The Car Buying Guide for Extreme Savers

5-Step Quick-and-Easy Check List


Get ready to become a lean, mean, car-buying machine...

How to Get the Best Car Deal With Minimum Effort

If you're looking for the easiest way to maximize savings when buying a new car, then this 5-step check list is your best guide. It's the result of over 4 years of in-depth research covering every aspect of the car buying process. I've spent thousands of hours studying and writing about this subject, and actually tested the methods in the real world as a professional car negotiator. Rest assured, I've done all the research so you don't have to. I urge you to read my story to see how I went from being a clueless car shopper to expert price negotiator.

Be sure to read the Detailed Guide for a full and comprehensive overview of each step.

Step 1. Get the Best New Car Price

First, gather price bids from the following sites...
TrueCar - to see the TrueCar price, you need to select the vehicle, then click the orange button that says "Locate Dealers"
Edmunds - to see the Edmunds price, you need to select the vehicle, then click button that says "View Price Now"
After you get price bids from TrueCar and Edmunds, you need to follow these steps...
Use Cars.com to locate all nearby dealers - View Video Instruction
Call additional dealers and get the internet sales manager's email using this phone template.
Email each one this initial bid proposal
If they don't respond within 24 hours, send them this follow-up email
Repeat until you accumulate at least 7 price offers (including TrueCar). The more price offers you get, the better. Expand your search up to 500 miles if needed.
At this point, you should have at least 7 price offers...
Start with the dealer that offered the worst price and call or email them with the following final offer message. Work your way up until each dealer has gotten a chance to beat the best offer on the table. (for CarWoo bids, just use their messaging system)
At some point, there will be one offer that no other dealer can beat. Use this message to try to knock an additional $300 off the price.
Once you've agreed on the lowest price, get a signed purchase order from the chosen dealer. Make sure it includes the Vehicle Identification Number (VIN), MSRP, Invoice Price, Selling Price, all fees including tax, title, registration, and doc fee, plus the OTD (out the door) price. Take this to the dealership and sign the paperwork to complete the process.
[ Review Detailed Instructions for Step 1 ]

Step 2. Get the Best Financing Rate

First, know your credit score and fix any errors in your credit report ...
View Your Credit Score - your score determines what rates you qualify for. Anything above 680 is good, anything below 620 is poor.
View Your Credit Report - By law, you get to view your credit report once per year for free. Errors in your report are common and can cause your rates to increase. Check to make sure there are no errors.
Begin your loan search using Credit Unions ...
If you are currently a member of a credit union, start by getting an auto loan quote from them
Use FindACreditUnion.com to search for credit unions that you can join easily (some provide car loan rates on their web sites).
Get rate quotes from online lenders...
Get rates from Auto Credit Express, a tool that allows you to get multiple loan rate quotes from multiple online lenders.
Get a rate quote from My Auto Loan, one of the few direct online lenders.
Get rate quotes from Banks ...
First, get rate quotes from banks that you currently do business with. Next, make sure to get rates from the three largest auto lenders: (1) Capital One, (2) Wells Fargo, and (3) HSBC
Allow Dealer to try to beat your best rate ...
Setup a loan through the lender that offered you the best rate. They will provide you with a check that you can take to the dealership. Before you use it, try to get the dealer to offer you a better loan rate through their lender network (including the manufacturer's finance company).
[ Review Detailed Instructions for Step 2 ]

Step 3. Get the Most for Your Trade-In

You'll get the most money if you sell to a private party, especially if the car is older and has more miles ...
View List of States with Trade-in Tax Credit - If your state is on the list, you will benefit from trading-in your vehicle to a dealer. If not, it makes even more sense to sell your car to a private party.
If you don't mind selling the car yourself, follow my Guide to Selling to a Private Party
If you would rather trade-in the car to a dealer ...
Use the following pricing guides to get a ball-park value for trade-ins: Kelley Blue Book and CLEAR Book.
Make sure to thoroughly wash and clean your car and gather all maintenance records in one place. Change the oil and filter if needed, replace broken lights, and fix any minor surface damages such as paint scratches or chips.
You're now ready to shop your car to dealers...
Locate the closest dealerships that carry the same brand of vehicle you're selling. (If you're selling a Toyota, locate the closest Toyota dealers)
Call each dealership and ask to speak to the person who buys used cars. Tell them the year, make and model you're selling and ask if they would be interested in seeing the vehicle. If not, you've saved yourself a time-consuming trip.
Try to get at least three dealers to offer you a bid. If there is a CarMax near you, call them as well. You can also call dealerships that don't carry your brand but are close competitors (e.g. Toyota and Honda).
Bring your vehicle to the dealers that are willing to give you a quote. Use this Negotiating Method to drive the price as high as possible.
Once you get the best price offer, try to get the dealer where you're purchasing the new car from to beat that offer. If they can't, at least have them match it so you can take advantage of the trade-in tax credit if applicable.
[ Review Detailed Instructions for Step 3 ]

Step 4. Get a Deal on Extended Warranties

The best extended warranties are backed by the manufacturer. You can only buy them through a dealer...
Only new car dealers are allowed to sell extended warranties backed by the manufacturer. You can buy from ANY franchised dealer in the country. Use online discussion forums to find dealers selling extended warranties at low cost.
Contact at least 4 dealers and ask to speak to the finance manager. Find out how much they charge and the terms of the extended warranty.
There are only two independent warranty providers that I recommend. Their warranties are usually less expensive than the manufacturer-backed warranties...
Warranty Direct - they have been doing business for over 30 years and provide discounted extended warranties.
CARCHEX - they have been providing warranties for over 10 years at large discounts.
Final step is when you actually purchase the new car....
Now that you have price quotes for your extended warranty, try to get the dealer you're buying from to beat your best offer. Remember, there's a lot of wiggle room in prices.
[ Review Detailed Instructions for Step 4 ]

Step 5. Get the Best Price on Car Insurance

Car insurance rates vary dramatically, so the first thing you need to do is compare rates ...
Select your state and get a quote from each insurance provider
 
Set your deductible to $1,000 (this can save you up to 40%)
Try to Improve Your Credit Score (this can affect your rates by up to 50%)
Report reduced mileage (especially if you drive less than 7,500 miles per year)
Take advantage of all Insurance Discounts
Choose to buy a vehicle with Low Insurance Costs
[ Review Detailed Instructions for Step 5 ]



You:"Hi, I'd like to speak to the internet sales manager"
Receptionist:"Hold please..."
Internet Manager:Hello, how can I help you?"
You Hi, I'm interested in a (Year/Make/Model). I'm ready to purchase in the next couple of days, so I'm calling around to see who can offer me a good deal. I'd like to send you an email outlining the options I'd like along with some additional questions. Can I get your email address?
Internet Manager:Sure. (gives you email address)
You:Thanks.
×
×
×
You: "Hi, this is [YOUR NAME],

thanks for sending me the bid for the [YEAR/MAKE/MODEL]. You had quoted me [$] under invoice. The best offer I got was [$ ] under invoice. Now, before I give you an opportunity to beat that bid, I did want to let you know that I'll be giving a 100% score on the Customer Satisfaction Survey. Also, if I buy from you, I will be servicing my car at your dealership. Taking that into account, what's the best price you can offer if I come down and purchase today?"

Internet Manager:[Offers lower bid]
You:"That's great. Thank you. I still have some more calls to make, but I will call you back with my final decision." [If dealer can't offer a lower bid, thank them and move on]
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"I'm very close to making the purchase, and I do prefer working with your dealership. But I do have a bid that is $300 lower. If you match it right now, I will come down and buy from you today"

$300 is the magic number. You won't get them to agree every time, but some will drop the price another hundred or two. If they don't budge, ask them to give you a year of free oil changes (of course, only if they're conveniently close to where you live). If they don't budge at all, just tell them the other dealer was located further away and it wasn't worth driving that far for the small savings.

If you try to bump them down more than $300, they tend not to believe you.

×

When you get to the dealership, ask to see the person you spoke with. They will take a look at your car and come back with a price (usually a low-ball offer). No matter what price they quote, tell them the offer seems low compared to what you've been quoted elsewhere. They will either say that's the final offer or will ask what price you've been offered elsewhere.

Whatever price they first quote, come back with a price about 15% higher. So if they quote you $10,000, tell them that you believe the car is worth at least $1,500 more. Wait for their response. If they say "no way", ask if that means the first offer was their best offer. If they say "that's too high", ask them how much higher. Chances are, they will offer you a higher price.

You're not done yet. Tell them the car is in great shape and won't result in any problems. Counter with a price halfway between their last offer and your original counter-offer. Say you think the car should be worth that much and see how they respond. Either way, when you're done, you will have a good idea as to what your car is really worth. Repeat this process until you get offers from 3 different dealerships. ×