Car Buying Tips from The Car Buying Bible

Avoid Window Etching at the Dealership

2006-10-25T08:49:00.000-07:00

It's great that you want your car to be protected from theft, but don't waste your money on window etching. In case you don't know what this is, here is a brief overview.

For a couple hundred dollars (I've heard of this costing up to $900), the dealer can etch the VIN number onto all of your vehicle's windows. This way, if your car gets stolen and disassembled, the police and your insurance company can figure out where the parts came from.

To etch the windows takes under 10 minutes. I've done it plenty of times myself. Basically, I would stick a decal onto the each window. This decal has the VIN number on it. Then, I would blot an acid solution over the decal. The acid would etch the VIN number into the window.

Here are my objections to the whole thing:

First of all, I have never seen any evidence that it is effective. I'm sure somebody could enlighten me as the pros and cons.
Second of all, if you pay the dealer more than $20 to get it done, you're being ripped off. Search the web and you can find do-it-yourself window etching kits for $20. As I said, it only takes 10 minutes to do. If you can put a decal on a window, blot an acid solution on top of it and remove the sticker, then you're qualified to do the job yourself.

Instant Respect (Car Buying Tips)

2006-10-21T21:50:00.000-07:00

I don’t mean this in a bad way, but salesmen are used to a typical type of customer. This is exactly the type of customer you do not want to be when you are buying a car:

UNPREPARED
UNINFORMED
EMOTIONAL

These customers typically walk into a dealership with no car buying resources of their own. They look to the dealer or the salesman to educate them about the inventory on hand. In the end, they pay the most for their cars. They get burned bad!

Here is the quickest way for you not to be mistaken for a typical customer. Do this and you will instantly have the salesman's respect:

Start with the reverse car loan calculator to determine the desired selling price to fit your monthly budget.
Do a lot of research into cars that fit your price range.
Get all the information you can about the type of car you want. Print out reviews, prices, statistics and whatever you can get your hands on.
Use a car loan calculator to figure out the approximate monthly payment for the car you want.
Organize your information so that you find the details to be easily accessible. Put it into a big three-ring binder. When I bought my last car, my binder was at least three inches thick. I knew more about the car than the saleswoman did.
Bring your thick car buying notebook to the dealer with you. Make sure the salesman knows that you know your stuff! When he sees your notebook of information, he is not as likely to play any typical games on you. Your car buying experience will be completely different from the unprepared buyer’s experience.

Car buying is a serious issue. If you approach it half-heartedly, you can still get the car, but at a much higher cost. Therefore, take the time to educate yourself and be careful to let the sales professional know that you are not the typical buyer.

If You're Upside-Down (Car Buying Tips)

2006-10-18T23:32:00.000-07:00

If you owe more on your car than it is worth, then this car buying tip is for you.

I had a customer who wanted out of his payment. The guy got financed at close to an 18% APR. That is quite high. He owed about $4,000 more than his truck was worth and his monthly payments were stretching his budget too thin. In car lingo, this is called "negative equity." His solution was to trade in his truck and buy something newer while hoping he could get a lower interest rate.

Here is the problem with that. Whatever vehicle he chooses will be bought with an additional $4,000 added to the price to cover the negative equity. It's normal to have negative equity for about the first two years of a car loan, but with the extra $4,000, this guy would be upside-down for at least three years or more.

What Should You Do If You're Upside-Down?

Do not try to trade in your car so that you could get a lower payment on another car. It will just make you even more upside on the next car you buy. This is a cycle to avoid.
Your best bet is to refinance at a lower interest rate. Use every possible resource to find a better interest rate than the one you're currently paying. In the case of this individual who was paying 18% interest on a $24,000 vehicle, his payments were around $660 per month and his total interest on the loan was over $13,600. If he could drop his interest rate to 15%, his monthly payment would reduce to about $620 and his total interest would be about $11,140. That's a reduction of about $2,460 in total interest charges over the life of the loan. Try my car loan calculator to run through different interest rate scenarios for your situation.
When refinancing, figure out how many payments are left according to the original loan. Make this the term on your new loan. So, if you have 30 payments left, get a 30-month loan. If you're willing to pay a little more in total interest to reduce the monthy payment, stretch it out a few months, but avoid this if possible.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

Get Insurance Quotes for the Vehicles You Are Considering (Car Buying Tips)

2006-10-18T08:35:00.000-07:00

Too many buyers stretch themselves too thin with their car payment before they even consider the cost of their car insurance. This is especially true of buyers who trade in an old car for a brand new car. In general, insurance will cost more for cars that are worth more since it would cost more to replace a more expensive vehicle.

You will need to know the details of your current coverage before you start getting insurance quotes for the car that you are considering. You could usually get an insurance quote from the dealership, but they will always pad it to take a cut of the profit. You will likely get a better rate on your own. Start by contacting your own insurance agent. Give your agent the year, make, model and, if possible, the VIN of the car that you are considering. Be prepared to answer any other questions, such as the size of the engine, the number of doors, any safety features, security features and any other factor that may affect the rate. Ask if your agent will need to run your credit report. If so, offer to share the results of the report that you ran for yourself. This will help to reduce the number of inquiries into your credit history. This is important since inquiries into your credit can reduce your credit score.

Do not stop there. Put the policy out to bid with other companies as well. Some people stay with the same insurance company for many years. They readily accept rate increases as a normal part of being insured. It is possible that they have not shopped for better rates and they may be surprised to find substantial savings elsewhere. This is an opportunity to re-evaluate your insurance rates for all of your family vehicles.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

Lemon Laws (Car Buying Tips)

2006-10-16T23:24:00.000-07:00

What If You Have a Lemon?

If you keep getting the same problem fixed over and over again and if your car is under warranty, then you might have a lemon. Even if your car does not fully meet the criteria for your local lemon laws, you still could be eligible for some type of consumer protection.

If you believe that your car is a lemon, then I recommend that you do the following:

Act quickly. Every state has some type of time limit and/or mileage limit for you to seek lemon law protection;
Collect all of your documents, repair receipts and any other evidence to support that your car qualifies as a “lemon.” Make sure that you can explain why your car qualifies for your state’s lemon law protection;
Write to the manufacturer by way of a certified letter with a return receipt. This is necessary since the manufacturer is required to fix the vehicle within a certain number of days (which can vary according to your state's lemon laws);
Your letter should include the following information:

Your vehicle’s VIN number along with the make, model and year;
An explanation of the problem;
The name of the dealership that is handling the repairs and the dates the repairs were attempted;
State that you are preparing to seek lemon law protection for this vehicle. This usually will mean that the manufacturer could be required to fully refund the price of the vehicle or provide a replacement vehicle.
Follow any additional requirements according to the your state lemon laws. This may include requesting compensation, a refund or a replacement vehicle from the manufacturer.

If you think the case will head to court or arbitration, seek the advice of a lawyer who has lemon law experience in your state. Also, consider seeking the testimony of a certified mechanic or any other authority who could support your case. In some states, the manufacturer must compensate your legal fees if you win the case.

Since the lemon laws vary so much from one state to the next, I put together links to lemon law resources for all the states and also Washington, D.C. These links are to the Attorney General’s lemon law resources for each state, whenever possible. Click on this link to see the lemon laws for your state.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

You Versus the Salesman (Car Buying Tips)

2006-10-13T18:13:00.000-07:00

When customers who want the lowest possible price negotiate with salesmen who want the highest possible commission, hard feelings could fly across the negotiating table. As a former car salesman, this is my advice to all car buyers.

Treat the salesman with respect. Yes, some salesmen will say anything to get a sale, but don’t assume your salesman is one of them. When dealing with your salesman, be pleasant and treat him as you would like him to treat you. Yes, that is the Golden Rule, and it’s always the best way to deal with people. Where I sold cars, some of the sales consultants were honest and trustworthy. Unfortunately, a few were not, but you get that wherever you go. If you can't trust your salesman, then ask for the sales manager so he can get you someone else to work with or leave and shop at another dealership.
Do your research before you show up at the dealership. It makes the transaction go much nicer for you and for the dealership when you arrive informed and with reasonable expectations. Honestly, for your sake, you will get a better deal if you take the time to educate yourself.

I mention these two things because when I sold cars, nothing was more frustrating than customers who assumed that I was liar and a cheat, except for the customers who were completely uneducated and who wasted my time with impossible expectations. No, you can’t buy a $35,000 truck with a $200/month payment and nothing down!

In the end, everybody should get a fair deal. You should buy a car at a fair price and the dealer should make a profit. This brings me to a point that I probably have not made clearly enough. You should save thousands and the dealer still should make a profit.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

Seven of the Most Overlooked Car Buying Tips

2006-10-12T12:08:00.000-07:00

by
Brian S. Tozer

While most of us are concerned about the price negotiations at our local car dealership, it would be a serious error to overlook some of the events that can happen in the Business or Finance & Insurance (F & I) Office.

These car buying tips may seem unusual and possibly new to you, but they will protect you from getting the bad end of a deal.

Seven of the Most Overlooked Car Buying Tips

1. Run your own credit check. Do not let the car dealer do it. Take the time to review your credit report and to contact the appropriate people if you find errors. If you let the dealership run your report, you will not have this luxury. Also, by knowing your credit score, you can research and even obtain financing on your own. This way, if the dealer offers you a financing arrangement, you will know how it compares to other options.

Credit inquiries never help your credit score. By running your own report, you can restrict the number of inquiries into your credit history. You can say to the dealership, "based on this score in this report, what rates can you get me?" The dealership could draft a contract contingent upon the accuracy of the report you provided. If the dealership needs to run its own report (to verify the accuracy of the one your provided) that would be fair and reasonable.

As a caveat to this advice, it is illegal for car dealers to run your credit report without your permission, but many of them still will. If the dealership can get your social security number or in some cases, your driver's license number, it can run a credit check. Beware of the following tactics that dealers use to get this information from you:

Do not provide your Social Security Number to the dealership unless you are filling out a credit application. As soon as the dealership has your SSN, there is a strong chance that someone is running your credit report, even if you have not granted the dealership permission to run your credit. Knowing your credit score helps the dealer to come up with a strategy for negotiating with you. It is generally worth the risk to run your credit report as soon as possible since most customers will never check to find out that an unauthorized credit report was run.
Do not provide your driver's license number to the dealership. In most cases the dealership will want to see and make a copy of your driver's license before you go on a test drive. Provide the dealership a photocopy of your license so that your driver's license number and social security number (if it appears on your license) are blackened out.
Do not panic when you hear the words "Patriot Act." Many car dealerships are misusing this Federal legislation as an excuse to get your Social Security Number. Section 326(a)(2)(A) of the Patriot Act, requires “financial institutions to implement, and customers to comply with, reasonable procedures for verifying the identity of any person seeking to open an account to the extent reasonable and practical.” This rule is supposed to help prevent money laundering and other methods of funding terrorist activities. Basically, the purpose of the Patriot Act is “to deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes." If you are not applying for a loan through the car dealership, then the Patriot Act does not apply to you. Once you start filling out the loan application, then you must provide your Social Security Number. Until then, the dealership should not have it.

2. Avoid all mandatory binding arbitration agreements (MBAA's). Chances are that you probably will never have to take the car dealership or the manufacturer to court, but if you do, the mandatory binding arbitration agreement is going to kill almost any chance you have of taking any meaningful legal actions. Usually hidden within the small print of the many pages of contracts that you must sign, the mandatory binding arbitration agreement basically says that you are waiving your right to take the dealership (and sometimes the manufacturer) to court over any grievances that you have. Instead, you are agreeing to allow an arbitrator to hear the case. This would be a disaster for you for the following reasons:

The arbitrator's decision is final. The consumer has no recourse for making an appeal;
In a court of law, rules are governed by existing law. With arbitration, the rules of governance are not as clearly defined;
The arbitration company is chosen by the dealer, so the arbitrator might be biased. In fact, bias may be likely because the arbitrator could lose the dealer's business if it favors against the dealer;
The fees you must pay for taking the dealership to the arbitrator are usually significantly higher than they would be for taking the dealership to court;
In some cases, consumers must travel to distant cities for their case to be heard by an arbitrator.

In many cases, the contracts will require you to submit to the mandatory arbitration agreement, while they allow the dealer may take you to court. It's one-sided and to your disadvantage.

If any paperwork mentions a mandatory binding arbitration agreement, do not sign it. Tell the dealership that you will only sign contracts without an MBAA. If the dealership is adamant about subjecting you to this unfair arrangement, carefully consider if you really want to do business with it.

3. Avoid the spot delivery. In other words, do not take your car home until the financing has been approved in writing. Usually in the paperwork, one can find wording that says, "Subject to loan approval," or "Subject to financing." This is extremely important for those with poor credit. In what is often called the "spot delivery scam," the unsuspecting buyer receives a call from the dealership saying that the credit was not approved at the negotiated rate. This could be days after the sale was completed. Sometimes the person's trade-in is already sold by now. The finance officer will usually then say that the loan was approved at a higher rate. Usually, most buyers accept the higher rate since their options are so limited. One can avoid this altogether by waiting for the original negotiated rate to be approved before taking delivery of the car.

4. Read everything carefully before you sign any paperwork. Literally, read every word. Read all the fine print. This may take hours, so ask to take the paperwork (or a copy of the paperwork) home with you and arrange to come back to complete the sale. You need to look out for wording such as "mandatory binding arbitration" and "subject to approval." Highlight any wording that may be objectionable. Aside from being careful, this will also give you some "cooling off" time if you are about to make an emotional purchase.

5. Do not leave any blanks in any paperwork. Everything you sign while buying a car is a legal document. Your signature holds you accountable for everything that is on the page that you signed. Dealerships have been caught adding things to documents after the customer has signed.

Fill in every blank line with "N/A" or "Not applicable" before you sign. Get the finance officer to initial each of these lines. Sign your name only after all the blanks are filled in.

6. Get a photocopy of all paperwork pertaining to your car purchase. Request a photocopy of all the paperwork pertaining to your car purchase. Be thorough. Make sure you get a copy of the backside of any two-sided forms.

7. Find out how much the exact document preparation or paperwork fees are in your particular sales' transaction. These fees usually refer to the paperwork for registering the vehicle's title and license plates. According to an article dated October 11, 2006 in the CUNA's (Credit Union National Association) website, fees vary by state and dealership and can be as high as $900. Analysis by this author reveals that the online car loan calculators used by some of the major lenders assume a $300 paperwork fee.

The CUNA's website suggests negotiating for a lower fee or for additional features on the car in exchange for paying the fees. If the dealership will not budge to reduce exorbitant fees, then start shopping elsewhere.

Brian S. Tozer is the author of The Car Buying Bible. A former car salesman, college math instructor and insurance analyst, Mr. Tozer offers car buying tips with a strong emphasis in the financial aspects of buying a car. His website offers free online car loan calculators that he personally developed.

The Secret Used Car Pricing Code (Car Buying Tips)

2006-10-11T07:40:00.000-07:00

Most car buyers are frustrated when the used cars on the lot have no prices on them. You'll have to pull teeth to get a price from a salesman! You'll hear lines like, "Let's take it for a drive first to make sure you like it before we discuss the figures. There's no point in discussing price if you're not going to like the car." With enough persistence, you might get the price out of the salesman, but usually you won't get any useful information until after you completed a test drive.

Why do dealers make the price on used cars such a mystery? When I sold cars, the explanation I got was, "We want the focus to be on the car and not the price of the car." The sales manager would say, "Just land the customer on a car. Get them excited about it and price won't matter." In case you're wondering why new cars have price stickers while used cars do not, it's because there is a federal law requiring the price to be displayed on all new cars.

Let me end the mystery for you right now and reveal the secret used car pricing code!

Here Is the Secret Used Car Pricing Code
Usually, on the windshield, there will be a sticker that gives the year, make and model of the car. You may notice some letters on this sticker. For example, you may see, "LSKKE." This, my friend, is the price once you can read the code!

Write down the word "BLACKHORSE" so that:
B = 1
L = 2
A = 3
C = 4
K = 5
H = 6
O = 7
R = 8
S = 9
E = 0

Using this code, where the letter represents the number given above, LSKKE is $29,550.

Once you're sitting at the negotiating table, you can bet this is the price the dealer will give. Therefore, if you know you're looking for a used car with an asking price of $20,000 or less, you can read the codes yourself. Any 4-digit code is safe since it represents a price of $9,999 or less. Any 5-digit code that begins with a "B" is safe since it represents the $10,000 range. If it starts with an "LE", you're pushing into your limit or beyond since you know the price is at least $20,000.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This car 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

What Does It Mean to Lease a Car? (Car Buying Tips)

2006-10-09T14:01:00.000-07:00

I'm overdue in mentioning the aspects of leasing a car, so here it goes.

What is Leasing?
Many of my customers heard about leasing, but didn't understand what it was. This is how I explained it.

When you buy a car, you are purchasing the entire car. You make payments until the car is 100% yours. You gain equity in the car and may trade the equity for cash (by selling it).

When you lease a car, you are paying for the use or depreciation of the car. Here's what I mean. Suppose you lease a $30,000 car for 36-months. Even before you sign the paperwork, the dealership will tell you that the $30,000 car will be worth $20,000 in three years. When you lease, you would have to pay off the $10,000 depreciation and not the $30,000 price. At the end of the lease period, you usually will have the option to buy the car for $20,000 or you can enter into a lease agreement for another vehicle.

Leasing (Pros)

you will have a lower car payment;
you can drive more expensive models that normally would be out of your price range;
your car is always under warranty (if the lease is under 3 years);
you can drive the latest models and enjoy the latest car technology.

Leasing (Cons)

you will not gain equity in the car;
you must either return the car at the end of the leasing period, buy the car or lease another car;
you get stuck into always having a car payment;
you are restricted to mileage limits with stiff per-mile penalties for exceeding those limits. You probably wouldn't want to take your Disney vacation in your leased car if it involves a long trip;
you will pay more in the long run than someone who buys the car.

Mandatory Binding Arbitration Agreements (Car Buying Tips)

2006-10-05T23:40:00.000-07:00

Honestly, when you're buying a car, do you actually read all the paperwork before signing your name? Almost nobody ever does and in some cases that turns out to be an expensive mistake.

When I sold cars, I remember reading over some contracts that consumers routinely sign. One phrase caught my attention and is worth mentioning. It said that the consumer can only present any grievance against the dealer to an arbitrator and not to a court of law. While the customer could not use the courts, the dealer can. This is just another example of how the dealer stacks everything in its favor.

I did some digging and found some information at www.autoissues.org/arbitration_faq.htm. This is on the website for The Consumer Task Force For Automotive Issues, a consumer advocacy group founded by Remar Sutton -- who is closely affiliated with Ralph Nader and the Public Citizen.

In case you don't have time to check it out the FAQ, here is what I already know.

Unfortunately, the term "mandatory binding arbitration agreement" gets buried in the wording or in the fine print and consumers don't get the full impact of what this means. The bottom line is that if something goes wrong, even if the dealer is clearly at fault, the consumer has waived the right to take the case to court. An arbitration company will hear the case.

The Problem with Mandatory Binding Arbitration Agreements

The arbitrator's decision is final. The consumer has no recourse for making an appeal;
In a court of law, rules are governed by existing law. With arbitration, the rules of governance are not as clearly defined;
The arbitration company is chosen by the dealer, so the arbitrator might be biased. In fact, bias may be likely because the arbitrator could lose the dealer's business if it favors against the dealer.

The Consumer's Solution

Tell the F & I officer that you must read every word in every contract before you sign anything at all. He will look at you like you're crazy. The reading can take an hour or two. You may read it there or insist on taking it home with you to complete the transaction the next day.
Tell him upfront that you will not consent to a mandatory binding arbitration agreement. If the dealership insists on this, then you will continue your shopping elsewhere. Everything is negotiable and the dealer does have the choice to abide by your terms. If it does not, then you should have serious questions about buying a car there. Stick to your words. If any contract requires mandatory arbitration, do not sign it.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

Cash Back vs. Low APR Financing (Car Buying Tips)

2006-10-03T18:13:00.000-07:00

When I sold cars, people kept asking me, "What's better, the cash back rebate or the low APR financing?" I hate to say it, but the answer really is, "It depends." First of all, it depends on whether you are eligible. If your credit scores is near 700 then you might be eligible. Most people are not, but suppose you are. If you are eligible, then it depends on whether the savings on the lower interest rate can offset the foregone rebate. What is better, the cash back rebate or the low APR?

A Case Study (The 2006 Chrysler Sebring 2-Door Convertible)
Today is October 4, 2006. The current promotion on the Chrysler Sebring gives the buyer a choice between a $2,500 cash rebate or low APR financing of 4.9%, according to Edmunds. The national average car loan is 6.93%. Is it better take the $2,500 rebate and finance at 6.93% or is it better not to take the rebate and finance at 4.9%. Suppose we could buy this car for $27,000 which is slightly more than invoice. Finally, assume that tax, titles and other fees are $300, sales tax is 6%, there is no down payment and no trade-in. In this example, rebates are taken after sales tax is considered.

Car Loan Calculator Will Solve This Problem
I used The Car Buying Bible's car loan calculator to compile the table below. For each scenario (24, 36, 48 and 60 months), it was a better deal to take the $2,500 rebate with the higher interest rate. If you look at the column for 60 Months, you will see that you give up a $2,500 rebate in order to save $1,171 in interest. That is hardly a good deal by any standard. The total cost of the low APR offer is (what you borrow plus interest) is $32,665.80. The total cost for the rebate offer is $31,336.80. Therefore, the low APR offer has cost $1,329.00 more.

	24 months	36 months	48 months	60 months
Amount Financed 4.9%APR	$28,920	$28,920	$28,920	$28,920
Amount Financed 6.93%APR & $2,500 rebate	$26,420	$26,420	$26,420	$26,420
Amount Financed Difference	$2,500	$2,500	$2,500	$2,500
Monthly Payment 4.9%APR	$1,267.47	$865.46	$664.70	$544.43
Monthly Payment 6.93%APR & $2,500 rebate	$1,182.05	$814.93	$631.80	$522.28
Monthly Payment Difference	$85.42	$50.53	$32.90	$22.15
Total Interest Paid 4.9%APR	$1,499.28	$2,236.56	$2,985.60	$3,745.80
Total Interest Paid 6.93%APR & $2,500 rebate	$1,949.20	$2,917.48	$3,906.40	$4,916.80
Total Interest Paid Difference	($449.92)	($680.92)	($920.80)	($1,171.00)
Total Cost of Loan 4.9%APR	$30,419.28	$31,156.56	$31,905.60	$32,665.80
Total Cost of Loan 6.93%APR & $2,500 rebate	$28,369.20	$29,337.48	$30,326.40	$31,336.80
Total Cost of Loan Difference	$2,050.08	$1,819.08	$1,579.20	$1,329.00

I'm sure there are cases where it's better to take the low APR, but here, the rebate was a better deal. To know for sure, use a car loan calculator to find out.

For First-Time Car Buyers Part 2 (Car Buying Tips)

2006-10-03T08:00:00.000-07:00

If you read my first post "For First-Time Car Buyers Part 1 (A Car Buying Tip)," you would know that I highly recommend buying from a private owner rather than a dealer. I failed to mention that you usually can get a warranty for a privately bought car.

Check out Warranty Direct at www.warrantydirect.com. At the time of this writing, a representative on the phone told me that it usually can offer a warranty on vehicles that are from 1989 or newer and with less than 150,000 miles. This company costs up to 60% less than the dealer warranties and they allow you to get your car repaired by any certified mechanic and not just a dealership.

Tips for First-Time Buyers Who Want to Buy from the Dealer
Here is a top-5 list of what is important to remember:

Everybody who works at the dealership is there for one reason. They are trying to make as much money as they possibly can. They are trying to sell you cars at inflated prices, extras, warranties, service contracts and much more. If they recommend that you lease rather than buy, it's because they think they'll make more from you if you lease. Every suggestion they make will be to their advantage -- not yours.
Spend plenty of time researching cars before you visit a dealer. Have at least 3 to 5 possible models in mind. By the time you visit a dealer, you better know what your current car (if you have one) is worth and you better at least know the dealer invoice for the cars you want. Don't pay any attention to the sticker price. People who lose money at the dealership look at those.
Never, never, never buy a car on your first visit to a dealership. Do you have at least 3 to 5 models in mind? The first visit to a dealership should be for a test drive. Drive the car to see what you think of it and then leave immediately. Go to other dealerships, test drive the car and leave. Do this until you have a clear idea of what type of car you liked best. Do not sit at the negotiating table during these visits!
Keep your emotions under control. Emotional buyers pay the most for cars. They start wanting the car so badly that they seem to lose all ability to think logically. Both the emotional buyer and the logical buyer can eventually own the car, but the logical buyer will have much lower payments. In fact, when it is time to buy, bring someone with you who could knock some sense into you if you're going to make emotional mistakes.
Never discuss monthly payment with anybody who works for the car dealership. Your salesman should have absolutely no clue what you want to pay per month. Keep it this way, because if he does find out, then you are on your way to losing thousands of dollars on your purchase. If the salesman asks, just say, "I'm not a payment buyer. I'm only interested in the bottom line." You can determine the monthly payment with one of the tools mentioned below.

Tools for Determining Monthly Payment

Use this car loan calculator. At the minimum, you will need to know the anticipated selling price of the car, your local tax rate and the interest rate you expect to get for your financing. It will give you the monthly payment.
Use the reverse car loan calculator. Enter the monthly payment you want, your local sales tax rate and the interest rate you expect to get for financing. It will tell you the maximum selling price to fit your budget. This will help you to know your price range even before you visit the dealership.
Those who buy The Car Buying Bible get a unique printable worksheet that allows anybody to find the exact monthly payment for any car on a dealer's lot within seconds.

Written by a former car salesman, college math instructor, health insurance analyst and the author of The Car Buying Bible. This 162-page car buying guide is full of great car buying tips and offers the best car loan calculator around.

What Can the Holdback Do For Me? (Car Buying Tips)

2006-09-30T21:57:00.000-07:00

First of all, almost all dealers carefully guard their holdback money. Since it artificially inflates the invoice price, they feel entitled to get it back. It is never a good idea to mention the holdback early in your negotiations since it will get the negotiation off to a bad start.

With that said, it sounds like the holdback is of no use to you. Well… not actually. It is helpful for you to know if the dealer could sell the car at invoice and still profit $600. In negotiating price, the dealer should make a profit and you should do well also. If the salesman says that your bid is going to lose money for the dealership, you can at least know that he is not being entirely truthful with you. Stand your ground and don't come up to his price and you should do well.

Taken from The Car Buying Bible, a 162-page car buying guide which features car buying tips and car loan calculators. Written by a former car salesman, college math instructor and health insurance analyst.

Example of a Holdback Calculation (Car Buying Tips)

2006-09-30T13:49:00.000-07:00

Example of a Holdback Calculation
This is how it works. Suppose a car has a sticker price of $20,700, an invoice price of $17,000, a $700 destination charge and a 3% dealer holdback. In most cases, the holdback is taken as a percentage of the total MSRP price minus any destination charges. In this case, the MSRP is $20,700 with a $700 destination charge. We must therefore first reduce the $20,700 by $700 to base the holdback as a percentage of $20,000. In this case 3% of $20,000 is $600. Every 90 days, the manufacturer will issue the dealer a check for the amount of unused holdback. If the dealer were to sell the car immediately, it would receive $600 back. If the dealer were to sell the car in 45 days (half of the 90 days), it would receive $300 back (half of $600). If the car stays on the lot for 90 days or longer, the dealer would get nothing back. Regardless of the amount the dealer will get back, it must wait for its quarterly holdback check (every 90 days). This check is often in the tens of thousands of dollars for the dealers.

Keep in mind that the purpose of the holdback check is to help the dealerships with the interest payments they pay for financing their inventory. In a way, one could argue that any refund from the manufacturer is a reduction of the invoice. If the dealer’s invoice was $17,000 and a $300 holdback applied, then one could argue that the dealer got the car for $16,700.

Taken from The Car Buying Bible, a 162-page car buying guide which features car buying tips and car loan calculators. Written by a former car salesman, college math instructor and health insurance analyst.

What Is the Dealer's Holdback? (Car Buying Tips)

2006-09-29T22:05:00.000-07:00

The dealer’s holdback (also known as a “pack”) is another widely-used arrangement that is unknown to most people. Some people may consider the holdback a matter of accounting trickery, but this is the way it works. Manufacturers may inflate the invoice price of the vehicle (usually by about 2% to 3% of the invoice price or the MSRP). It will later return this money to the dealer in the form of a quarterly check (usually every 90 days). This is more or less a forced savings account that the manufacturer is imposing on the dealership.

Dealers must maintain large inventories. They therefore must finance a great number of cars in order to purchase them from the manufacturer. The manufacturer in turn helps the dealers to pay the interest charges for up to the first 90 days by using the money that was originally held back (the holdback money). If the dealer sells the car immediately upon receiving it in inventory, it will be eligible to be refunded all of the holdback money on that vehicle. If the dealer sells the vehicle in 45 days, it will be eligible for half the holdback money. If the vehicle is still sitting on the lot in 90 days (this is fairly rare), then the dealer will get none of the holdback money because all of it went towards paying the interest.

You may wonder why they bother raising the price to refund it later. If you think about this from the dealer’s point of view, you will see some great reasons:

It increases the invoice price. If a customer tries to negotiate from the invoice price, then the negotiations will start from a higher number and the dealer will therefore make more money.
By increasing the invoice price, the dealer will need to finance its inventory based on a higher price and therefore attain more funding through its creditors for its inventory.
By increasing the invoice price, dealers ultimately will pay less in commissions to its salespeople because it reduces the profit on a sale. Commissions are usually calculated as a percentage of profits (selling price – invoice price).
Holdback money allows the dealers to sell at or near invoice and still make a profit. This allows dealers to hold and profit from the $1 over or under invoice sales.
The dealer gets some of the holdback money refunded, so for the reasons above, the holdback money helped the dealer not to lose as much money as it would without it.

Taken from The Car Buying Bible, a 162-page car buying guide which features car buying tips and car loan calculators. Written by a former car salesman, college math instructor and health insurance analyst.

For Car Buyers with Bad Credit (Car Buying Tips)

2006-09-29T12:41:00.000-07:00

Profit on Financing
For those with bad credit, I do have to give you a warning about financing through car dealers. You have to understand that the car dealers will be seeking to make a profit from you. If they do secure a lender, they are going inflate the interest rate they found for you by adding an additional 2% to 5% to it. Yes, that means, if they found you financing at a 10% rate, they could give it to you for as high as 15% and you would never know it. This is something like a finders fee. The dealer might just say its profit on the financing. Either way, it's not good for you.

Spot Delivery Scam
In addition, you may be a likely candidate for the spot delivery scam. Some of your financial applications will have the words, “Subject to loan approval.” With this scam, the dealer may call you a week or two after you’ve taken possession of your car saying that your loan was not approved at the original loan rate. They will make you bring back the car and on top of that, they will likely say that your trade-in vehicle was already sold. Finally, they will tell you that they found a lender at a higher rate. Your payment might go up a little, but you were left with no real options and you’re hardly in the position to be picky about your options since you have bad credit.

Do Not Take Delivery of Your Car Until Financing Is Approved in Writing
You can avoid this scam by taking possession of your car once the financing is approved in writing. It might mean waiting an extra day or two before you can drive you new car home, but it will help you to avoid a costly scam.

This was adapted from The Car Buying Bible, a 162-page car buying guide full of car buying tips. You may want to visit The Car Buying Bible's online car loan calculator. With both a traditional calculator and a reverse calculator, you can find the payment for the amount borrowed or the amount you can borrow for the payment you want.

The Prepared Car Buyer (Car Buying Tips)

2006-09-28T07:40:00.000-07:00

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.

Never Talk About Monthly Payment (Car Buying Tips)

2006-09-26T09:30:00.000-07:00

Take this car buying advice seriously. Never, never, never let your salesman know what monthly payment you want. This is one of the quickest ways to lose thousands of dollars at the dealership. Sure, I know you're wondering how such an innocent remark such as "I'd like to keep it under $350 a month" could cost you thousands.

If you haven't done your homework, you probably have no idea what kind of car should cost about $350 a month. The salesman knows this. In fact, he doesn't even believe you. If you said $350, he's hearing $400 because nobody really tells the salesman the most they can pay. He knows that if he can get you emotionally connected to a car, he can sell you something a little more expensive.

That's not the big problem. You want to pay $350 a month. Consider what the salesman might do with that information. None of these options is good for you:
1) He will find you a car that is supposed to cost about $300 a month and sell it to you for $350;
2) He will find you a car that should cost $350 per month and make you stretch your payment up to $400;
3) If he's a sleazebag, then he will find you a car that should cost about $300 per month and sell it to you for $400 or he might find you a car that should cost $250 per month and sell it to you for $350;
4) If he's extremely sleazy, he'll find a way to sell a $250 per month car for $400 per month. Don't think it can't happen!
5) He will sell you a much more expensive car and stretch the payments to 6 or 7 years to help you keep your payment around $350 to $400.

Here's the point. He knows what you said you could pay, he doesn't believe you, he knows that you have no clue what the monthly payments should be for the cars on the lot and he's going to take advantage of it.

The Remedy
Use a car loan calculator to find out the payments for the types of car you want. This will require a little bit of research on your part. It would be helpful for you to find out what interest rate you should expect to pay. Your bank or credit union usually posts car loan rates on its website. If you're going to trade in your car, you should get a good estimate of its value.

Introducing the Reverse Car Loan Calculator
This calculator is truly unique and can save you thousands of dollars. This reverse car loan calculator allows you to enter your desired monthly payment and reports back the appropriate selling price. This is the exact reverse of entering the selling price to get your payment. This way, you can immediately know if a car will be out of your price range when you begin your shopping. It prevents you from having to tell the salesman, "I want to keep it below $350 a month." If a car is slightly out of your price range, you will know how far you will have to talk to the total price down.

For More Information
Check out The Car Buying Bible. It is a 162-page car buying guide full of car buying tips that can save you thousands of dollars on every car you buy. It presents step-by-step car buying advice and the best car loan calculator you will ever find.

Direct Links:
Car Loan Calculator, www.carbuyingbible.com/CarPaymentCalculator.html
Reverse Car Loan Calculator, www.carbuyingbible.com/ReverseCarLoanCalculator.html

Leave Your Emotions at Home (Car Buying Tips)

2006-09-25T20:26:00.000-07:00

This particular article is not in The Car Buying Bible's 162-page car buying guide although it comes from the same writer.

In most cases, when we decide to buy something, we are acting on our emotions. There are the exceptions when logic does take control (such as spending $200 to replace a hot water heater for your house). With cars, in particular, the average customer seems entirely driven by emotions. Many seem to leave logic at home when they head for the car dealership. They've got it backwards. Leave the emotions home and bring logic with you. Emotions will cost you a lot of money. Logic will save you a lot of money. In the end, logic can still get you the car and after the emotions have worn off, you can have the same car for a much lower payment.

The car salesman knows that people get emotional. In most cases, the problem isn't getting people interested in the car. It's in getting to an agreeable deal that satisfies both parties. The more emotional you get over the car, the weaker you will be to negotiate. Consider this extreme example.

Once, I witnessed a horrific transaction. That's a strong word, but it really was shocking. The poor girl sat at the negotiating table and the salesman had her convinced that she wasn't offering enough for the car. I'm unclear how he did it, but nevertheless, he did. In the end, the girl paid $12,000 too much for the car. Unbelievable? Well... yes, except in this case, her emotions completely obliterated her ability to think rationally. Afterward, this salesman explained to me how powerful the fear of loss is. This girl was so desperate to have this car that she didn' t even attempt to stir the waters to talk the price down. The result? He walked all over her to collect a whopping $4,000 commission check on that transaction.

"Do you love your wife?" he asked me. Of course I do. He then explained, that as much as I love her, that I would find a way to love her more if I knew I was about to lose her. People are motivated by two things:
1) The pursuit of pleasure;
2) The avoidance of pain.
The second of these is by far the strongest motivator.

This is exactly why you need to leave your emotions at home with you. The price negotiations are designed to push these two hot motivational buttons. You get to the point that you love the car and want it and then the dealer tries to make you think that the deal might not happen. Suddenly, you're thinking, "I could get by paying $50 more a month than I had planned." Just like that, you're paying $3,000 more on the car than you had planned.

I had one customer who left the negotiating table on three different occasions. He walked out when the deal wasn't going his way. He wasn't emotional at all about the car. He was fighting for every penny and he fought hard. In the end, the dealership only made about $40 profit off the deal. It was perhaps a combination of the sales manager being sick of dealing with this guy and this guy's attitude that saved him thousands of dollars.

Always be willing to walk out on the deal. Let your salesman and the sales managers know that you're willing to walk out. If they can see that you really would leave without buying, then you're headed to some great offers. Even with a small profit on selling to you, they have moved a car out of their inventory.

Find great car buying tips and the best all-around car loan calculator in The Car Buying Bible's 162-page car buying guide.

Prepare Your Car for Trade-In (Car Buying Tips)

2006-09-24T19:16:00.000-07:00

When I sold cars, I was amazed to see that 90% of my customers did not bother to prepare their cars to be traded in. It seems that they didn't truly understand this basic truth about trading a car in.

When you trade in a car, for that moment, you are the seller and the dealer becomes the buyer. If you were going to sell your car to someone off the street, you would clean it up a little to make it more appealing to the buyer. Why would you not do the same when selling it to the dealer? Besides, the condition of your car can make a good difference in the trade evaluation.

Upgrade the Condition of Your Vehicle
If you can do any work to upgrade the condition of your vehicle from poor to fair, fair to good or good to excellent, then you should do it if you can get a favorable return on your investment.

By all means, take the time to thoroughly clean your car. First impressions go a long way. If an appraiser sees a dirty car, he is going to think that you did not take care of it. If he sees a clean car, then he’ll think otherwise. His opinion can make the difference between hundreds or thousands of dollars. Besides, he may be attracted to receiving a vehicle that requires no preparation before being put on the car lot for sale.

Shampoo the upholstery, get all the bad smells out, thoroughly wash and wax the car. If there are any minor dings in the paint or small rust spots, use a little bit of touch up paint on them. If there are any small dings in the windshield or any other of the windows, apply some windshield filler. Even clean up under the hood. An afternoon of detailing your car may allow you to sell it for hundreds or tens of hundreds of dollars more.

The last three paragraphs are found in The Car Buying Bible (www.carbuyingbible.com), a 162-page car buying guide. Inside, you will find great money-saving car buying advice and the best car loan calculator around.

Leaving Blanks on Paperwork (Car Buying Tips)

2006-09-22T23:23:00.000-07:00

Every document that you sign while buying a car is a legal document. When you put your signature to anything, it holds you accountable for everything that is on the page you signed. Dealers have been caught adding things to documents after the customer has already signed.

When you sign paperwork at a car dealership, make sure there are no blank lines. For each blank line, write in something such as “N/A” or “Not applicable.” Get the F & I officer to initial each of these lines. Do not sign any documents until all of the blanks have been filled in. Get a photocopy of every document that you were shown and every document that you signed. It could come in very handy if anything goes wrong later.

Visit The Car Buying Bible (www.carbuyingbible.com), my 162-page car buying guide. It gives the best car buying tips and most powerful car loan calculator you will find. Expect this great car buying advice to save $5,000 or more on your next car purchase.

Are You Upside-Down? Part 2 (Car Buying Tips)

2006-09-21T08:48:00.000-07:00

You Are Responsible for Paying Off Your Old Vehicle

Regardless, of all other factors, if you owe money on a vehicle, then you will be responsible for paying off the debt to the current lender. The dealer may agree to pay off your current vehicle when you apply for financing, but the responsibility lies with you to make sure every penny is actually paid off.

Never Buy a Car When You’re Upside-Down (If You Can Avoid It)
If you are upside-down, then seriously consider whether you actually need to buy another vehicle. If you absolutely must buy another vehicle, consider selling your current vehicle privately. By selling privately, you stand a better chance of raising more money to pay off the current vehicle than you would through a typical trade-in.

See The Car Buying Bible for more car buying tips. This 162-page car buying guide with its powerful car loan calculator can save you $5,000 or more on every car you ever buy.

Are You Upside-Down? Part 1 (Car Buying Tips)

2006-09-20T07:45:00.000-07:00

If you owe more on your current vehicle than what it is worth, then you are said to have negative equity or are said to be upside-down. This is actually quite common. When you buy a vehicle, it depreciates nearly 20% soon after you drive it off the lot. At this point, you have not made any payments on it, so you are automatically upside-down. At some point, usually about 2 years into your car loan, you would have paid off enough so that you will owe less than it is worth. Therefore, if your car is less than 2 years old, you are likely upside-down. The general consensus is never to trade in a vehicle if this is the case. Here is how it works.

Suppose that you are buying a vehicle for $20,000, your trade in is worth $3000 and you owe $5000 on this trade-in. In other words, you would be upside-down by $2,000 since you owe $2,000 more on your vehicle than what it is worth. Here is a rough estimate of the amount you would finance. Taxes, titles and fees are not considered here.

$20,000 - $3,000 + $5,000 = $22,000

In other words, you would owe the $20,000 for the new vehicle plus an additional $2,000 for covering the negative equity in the current vehicle.
First of all, your $20,000 vehicle is soon worth $16,000 after you take it home and you owe $22,000. Just like that you are now $6,000 upside-down. This is not a good situation to be in!

This post was taken from The Car Buying Bible (www.carbuyingbible.com), a 162-page car buying guide full of money saving car buying advice. It comes with the best car loan calculator you will ever find. The car buying tips in this powerful presentation can save you $5,000 or more on every car you ever buy. Just imagine the lifetime savings on that!

Misuse of the Patriot Act (Car Buying Tips)

2006-09-19T19:41:00.000-07:00

This post actually does relate to car buying, although it may not seem so at first. Keep your ears open the next time you are buying a car, because this may be new to you.

Misuse of the Patriot Act
Section 326(a)(2)(A) of the Patriot Act, requires “financial institutions to implement, and customers to comply with, reasonable procedures for verifying the identity of any person seeking to open an account to the extent reasonable and practical.” This rule is supposed to help prevent money laundering and other methods of funding terrorist activities. Basically, the purpose of the Patriot Act is “to deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes.

What does all of this have to do with the car dealership?

Well… if a customer is seeking to finance a car at the dealership, then the dealership is required to verify the individual’s identity.

The Patriot Act is being misused as an excuse to get a customer’s social security number to run a credit check before the customer fills out the credit application or gives permission for the credit check to occur.

If you are financing the vehicle through the dealership, then you will be required by the Patriot Act to supply your social security number and other identification. If you are not financing through the dealership, then you are not required to provide this information.

This post was modified from The Car Buying Bible (www.carbuyingbible.com), a 162-page car buying guide with the best car loan calculator around. It will save you thousands on your next car purchase.

Psychology of the Long Wait (Car Buying Tips)

2006-09-17T23:53:00.000-07:00

When you negotiate for a car at the dealership, the sales managers work slower than molasses on a winter's day. Sales managers love to keep people waiting. They love it even more if the customer is hungry, tired or simply worn down. Keeping this in mind, you should go to the car dealership on a full stomach. Bring a good book with you or something to keep you entertained in case you are subjected to the long wait.

The following paragraph is an exerpt from The Car Buying Bible to describe the typical car buying experience:

You should expect a LONG wait. The sales manager will operate unreasonably slow and this is intentional. This is his way of maintaining control over you. In a negotiation, the person with the control will usually win. He knows that you are undergoing an emotional event and he wants to beat you down. If you sit and wonder, “I hope I didn’t blow it” or if you wonder, “I hope I get this car,” then he has you right where he wants you. Also, by now, you probably have been at the dealership for several hours. He knows this is exhausting for you and that if you invested this much time into the experience, then you are not going to be enthused about walking out to start the process over somewhere else. Even if you wanted to leave, he has your keys or possibly has “lost” them by now, so you really couldn’t leave if you wanted to.

See The Car Buying Bible to find out how to eliminate the long wait and the price negotiations altogether. This 162-page car buying guide with an accompanying car loan calculator offers great car buying advice that can save you thousands on your next car purchase.

Advice for Women Who Shop Alone (Car Buying Tips)

2006-09-15T12:36:00.000-07:00

This car buying advice is to all the women car buyers out there. Women who shop alone typically complain that it's very difficult to find help at car dealerships. Salesmen are usually quick to greet most customers, but when they see a woman come in alone, they wait for the new guy to help her. Some of you might find this offensive, but I'm speaking the plain truth as to why I think women car buyers are discriminated against at many car dealerships.

If you’re a woman who is shopping for a car, all of the techniques in this book still apply to you. There is one thing extra that I might add. Here is some personal insight into why I think women who shop alone do not get very attentive treatment at the dealership.

Almost all salesmen work on commission. They want to know that if they spend time with you that they at least have a chance of getting paid for their time. The problem is this and it really is nobody’s fault. Women often take up hours of a salesman’s time. That’s not a bad thing because men do the same thing. The difference though is that when the salesman asks for the sale, men are more likely to be a decision-maker than women are. Women often say, “Let me check with my husband. Do you have a card?” For a salesman, this is one objection that cannot be overcome and it is one that occurs frequently with women customers. Men often buy without their wife’s input.

That may sound sexist, but I can guarantee you that salesman all over America would agree with it.

Read more in The Car Buying Bible, a 162-page car buying guide that can save you $5,000 or more on every car purchase you ever make at a car dealership. Also, check out the best car loan calculator that you will ever find. It's all at The Car Buying Bible's website, www.carbuyingbible.com.

Buyer's Remorse (Car Buying Tips)

2006-09-14T15:01:00.000-07:00

Sometimes, not long after you’ve taken delivery of your car, buyer’s remorse may set in. You realize that you set out for a $300 payment, but you stretched it out to $380 and the extra $80 each month will take its toll on your budget. You also realize that your insurance will go up at least another $100 per month and you honestly have no idea how you will pay for it. Also, you realize that you now have $1,000 less in the bank from your down payment. You wonder if you could have bought the vehicle at a better price. Then you wonder if you should have visited a few more dealers before you bought anything at all and what kind of deal you could have gotten if you had negotiated harder.

None of this would have happened if you had followed my advice in The Car Buying Bible, but suppose it did happen?

Some states allow car buyers to return the vehicle for a refund if they regret making the purchase. The return must usually be made within 3 days after the purchase, but since state laws can vary, you would need to investigate the laws within your state and return the vehicle as quickly as possible. It’s possible that your state does not have this protection, so you would need to investigate before you visit the dealership. You can begin your investigation by contacting your state’s Attorney General’s Office. Some states have a Consumer Affairs Department within the Attorney General’s Office that could provide assistance.

For more car buying tips, visit The Car Buying Bible (www.carbuyingbible.com). This 162-page car buying guide has a powerful plan that will save you thousands on your next car. It also has the most powerful car loan calculator you will ever find.

Research the Car You Want to Buy (Car Buying Tips)

2006-09-13T08:34:00.000-07:00

Research the Vehicle You Want to Buy

You need to know as much as possible about the vehicle you want to buy before you visit the dealership. With the Internet and all the resources that are available, it is foolish to rely solely on the dealership for information about the vehicle that you might want to buy. The dealership is going to be biased and mention the positive aspects of the vehicle. Plenty of other people have bought the same vehicle and it’s worth reading their opinion. If you’re out at the mall or getting groceries and see a person driving the type of vehicle you want, stop and ask for his or her opinion.

By gathering your research before you visit a dealership, you will know what to look for when you finally see the vehicle in person. You will be armed with information and the ability to ask intelligent questions. Also, by being informed it will be more difficult to be misled by a salesperson whether intentionally or not. Usually, most salesmen are trained with biased information and they may be unaware of problems in their product line.

For more car buying advice and the best car loan calculator, check out The Car Buying Bible (www.carbuyingbible.com). This 162-page car buying guide is guaranteed to save you thousands of dollars on your next car purchase.

Be Careful in the Business Office! (Car Buying Tips)

2006-09-12T09:00:00.000-07:00

Be Careful in the Business Office!

If you are like most buyers, you may tend to relax once the price negotiations with your salesman are over. This after all, is the part that almost all car buyers dread. This would be a BIG mistake! I can’t stress this enough. In fact, even if you made out great in the price negotiations, you might lose almost all of your wonderful savings in the Business Office (also called F & I or Finance and Insurance Office). In fact, most of the dealership’s sales profits are made in the Business Office. Are you ready for the car dealers’ biggest secret?

Find out about it in The Car Buying Bible (www.carbuyingbible.com). This 162-page car buying guide includes the best car loan calculator around along with car buying tips to save you thousands of dollars.

Laws of Economics Apply to Car Buying

2006-09-11T07:33:00.000-07:00

The Laws of Economics Always Apply

Keep in mind that the basic laws of economics apply even at the car dealership. If the supply is higher than the demand, then the price will fall. If the supply is lower than the demand, then the price will rise.

Translated? If the dealership has three Ford Mustangs left and you’re one of many shoppers bidding for one, the dealer will laugh you out of its showroom if you offer to buy it anywhere near invoice. On the other hand, if the dealer has too many F-150 pickup trucks, then they probably will cut you a deal to help reduce the inventory.

The same goes for trading your vehicles in. If you’re trying to get rid of an old white pickup and take it to a dealer that has too many of them already, don’t expect to get a great deal on your trade-in. Shop around for a dealership that would be more interested in your vehicle. Sell it to them, even if you are buying from another dealer. You will make out much better this way.

Visit The Car Buying Bible (www.carbuyingbible.com) for the best car buying tips and even more advice on saving thousands on your next car purchase! You will also appreciate its powerful car loan calculator.

You're Just Another Customer (Car Buying Tips)

2006-09-10T22:26:00.000-07:00

At the car dealership, your salesman will treat you like you are his best friend. He will joke around with you and develop some common ground. Later, as you negotiate on price, he will keep you waiting as he battles it out with his manager. It's you and him against the manager and you feel great knowing that you have somebody on your side. Don't be fooled!

Chances are remarkably high that your salesman earns commission, which is usually a certain percentage of the profit on the deal. In fact, your salesman wants you to buy your car at the highest possible price so that he can get a big paycheck. No matter how much you like your salesman, you are just another customer to him. If you don't mention a $3,000 manufacturer's rebate, then maybe... he and his manager will not factor it into the deal. By holding back a $3,000 rebate he will be adding approximately $600 to his commission. It happens all the time.

The car dealer exists for the sole purpose of making money. Assume that whatever the dealer says or does is to its advantage, at your expense. Everybody who works at the dealership was hired to make the dealership money, so do not trust that anybody at the dealership is on your side. When you get down to it, these people need to make money and they do that by selling cars at the highest possible price. If you follow their lead in the sales process, which is carefully designed to make money for them, then you will pay thousands too much. To them, you’re just another customer and another way to get a good paycheck. Always be willing to walk out on any dealership. There are plenty of others that may try harder to earn your business. Don’t forget that.

The last paragraph is taken from The Car Buying Bible (http://www.carbuyingbible.com. This 162-page e-book with an accompanying car loan calculator is full of great car buying advice that is guaranteed to save you thousands of dollars on your next car purchase.

Bring a Calculator When Buying a Car (Car Buying Tips)

2006-09-09T13:40:00.000-07:00

Bring a Calculator When Buying a Car

When I sold cars, I was amazed at the number of people who did not bring a calculator with them. They were at the mercy of the dealership to give them all of the numbers and they had no way of checking to make sure everything was in the right ballpark.

Never Discuss Your Desired Monthly Payment

Car dealers will get you to focus on your monthly payment and most customers take the bait. Eventually, they lose sight of the total price as they battle out the payment they want. In many cases, I've seen customers pay more than sticker price for their car without realizing it.

Most people want a car that fits in their monthly budget, but it's a big mistake to discuss monthly payment with the dealer. As tempting as it is to ask the salesman, "What would the payment be on this vehicle?" you can't allow yourself to do that.

If you're truly worried about your monthly payment, then you need to concentrate on the total selling price of the car you're buying. Buying at the lowest total price will automatically get you the lowest possible monthly payment. Simply tell your salesman that you are not concerned about the monthly payment and never tell him what your targeted monthly payment is.

You Need to Quietly Figure Out the Monthly Payment Yourself

Ideally, you should use a car loan calculator to determine the monthly payment for the car you want to buy even before you visit the dealership. It's easy to figure out the monthly payment for any car without asking the salesman. Do you have your calculator? You will need one with the exponent key. It should have the symbol ^ or it might look like y with a small x to the right and above it. Here is a trick that you won't find anywhere else. I'm a mathematician, so I developed a printable table to take to the car dealership that will get you the correct monthly payment to the penny for any car you could possibly find. This table is in my e-book The Car Buying Bible (www.carbuyingbible.com). Since we don't have the table here, I developed a shortcut method that will be in the ball park of the correct payment.

How to Estimate Your Monthly Payment

For a 60-month payment (which is standard for most folks), do this. Know the interest rate that you expect to pay. If the rate is 5.3%, you will need to use .053. Suppose that you will be financing $40,000. This is used in the example below.

Do this in your calculator to get your monthly payment:

0.14361679 ^ .053 * 0.016790427 * 40000
or $759.36.

The exact payment would be $760.36, so this is off exactly by $1.

In general, the method is to use
10.14361679 ^ (interest rate) * 0.016790427 * (amount financed)

The accuracy can vary depending on interest rate and the amount that you will finance. In general, this will put you right in the ballpark. The larger numerical errors occur for extremely high or low interest rates, so this works amazingly well for the range of interest rates that most people would expect to pay. This method gains accuracy as the price of the vehicle decreases. Even if you don't chose to try this yourself, a calculator still can help you check the dealer's numbers for reasonability.

Visit The Car Buying Bible (www.carbuyingbible.com) for more great car buying tips and a powerful car loan calculator.

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