Lector emptor (caution to the reader): The book from which I gleaned this information was printed in 1998. There is no newer version of it. Still, most of the tips are timeless.
Would you buy a used car from this man?
SHOPPING
Try to wait for one or more of the following:
Sales
The end of the day (an hour or two before closing – however, shop during daylight hours (floodlights tend to make cars look more exotic and can hide damage))
The end of the sales week (Saturday)
The end of the month (after the 25th)
The end of the quarter (end of year even better)
The arrival of a new model (motivates a dealership to discount their predecessors)
Be indefinite with the salesman about exactly what you want, and let them know you are shopping elsewhere and not necessarily buying today – you are not in a rush; just “window shopping.”
Be sure the vehicle you buy has a high safety rating.
If you have access to the book BUYING A CAR FOR DUMMIES, check features of the car you are considering against the checklist on page 129, 130 so that nothing important is forgotten.
Bargain up from the invoice price, then invoice price + 2% (you’ve got to give them some profit), not down from the sticker price. You can get this by googling the car make and model and price (e.g, googling “2022 Honda Insight invoice price” which not only shows $24,901 as the invoice price, but also the MSRP or “sticker” price ($26,205) and the target price (what you should be able to negotiate), namely $25,149.
Openly consult data sheets, or request a copy of the factory invoice that shows the invoice prices of the models and options you want.
After making an initial offer of 2% over the sticker price, or between $200 and $500 more, haggle until you or the dealer “runs out of gas” (but don’t accept a higher price than your pre-determined upper limit).
Have the highest price you are willing to pay in mind, and don’t budge from that. While negotiating/haggling be friendly and smile, but don’t budge from your bottom line. “This combination of friendliness, sympathy, and inflexibility really pays off.”
Get everything in writing. The smaller the type in any contract, the more attention you should pay to it. Draw a line through any blank spaces in the agreement.
Read the purchase agreement slowly and carefully before signing. Question everything you see.
Park your car down the street / out of sight. Evade their query about whether you are going to trade in a car; let them assume you will – that way you can negotiate a better deal because they are sort of expecting they will “make money” off your trade-in vehicle (they will credit you $X and then sell it to someone else for $X+). If they ask right away whether you are going to trade in a car, say “probably not” and refuse to discuss it further until the final phases of negotiation (if you “change your mind” and decide to trade in your old car to them).
When haggling, keep asking “Can’t you do better than that?” Let them know right off that you know what their invoice cost was. If they ask for a price range, reply, “What’s the best price you can give me” (if you give a range, they will not budge from the top of the range you’ve given).
Check Consumer Reports Annual Buying Guides for their recommendations.
Check out www.autobytel.com for info on cars for sale at dealers in your area.
Insist that there be no prepayment penalties. If you do prepay (pay the car off earlier than you have to), you can save on some of the interest (provided there is no prepayment penalty).
Leasing is usually the most expensive way to obtain a vehicle, and is fraught with perils.
You’re better off refusing to pay for the dubious privilege of hauling power seats around.
Even if they are legal in your State, never agree to a contract that stipulates the car is “as is” or “with all faults.”
If considering a used vehicle, check out www.carfaxreport.com for information on a specific car (need VIN or at least license plate # for this) – you will find out whether it was salvaged, had odometer rolled back, was returned as a lemon, etc. It costs $40 for a report (or $60 for 3 reports). The report is very extensive (you can check out a free sample report at the site given above); it seems like reasonable insurance to me.
The smartest thing to do, if possible, is to pay for the car entirely in cash. It’s also probably wisest to get a used car rather than a new one, as a new car loses at least 20% of its value the microsecond you drive it off the lot. If you can affirm the car is not a lemon, etc. (see carfaxreport.com note below), this can be the best deal you can make – a car new enough to still have lots of years left in it before it becomes a maintenance issue, but new enough to have the latest safety features -- and be considerably less expensive than a brand new one. If you “just have to” have a new car, can you “settle” for last year’s model? When the new models come out, the price of the previous year’s model may be reduced.
INSURANCE
Notify your insurance company about your car’s safety features – these may qualify you for special discounts on your premium. Avoid gray (harder to see, they are involved in more accidents).
FINANCING
When arranging financing, keep in mind that the APR will make a huge difference in your eventual price (if you get a good deal on the car from the seller but then end up overpaying on interest, it may not turn out to be such a good deal after all — A single percentage point of APR can mean thousands of dollars one way or the other). On that topic, the more you are able to pay “down,” the less you will have to finance (pay interest on).
Note: Financing rates are usually lower for new cars than used cars.
Don’t tell the dealer that you’ve been pre-approved for a loan from an outside source. Let them assume they will make more money from you via financing through them. Simply tell them that you haven’t yet decided on financing options – refuse to discuss any type of financing until after you have negotiated the lowest purchase price.
REGISTERING
Register the car in only one person’s name (if the registered owner dies, transferring the title to the surviving spouse is easy; but if the vehicle is jointly registered and is in an accident, the victim may be able to go after both spouses and incomes in a lawsuit).
WARRANTIES
Unless the sales contract stipulates “as is” or “with all faults” (which you should never agree to, because it gives you no recourse if the car turns out to be the perfect ingredient for a lemon meringue pie), implied warranties are in effect even if problems arise that are not covered by a written warranty or if no warranty was given. Dealers, of course, won’t volunteer this information (what you do know might hurt them).
Similarly, be aware that your opportunities to void the warranty are probably less extensive than dealers would like you to think. Don’t believe a dealer who tells you that you’ll void your warranty unless you have the vehicle repaired at their dealership using factory-authorized parts.
SELLING YOUR USED CAR TO A THIRD PARTY
Be prepared to settle for less than blue-book value.
Demand payment in cash. Otherwise, only accept a certified or cashier’s check. Allowing a private party to pay you in installments is courting disaster; if they default on the payments — even if you take them to court and win — it’s unlikely you will ever get your money.
When transferring the title, have the buyer meet you at the DMV. If you belong to AAA, Auto Club offices at some localities can handle the transfer for you.
NOTE: There is much more good and useful information in “BUYING A CAR FOR DUMMIES” by Deanne Sclar; these notes are simply the main things that I’m going to keep in mind as I search for my next vehicle.