The Prepared Car Buyer (Car Buying Tips)

When I sold cars, I was amazed at how unprepared most customers were. Buying a car is a major purchase and requires a lot of research. Sure, you could go to a dealership tomorrow afternoon and buy a car, but without preparation you are guaranteed to spend thousands too much.

Take a second and consider all of the places in the car buying transaction were you either could lose extra money if you do things wrong or save money if you do things right:

• The selling price of the car you want to buy;
• The value of your trade-in;
• Financing options;
• Rebates;
• Warranties with service contracts.

Take all of these seriously. Let's go over each point briefly.

Selling Price

Some people actually pay sticker price while others negotiate a price near (sometimes below) the dealer invoice. In fact, there are situations where you are being ripped off even if you do pay invoice. The dealer invoice does not usually represent the actual price the dealer paid as most of us think.

Value of Your Trade-In

Some people have no clue what their trade in is worth. Always expect to get a lousy offer on your trade-in, but you should at least know what to expect so you can negotiate a higher trade value. Still, if you are completely unprepared and present a filthy car to the appraiser, you should have no right to expect much anyway.

Financing Options

There are hundreds of banks and lending institutions out there. If you shop around you can almost always beat the financing the dealer offers. The finance office at your local dealership does one thing that costs most of us anywhere between $1,500 and $3,000 extra and we don't even know it. This is detailed in The Car Buying Bible.

Try this. Go to the Car Buying Bible's car loan calculator. It was programmed by a former college math instructor and is one of the best tools you will find. Try to see how much your payment will go up if you add a few percentage points to your car loan. It's amazing to see the difference.

Rebates

Sometimes there are hidden rebates that you can get if you mention them to the dealer. Other times there are advertised rebates that the dealer is supposed to give to you, but might not. For example, the television ad might mention a $3,000 manufacturer's rebate. Every buyer is entitled to this. Some guy comes in who hasn't watch TV in a month, never mentions the rebate and doesn't get it. Why not? It's because the sales managers and salesmen are stuffing it into their paycheck. Do the math. The customer doesn't get a $3,000 rebate, so the gross profit is $3,000 more. A salesman earning a 20% commission on that profit would have $600 more in his commission check. It happens all the time.

Warranties with Service Contracts

Most people don't know what they're getting in the warranty because the contracts are too long to read in the middle of the long sales process. Many warranties are pretty useless and cost a thousand or more dollars.

Once you buy a car, there is a price for maintaining it. Unfortunately, because of conditions on most warranties and service contracts, most customers lose the benefit of our beautiful American free-market system. They are stuck with one option for all repairs -- the dealership. Of course, this is always the most expensive option. Even worse, scheduled maintenance at a couple hundred dollars every 3,000 miles, plays a major part into the expense of owning the car. Yet, this is the norm for most American car buyers. The Car Buying Bible discusses some much better options that allow you to get your car serviced by any certified mechanic.

Are You Prepared?

Are you prepared to face the car dealers at their own game on their own turf? Honestly, without the right car buying tips, most customers are doomed to paying the highest prices. Facing a professional car dealer is like challenging Tiger Woods to a game of golf. Tiger is going to win every time. So is the dealer.

That is... unless you are equipped with great car buying advice.

The Prepared Buyer

When I sold cars, a few of the customers were totally prepared. They were treated like royalty at the dealership and truly stood out. Why? It's because they were among the few who actually knew how to buy a car. The dealership would not dare to pull any tricks on these buyers because they would not put up with it. These buyers had all their information and went about the entire sales process differently than anybody else. In the end, they saved thousands of dollars. These people used great car buying advice to their advantage and are reaping the rewards. You could do this as well.

The author is a former car salesman and mathematician. His e-book, The Car Buying Bible: Your Guide to Saving Thousands on Every Car Purchase, is a 162-page car buying guide with step-by-step instructions to navigate you through the sales process. It comes with the best car loan calculator around.

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