How to Buy a Car

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The way some people talk about car dealers, you would think it is more fun to get a root canal than buy a car. However, the process does not need to be painful. With a little search information, some negotiating tips and some financial knowhow, you can enjoy your new car without worrying about the boring bottom line.


The first decision you should make is whether to buy a new or used car. Each option has its advantages and disadvantages. For instance, with new cars, you will have a warranty, the new car smell and more peace of mind. However, depreciation will be higher, as will the price of the car and the price to insure it.

Used cars have advantages as well. They are usually cheaper, will depreciate less over time and may even come with some warranty if you buy a young enough car. However, you may not have any warranty left, the interest rate on a loan is usually higher for a used vehicle, and you always run the risk of getting a lemon. A car is not only a financial purchase, but also an emotional one. In the end, you need to choose the option that both makes financial sense and makes you happy.


How to Buy a CarKnowledge is half the battle when shopping for a car. First, have an idea of what you want to buy. To get information, consult magazines and automotive websites to see just what type of car you want. Keep your options open; don't limit yourself to only the brands your friends and families recommend, especially if they are not experts either.

After you have specified the type of car you want, find the dealer cost. For new cars, this is the invoice price. The invoice price is the price the dealership paid for the car. This price is the same for every dealer. The invoice price can be found on many sites, including

Finding the prices for used cars is a little bit trickier. Most used cars come from auctions so the price of the car is not easy to find and varies between dealers. However, there are tools to find the fair value of a used car using sites like Kelley Blue Book.

Beyond the car, see how much you can spend. Figure out what you want to spend total, what your down payment will be, and what you can spend monthly on payments. If you can swing it, pay it all in cash.


By the time you have walked into a dealer, you now know what you want and how much you want to pay. Many of a salesman's weapons have now already been taken away. Don't be too eager to drive the car and negotiate. Let the salesman come to you while feigning interest in the car. Eventually, take the car for a test drive.

There are a few criteria to pay attention to on a test drive. First, determine if the ride quality is too hard or too soft for your liking. Second, pay attention to the engine characteristics. Is the acceleration adequate for your tastes? Is the engine too loud? Too quiet? You be the judge. Don't let the salesman talk too much. Be polite, but make sure they are not distracting you from the task at hand.

After the drive, go over every detail on the exterior and interior, checking for flaws but also making sure you like the way the car looks.

If you are driving a used car, you have a few other chores to do as well. First, turn the radio off; you won't be able to concentrate with it on. Listen closely for any knocks, groans, squeaks or creaks from the engine or the car itself. Especially pay attention when the car is going over bumps; this will show if there are any faults in the suspension.

After parking the car, check the body for waves or discoloration. These errors will tell you that the car has been repainted at some point. Also check for uneven panel gaps as they may point to possible frame damage the dealer is hiding. All of this is important in deciding whether you want the car, and for negotiating the price down.


At this point you are ready to talk about price. Before you start to negotiate, here are a few tips.

First, drink water, not caffeinated beverages. Caffeine makes you more likely to agree with people and react quickly to offers, a trap the dealer would love you to fall in. Second, don't disclose what you want to spend. Doing this is the same thing as holding your cards the wrong way during a poker match. If the dealer knows how much you can spend, they won't want to negotiate as much. Finally, do not get attached to the car. Be willing to walk at any time if the deal isn't right. Like fish, there will be plenty of cars out there for you to choose from.

How to Buy a Car

Also, dealers will try a few tricks on the financial end of the deal. First, they will manipulate the time of the loan to make your monthly payments look smaller. Don't fall for this. Always negotiate the price of the car, not the monthly payments. Second, they may infer that they have other buyers for the car; the car is hard to come by, etc. Unless you are looking at Lamborghinis, this is a lie as well. It is called the Principle of Scarcity and it is designed to make you more susceptible to purchasing. Finally, a dealer may throw on extra options and features to blow up the price, or to try to sweeten the deal. If you do not want them, or cannot afford these options, thank them for the offer but bring them back to focus on lowering the price.

Now we can focus on just how to find the right price for a new or used car. Naturally, the process differs between the two scenarios.


Contrary to popular belief, profits on a new car are sometimes very small. Because of this, you may not be able to negotiate the car down too much. But do not be discouraged; there is still plenty of room to haggle. You should have already found the invoice price, but there is a bit more information you can find that will be helpful. Some sites like tell you what other people have paid for a car. For example, on, I searched for a VW GTI 3-Door, manual/automatic transmission, with a sunroof. In the results, it showed that the MSRP is $28, 265 on average, the invoice price is $27,165, and what people actually pay is around $26,795, a full $2,000 under the MSRP. The numbers vary for each car so make sure to look up your specific choice. There are a variety of different ways to negotiate down to that price but in the end, having information such as this is crucial in getting a fair price for your car.

There are a few old fashioned tricks to use that may even get you under that price as well. First, use multiple dealers to your advantage. Go to multiple dealers and get competing bids. Subtly drop the other dealer's offers to the current dealer; this will create a bidding war that can only help you. Second, shop at the end of the month. Near the end of the month, dealers are trying to get rid of their old inventory. What this means is that they may be willing to let a car go for less cost, just to get it off the lot. Finally, try to shop near the end of the car buying season, such as fall or winter. At this time of the year, dealers are gearing up for next year's inventory so they are extra motivated to get rid of their stock.


How to Buy a CarThere is more room to wiggle in the price of used cars, but less hard data to reference. First, of course, get the vehicle history report. You can use Carfax, but another option is Decode This!, a site that gives you the vehicle history once you have the vehicle identification number (VIN). You need to make sure you are dealing with a good car before you can even talk about buying it. I look up the VIN myself, usually, just by using my phone. Some companies, like Decode This! even have apps. Second, feign interest in the car, and bring up flaws such as paint scratches and dings and then mention that the car is the wrong color. This puts the dealer on the offensive to get your business. Finally, look up the fair value of the car on sites like and use it as a guide to see if you are on the right track to receiving a fair price. Once again, never get attached to the car, and it's better to shop at the end of the month.

Buying a car does not need to be a painful endeavor. With a few tips and tricks, you can turn the tables on the car dealers. If you are educated on your decision, and are a strong negotiator, you can trim thousands off the cost of a new or used car. Saving money makes the drive even more fun!

Check out our Get Real Guide for Men regularly for more tips for the everyman!