New Car Buying Tips: How to Get the Best Deal on a New Car

Buying a new car is a big deal, especially when it is your first.  In 2002, when I was 17, my parents bought me a beat up black 1999 Grand Prix that I absolutely loved.  I put that puppy through a lot and it was passed down to both my younger brothers before making its way back to me.  This past summer, my beautiful baby died — about a year earlier than I hoped and left me stranded.

I have no debt and despite the preaching of many to never by a new car, I felt it was the right move for me because I plan on keeping it until it eventually dies.  Since this was my first time buying a car, I was nervous — but I read up and talked to some friends before starting my car buying journey. Here are a few steps I took:

1. Know your budget

Before you can even begin to figure out what kind of car you want to buy, you have to know your budget.  Whatever amount you are comfortable with, set that range you’re able and willing to spend before hand.

When you know your budget, it will help you determine where to begin.

2. Research

Once you know your price range, start your research.  The best way to research nowadays is online. Sites like Edmunds.com give you comprehensive information and ratings about the vehicle along with safety, fuel efficiency, and numerous consumer reviews. Researching online will give you the information necessary before you even step into a dealership. This will help you narrow down your choices, as well as help you think of a few questions to ask the salesman.

From these sites, you can also find the MSRP and the invoice price of the car you want.  These numbers are important information to help you negotiate for the best deal. Obviously, you are trying to pay closer to the invoice price than the MSRP.

Once you narrowed down your selection and have a good idea of prices, head to the dealership.

3. Test Drive

In no way shape or form should you be thinking about buying when you go to the dealership for the first time.  You are there to test drive and you should make that known right away.  Try to test drive all the cars you want to check out on the same day.  This will help you better compare the cars and make it easier to narrow down your options.

Tell the salesman you are looking to buy a car within a certain time period, that you’re visiting a few dealerships to test drive, and you would like to test drive one there.  When you’re test driving, ask the salesman all the questions you have and don’t show any emotion. If they ask you if you like the car, even if you love it, a simple “it’s ok” will be all they need to hear.

Hopefully, you found the car you love by the end of the day.

4. Negotiate

Call the salesman with an offer price that is closer to the invoice price and indicate that you want to buy very soon.  Let him know you are serious and he will be more willing to negotiate.  When he goes to check with his manager and come back with a counter offer, tell him you are busy and that he should call back in 2 hours with a lower number. If the salesman wants your business he will call back.  That’s what I did a few times with my salesman and he kept coming down until the limit was reached.

Another option is to sign on to a car aggregation site where you will fill in information about what car you are looking for, and let dealers contact you.  Personally I tried this and didn’t like it at all.  I got tons of spam emails and annoying phone calls from salesman I didn’t meet in person.  I liked the personal touch my salesman was giving me and I wanted to stick with him.

After a few rounds of negotiation, you will hopefully get to a price that you are comfortable with.  I bought a 2009 Honda Accord with no extras and was able to get it for a total of $19,999 including . I considered this a win since my goal was to get it in for under $20,000.

5. Trade-in

Once you have negotiated a price, then you can negotiate a trade-in.  Always wait until the end to negotiate a trade-in.  Many would recommend you sell the car through Carmax or Craigslist to get more money.  I just traded it in with the dealership for $500, since I basically had to push my car just to get it to the dealership.

I plan on keeping my car for at least 10 years and will be taking good care of it to make it last that long.  That’s my intention and why I think it’s worth it for me to buy a brand new car.

About the Author

By , on Feb 8, 2010
Craig Kessler
Craig Kessler is the marketing director of BudgetPulse. He manages and writes on the BudgetPulse Blog. Please visit BudgetPulse to learn more about the personal budgeting software.

Leave Your Comment (6 Comments)

  1. Craig says:

    @kenyantykoon I am always the same way as well. I saved up for months before buying my TV and computer. But with on debt at all, I pay my bills right away in full, I figured financing a car that I know will last me a decade is not the worst thing in the world. Especially with the timing of the recession and the timing of buying the older model as the new ones came out, I got a price I was satisfied with paying. To each their own, but if the timing is right for you to buy a new car and you can work a good deal especially with financing options, you may want to consider.

  2. Craig says:

    @Tommy Only reason I disagree is because of the time factor. People are busy and if you have done some research beforehand and take the time to go out of your way to the dealership, you might as well test drive what you are looking for. You may not know when you will have a chance to get back. Also, buying a DVD or t-shirt is an impulse buy. Buying a car should not be some sort of impulse buy regardless of your feelings after a test drive.

  3. Tommy Salami says:

    I wouldn’t even test drive on your first visit. Sit and look, see what they have. A test drive often leads to an impulse buy.

  4. kenyantykoon says:

    this is all very interesting but since i decided to walk down the road less traveled (read frugality) i have made up my mind that if i cannot afford to pay cash for something no matter how insignificant, then i dont need it. this rule especially applies to expensive things like electronics and cars. truthfully, i have never owned a car and i at the moment, i have no need for one but like all petrolheads, i like the the sound of high powered engines. so applying delayed gratification to the equation, i will wait until i can buy a brand new machine for cash, no matter how long i have to wait. And before i buy it, i will take your advice and take it for a test drive 🙂

  5. Craig says:

    @Allison Thanks, it’s always better to buy also when you don’t have to buy a car, so you don’t feel the pressure and time constraint and can be more relaxed to look and negotiate.

  6. Allison Crawford says:

    Great tips, will keep in mind next time I`m purchasing a car.

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