information is available to subscribers only. They do offer bottom-line car prices but they cost $14 per vehicle or $39 for a three-month unlimited subscription.
Edmunds.com – I have used this site many times and like it very much. Edmunds offers pretty much everything that Cars.com and AAA offers and it is all available for free. This is my personal favorite.
Kelley Blue Book – Another good website that in addition to the information included in the other sites, also offers safety ratings and something they call “New Car Blue Book Value.”
According to the article, when pricing cars, the number you are looking for is the price that the dealer pays (called “dealer cost” or “invoice price”) for the vehicle you want. Keep in mind that the invoice prices you see on the sites above do not normally include rebates or “holdbacks” offered by the manufacturer to dealers. You can find dealer incentives at AutoNews.com. A “holdback” is money that the manufacturer collects from the dealer and returns later (why? I have no idea), and can represent another 1% to 3% of the invoice.
In addition to this advice, I have some advice of my own:
1. Know what you want and how much you are willing to spend.
2. Secure your financing BEFORE you visit the dealer. You can do this either through a bank or a credit union.
3. Buy a financial calculator
4. Be prepared to walk out. Most people won’t go this far, but I can tell you that if you don’t like the deal you can get up and walk out. There’s lots of other dealers out there and there’s lots of other cars out there. Don’t let your emotions make the decision for you.
5. Don’t buy the extra insurance the dealer tries to cram down your troat. You don’t need it.
Those are just a few of my pointers. Finally, if it is just reviews you are after, don’t forget about Jalopnik, The Car Connection, and The Truth About Cars. I like all three of these websites although Jalopnik can be a little strange at times.
Topics: Cars | 7 Comments »
October 24th, 2006 at 4:28 pm
Great post. Be sure to check out the “Prices paid …” forum on Edmunds.com. People report there how much they paid for their car so you can see what is a good deal and which dealership is offering them.
October 24th, 2006 at 8:46 pm
The AAA site doesn’t work….
keeps asking your zip code, then
asks for a report on the problem
and doesn’t let you enter it. Par for
the course for AAA….
October 24th, 2006 at 9:48 pm
It’s not really that difficult. Dealerships don’t their money on the actualy car- the F&I guy makes it for them by financing your purchase and tacking on all the fun extras. You want a good deal? Shop the prices, or find a car broker to do it for you, adn have your own financing (or cash) in place BEFORE you go in to buy. Then you cannot over pay adn you know what your terms are from the get go. You’ll piss off the F&I guy, but if you have to finance a car, that’s the way to go. Personally I would not finance anything that will depreciate in value, that’s why I pay cash for my vehicles.
October 24th, 2006 at 11:07 pm
An odd story: a friend of mine who is a loan broker had a leased car from her biz that was at the end of its lease, so she wanted to buy it using a loan through her business. The dealership said the loan would be X%. She calculated the rate in her head and it was $100/month lower than the monthly rate the salesguy quoted her. The guy started lecturing her on amortization tables and such, so she whipped out her calculator and calculated it out, and her “in head” calculation was off by about $2/mon.
Then, the guy got mad and started yelling at her – even after she mentioned she’d been a loan broker for 15 years and knew a few things about loans…
October 25th, 2006 at 2:24 am
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October 25th, 2006 at 7:49 am
Another thing to consider is to look on places like CarsDirect.com which shows what the manufacturers are offering the consumer. It would be a waste to get a car loan from a bank at 5-6% when you can get it for 0% from the dealer, which my parents did recently.
November 12th, 2006 at 10:59 am
Edmunds and KBB are my 2 favorites…been doing alot of research recently, since I am leasing a new SUV in the next few months….Either the Nissan Pathfinder or the new Mazda CX9(out in January) are the 2 contenders….(have 3 kids, so 3rd row is needed)…
One thing I noticed is that although these sites arm you with valuable info about invoice price and MSRP, incentives et al, the pricing you will get from a dealer is really a factor of how “hot” the vehicle is….I suspect that demand wont be such that the public will be fighting to get the new CX9. Nevertheless, I have a feeling that my local dealer wont sell it to me in January for $1000 over invoice(my idea of a very fair deal) because it’s “new”…
This is the problem the public has been facing with the new Toyota FJ Cruiser….This vehicle is a steal in the fully loaded 25k price range, but because of demand, local dealers have been getting cut and marking it up $5000 over MSRP….shameful, and those who are buying at that price are suckers….