The Problem with Car Buying Services
In some cases they can be, but if you're willing to spend some time getting competitive quotes from multiple dealers, you'll usually be able to beat these prices by at least several hundred dollars.
The major problem with most of the car buying services is that they don't really make dealers compete for your business.
It's more like a referral program where all car buyers within a certain location are directed to one exclusive dealer. This dealer agrees to a pre-negotiated price (which is usually pretty fair), but they also have to pay a commision to the car buying service - usually between $250 and $500 per vehicle sold.
Another thing you need to watch out for are the extra fees that might be charged with these services. Some don't list dealer add-on fees or the dealer doc fees, which could add several hundred dollars to the price of the car - and you won't know about it until you get to the dealership.
Some dealers may also try to change the price once you show up to the dealership, or they may tell you the car you wanted is no longer available. They know you've driven far and are ready to buy - and they try to pull a fast one on you.
But even with these drawbacks, car buying services are not a bad idea for someone who wants a fair price but doesn't want to spend ANY time researching or negotiating with a dealer.
However, since you're reading this site, we're assuming you won't be happy with just a fair price. You want the BEST price possible, and the only way to achive this is to use our step by step car buying method.
If you do use a car buying service, I recommend you use their price as a starting point. Shop it around to other dealers and see if they can beat it - which in many cases they will since they won't have to pay the $250 to $500 commission.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid