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Buy A Car For Less: Insider Tips

Updated on September 6, 2015
asterion profile image

I worked as a manager at a medium-sized Dodge, Chrysler, Jeep dealership for over fifteen years.


Five Easy Ways Spend Less On Your Next Vehicle Purchase

Buying a vehicle doesn't have to a painful experience. Here are a few tips I learned from fifteen years in the car business:

1.) Timing does matter. Keep an eye out for older inventory. If you have been driving by the lot and seeing a particular vehicle parked there for months there is a strong chance the dealer will make you a good deal. Many people do not know that dealers pay interest charges every month on the majority of the cars on the lot. This can amount to thousands of dollars on higher-priced vehicles over a six month period. Add in advertising costs, labor to keep the car clean, gas for test-drives, snow removal, etc. and the dealer expenses really mount up. Therefore, the longer the vehicle sits on the lot the higher the cost is for the dealer.

Often the reason the vehicle has not sold is simply an undesirable color or option package. If you are not fussy about either you can really score a deal. Used vehicles may have minor flaws such as body damage or bad tires. Ask the dealer for help...sometimes the upgrades cost less than their monthly expenses so they may agree to it.

Manufacturers no longer do all of their new product launches together in the fall like they did in the past. New products are released throughout the year. If you are interested in a certain model it is a good idea to purchase a leftover before an updated one is released because dealers do feel some urgency to get rid of the old inventory before the new arrives. Rebates and discounts are usually announced about a month before the new product launch. Watch the manufacturer's website for details.

Vehicle sales in general tend to drop off drastically in the winter. If you can afford to buy the week before Christmas the salespeople will fall over themselves to help you. Inventory levels are low because managers do not want to pay inventory expenses through periods of slow traffic so if you are particular about what you want you would be better off to shop in November.

Buying at the end of the month may also help. In the recent past manufacturers set quotas for each dealer with huge monetary rewards if they were met, but nearly all have discontinued this practice. However, your salesperson will likely have a monthly quota set by the dealership so there is some benefit to be gained by shopping at the end of the month. But know this: the paperwork has to be completed and the vehicle in your possession by the last day of the month so it is a good idea to start the process at least a week in advance in the event you run into snags. New car rebates expire at the end of the month so if your purchase is not completed you could potentially lose thousands of dollars in discounts.

2.) Shop for the best interest rate. Most dealerships will offer to arrange financing for you as a convenience. Ask what the interest rate on the contract will be and if there are any related fees. If you are not satisfied with the rate you are being offered ask them to check other banks as most dealerships have relationships with several lenders. In order to get the best rates you need to have excellent credit.

Check your local credit union too. They generally offer the lowest rates available. It may require a little legwork on your part, but can definitely be worth it. Lowering your interest rate just one point can potentially save thousands of dollars on a long-term loan.

Difference In One Percentage Point

Loan 1
Loan Parameters
$30,000/$0 down/72 months
$30,000/$0 down/72 months
Total Borrowed
The total loan amount for option 2 is $975.15 higher despite being only one percentage point difference.

3.) Skip the extras. This includes all the other junk they try to sell you at closing including: service contracts, accessories, life/disability insurance, gap insurance, tire protection and so on. Aftermarket products and accessories are huge profit centers for the dealership. They can cost you thousands and often do little or nothing for you. If you do feel the need to purchase any of these options negotiate the price (yes, you can do that) and pay cash for them. Do not finance with the vehicle or whatever you buy can cost hundreds more in interest by the time the loan is paid. Most of these add-ons can be purchased after the sale so don't feel pressured to make a snap decision. There are a few exceptions that can provide value, but choose wisely:

*Service contracts/ extended warranties. Some customers get a lot of value out them, most don't recoup the amount spent. That being said, however, one transmission replacement can far exceed the price you paid for the contract. It's a gamble. There is no way to determine if this will be money well-spent without a crystal ball. I would never recommend one on a new vehicle purchase. The manufacturer's warranty covers any defects from the factory for the first few years and "wear and tear" items like brakes are not covered in most cases. Used vehicles with high mileage (over 100,000 miles at the time of sale) are generally not covered.

Read the fine print carefully!! Know exactly what is covered. These are a huge source of complaints because customers are often told that "everything" is covered. (Never true.) Most don't cover regular scheduled maintenance like oil changes. Most also have a deductible that you will be required to pay. If you do purchase and are unhappy you have the option of cancelling. Regulations vary from state to state but the variety that we sold offered a full refund within 30 days and after that pro-rated the refund to how long it was in effect.

*Accessories can add to the residual value of your vehicle when you are ready to trade again. Paint and/or upholstery protection is a little pricey but can provide good return on your investment. Neatniks who maintain a spotless vehicle can opt out of this, but most of us can use help keeping our car in good condition until we are ready to trade.

Some other good choices add utility like roof racks, side steps, and trunk organizers or protect the appearance like mudflaps or door guards. Avoid any choices that overpersonalize your vehicle or are too taste-specific. Neon green flames may be your thing, but if your mother wouldn't be seen riding in it chances are it is not a good choice.

4.) Think outside the box. You have negotiated your best price and are still higher than what you hoped to spend. What now? Sometimes the dealer simply can't afford to lower the price any more, but that doesn't mean you are out of options. Ask your salesperson if they can throw in some extras like a service contract ($500 to $2400), free oil changes or car washes ( 3 equal about $100), the sweatshirt and chrome wheels you liked in the accessory shop...

Perhaps the dealer down the street made you a slightly better deal. Consider that some dealers offer extras that can really add value. My dealership offered VIP cards to everyone who purchased a vehicle that included 4 free oil changes, discounts on 6 more oil changes, a 10% discount on accessories and rental cars, as well as a full tank of gas on delivery and free first state inspection. This represented a $350 value that other local dealers weren't offering. Shuttle service, free loaners and discounted rentals when your vehicle is in for service can save you not only money, but time and hassles too. Make sure you include these factors in your decision if the deal comes down to $100 difference in price.


5.) Build a relationship with the dealership. Loyalty counts. It may not be fair, but it is definitely true. Sales staff are more likely to make concessions if they know you'll be back. Fact: It costs considerably less advertising dollars to keep an existing customer happy than it is to find new customers. Dealerships know this and want every customer to be a lifelong customer. Lifelong customers will patronize the service, parts and body shop departments. They are also likely to refer the dealer to friends and family.

How can you leverage this to get a better deal? If the salesperson believes you are, or have the potential to be, a long-term customer you may receive better service. Joe Blowhard who comes in once every five years to abuse the salespeople and inevitably purchase his vehicle at the dealer down the street will not garner the same respect. Here a couple easy ways you can make your face a familiar one to dealership employees:

  • Stop by on your lunch hour and ask for a brochure. Be upfront with the sales staff and let them know you only have a few minutes and you aren't ready to buy. Wasting their time won't help you in the long run.
  • Have your yearly state inspection done at the dealership. It costs the same as the service station down the street and you have to do it anyway.
  • Stop in for an oil change or other maintenance. There is a perception that service costs more at a dealership. The hourly rate may be higher, but most maintenance services are flat-rate and very competitive. This is a great opportunity to observe the sales department and get to know some of the staff.
  • If your family, your best friend, your boss or your neighbor has been buying or servicing vehicles at that dealership for years mention it to the salesperson. On a side note: My dealership paid a $25 referral bonus to any customer who purchased a vehicle and then referred us to someone else who bought a vehicle.

Buying a new or used vehicle can be a difficult process, but if you enter into it as an informed consumer and treat the salesperson as you would like to be treated it can be a very rewarding experience.

Have you had a bad experience when buying a vehicle? What was the reason?

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    • asterion profile image

      asterion 6 years ago

      I appreciate the feedback, MileMarx.

    • profile image

      MileMarx 6 years ago

      Thanks, I agree with all the points, especially with the "Loyalty counts" one. Once you have bought one car from them, they sure take you seriously.