Originally Posted by Speedy1975
My advice for what it's worth, and I've bought several brand new cars....
Things in dealerships will be done in stages.
Stage 1 - The salesman - he talks you into buying the car, gets you excited about ownership, and will try to have you imagine yourself driving and owning the car. He will banter back and forth with his "Sales Manager" and pretend to be on your side during these negotiations. A 4 square worksheet will likely be used. This is where you'll work out your purchase price + any options and addons like mud guards, floor mats, whatever. If you're trading in a car during this Stage be sure to treat that as a separate transaction. The numbers will get fuzzy very quickly, so you'll want to know two things: A) what am I paying for this new car? B) what trade in are you giving me for my car? Don't let them roll it all together.
If you're not trading in a car, then just focus strictly on sale price OTD (out the door). Remember, you'll be paying for the car + tax + title +license + doc fees charged by the dealer. These "doc" fees are silly fees and can vary by as much a $200 - $300 per dealer.
Your best bet all around is to shop 3 dealers and get three quotes on the car you want. Get the three dealers dealing against each other to make you the best deal and go with the best deal.
Never go in saying you want your payment to be XXX.XX / mo. This opens you up to a 6 or 7 year loan and you'll WAY over pay. Always stick to the total OTD. Take a calculator. I've caught sales managers in number tricks several times because I had a calc on hand to check the math. Once they realize they can't screw with you, you'll get their bottom line deal and no more games.
Going through the internet usually garauntees a better deal as the internet salesman will assume you've done your homework and know what others are paying.
Stage 2 - The Finance Office - This is where you'll work out how you're paying for the car. This is also where dealerships make a TON of money. If you're going to finance the car, shop around with your local banks to find out what interest rates you'll qualify for. Beware of any and all additional crap the finance officer will try to talk you into such as extended warranties, payment insurance, clear coat protector, fabric protector, etc. Most of this is just garbage to increase over all profit. I never buy any of this stuff, you'll have to make that decision on your own whether it's worth it or not. If you're buying loan insurance you probably can't afford the car anyway and should wait and save more for your down payment.
Beware of rolling any of the extras you decide to purchase into the amount financed. Say your extended warranty is $2,000. The loan officer will try to tell you it's only $32.38/mo if you roll that into the loan. The problem is that then you're also paying interest on that $2,000 warranty making it even more expensive. If you want extras, pay cash for them as part of the down payment.
Double check every single number on every single piece of paper you sign. I've been in the middle of deals before where I've found typos on the number of years for the loan, the interest rate, etc. It'll be a lot of papers, so take your time.
Avoid financing anything longer than 48 mos. 36 mos is even better unless it's some special at 0% interest. The problem with stretching out the loan more than 48 mos is that you end up upside down in the car very quickly unless you plopped down a huge down payment, and if you were able to do that, then you should be able to shorten the term to 36 mos.
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