buying a car

How to Buy a Car Without Losing Your Mind (or Your Wallet)

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By Erin Wood

Having to buy a car is like having a sliver stuck under my fingernail. It’s painful and annoying, I know I have to deal with it, but it’s going to take forever. Might as well pack a lunch too, because the second you decide you want to test drive something they have you trapped.

Once you decide to purchase, the whole day is gone. If you have your children in tow, that “forever” feeling is compounded by the second as they ask you for the hundredth time: Are we done yet?!

The whole experience is maddening from the second you step on the lot and sales sharks start swimming, right up to the end when the “manager” down the hall finally approves your deal. You think you are done, but, oh no, now you wait for the finance guy and start the next annoying stage of the deal. When it’s finally finished, you are exhausted and pray you don’t end up with a lemon or worse – regret your decision for months to come.

As enjoyable as a sliver under a fingernail. Financial life is full of these little annoyances, but the more research and thinking you do ahead of time, the better. Here are my four steps for eliminating as much pain as possible when you’re in the market for a car.

Step One: Do your Vehicle Research at Home, Not at the Dealership

I never show up at a car lot without knowing exactly what vehicle I’m there to test drive. This includes the exact version and trim package I’m interested in. If you show up there clueless they are going to show you the most expensive model because it’s a good sales tool, no one wants to move down levels.

This is where the internet is your friend. Everything you need to know about a vehicle is easily available. Personally, I drive a lot of miles and choosing a vehicle that has higher MPG is a cost savings measure that will help my monthly cash flow for years to come. By eliminating vehicles that are above my price target or below my required MPG, I have a more reasonable list to research. Resources like Consumer Reports and JD Power have almost everything I need to make my test-driving list before I go to buy a car.

Step Two: Control Your Car Status

I get it – we all have a little bit of keeping up with the Joneses to deal with. Depending on where you live or the type of job you have there will be some pressure to fit into the expectations. Find a person who wants to look like a successful salesperson and you will find a BMW to match.

I’ve been a financial planner for 16 years, 13 of those I’ve driven a Hyundai. I’ve had people make fun of me. People have told me I need to purchase a car that equals my job. I even had people laugh and think I’m joking.

Although, I’ve never met Warren Buffet, Mark Zuckerberg, or Jeff Bezos I really appreciate their low-cost vehicles. Sure they can afford a luxury car but putting those dollars to use somewhere else is more important to them and me too.

Step Three: Have a Shopping Partner

When you go to buy a car, one of the most painful parts of the process is the salesperson who won’t stop talking. I’ve done my research and now I just want to see what the car feels like. If I sit in the driver seat does it feel comfortable? Can I easily reach all the controls? Does it have blind spots I don’t like? Does my tall husband’s head hit the ceiling? (Yes, this is an actual concern in our house).

Occasionally, you strike gold and find a salesperson who really does a great job of asking questions and helping you solve a need. If not, this is where your shopping partner comes in. Their job is to keep the salesperson busy. My husband will stay outside the vehicle and keep the salesperson away from me, which leaves me in the peace and quiet to test everything I want or wander around the lot until I find the right choice for me.

Step Four: Know your Financials – and the Dealer’s Too

During my research, I have already learned the price of the vehicle. For this, I need to learn the MSRP, Invoice Price, and the actual price individuals in my area are paying.

Sometimes the Invoice Price is called the Dealer Price but this isn’t correct. Dealers receive an additional discount called a Holdback usually between 1 – 3 percent. There are many websites that will give you the MSRP and Invoice Price for free.

Rebates are offered by the manufacturer, not the dealer! This is important to keep in mind because this is additional savings that can help me get under the invoice pricing and it doesn’t impact the dealer.

Finally, know your credit score and calculate your payment before going to the dealer. I refuse to play the “What do you want your monthly payment to be?” game. This strategy can cost you a lot of extra interest over the life of your loan.

This is also the stage my husband and I like to flip roles until now he has been Bad Cop (remember his job: keep the salesperson busy), now it’s my turn. The salesperson will start talking numbers with the person they have already been talking to. My husband just shakes his head and says “The numbers are all her.” I pull a financial calculator and all my research out of my purse. The salesperson’s face drops in disappointment as they come to the realization they have been talking to the wrong person and I’m not here to get a raw deal.

Game on.

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