Out With the Old, In With the New

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My new car! The 2018 Honda Civic EX Sedan in Cosmic Blue. I looooove it.

This weekend was a big one – I bought a new car and sold my old one! Angela saw my tweet about getting a good price on my new car ($1200 under invoice) and asked me to share my secrets, so here I am. I hope this is useful to anyone out there hoping to buy a car soon.

Step 1: Research. This was honestly the most time-consuming part. After I had an idea of my budget, and narrowed it down to the compact vehicle category, I started reading online reviews. I did not want to test drive more than 4 vehicles, but you may be more patient than I am. YouTube was useful for video reviews – I particularly liked the Kelley Blue Book videos. I also read through various written guides to get an idea of what kind of features I wanted (or didn’t care about), as well as safety features. When you narrow it down to a handful of models, you can usually find side-by-side comparisons online.

Step 2: Test drive. Do not even think about buying at this point. You are merely checking out the vehicle in person. It can be useful to make an appointment so that you’re not waiting for them to bring the vehicle to you. Some sales people are very chill – we had one guy let us drive the car without him, while you can expect most to want to ride with you and blather on about features. I liked the ones who told us very little except to give us directions on how to get back to the dealer.

Step 3: Evaluate and decide on a model. This can be tough when you’re dealing with so many different options and price points, including dealer rebates, etc. I ultimately went with the Honda Civic EX even though it was a few thousand dollars more than my second choice, mostly because my second choice didn’t have any other pros besides, “cheaper than Honda Civic”.

Step 4: Research price: MSRP, “True Market Value”, invoice, and rebates/specials. You can easily google all of these things without paying a dime. (I think that you used to have to pay for such a report. Not any more!) A few definitions:

  • MSRP: Manufacturer’s suggested retail price, or the sticker price. Never pay this – you can always negotiate lower than sticker price.
  • True Market Value“: this is data compiled by Edmunds.com on vehicles sold nationwide. They will give you the market average, what’s considered a “good” price, and what’s considered a “great” price. I can’t help but think these numbers are inflated, because 2 of 3 quotes I received came in lower than the “great” price. But I think these are good starting points.
  • Invoice: a.k.a., “dealer cost” which is misleading, because the true dealer cost is usually lower than invoice price. This is because there are hidden incentives with every vehicle between the factory and the dealer, so you will never know the true cost. Before I bought my car, the only rule of thumb I knew was to try to get $500 under invoice.
  • Rebates/specials: every dealer will advertise on their site if they’re having cash back deals or special financing rates. Traditionally, the deals get better as you go later into the year, but every car manufacturer differs in their release schedule. Toyota, for instance, already had 2018 cars on their lot in September 2017, whereas Honda didn’t have 2018 models on the lot until the very end of 2017/beginning of 2018.

Step 5: Research dealerships. There are so many car dealerships in my area that I basically started with the 3 closest to my house and went from there. You might also want to look at Yelp or Google reviews to read about other people’s experiences. I didn’t spend too much time doing that.

Step 6: Send an email/message to dealerships. The dealerships I messaged all had “Contact Us” forms on their websites. I left off my phone number (or created a fake one) because I didn’t want anyone to call me. This is what I wrote, which I modified from this very helpful post:

I would like to get a quote on the following vehicle:

1. Trim: 2018 Honda Civic EX Sedan, CVT, 1.5L 4 cylinder engine
2. Colors: Exterior – Cosmic Blue or Modern Steel
3. Accessories: None

I am aware of MSRP and invoice prices and would appreciate a competitive bid.

Please respond via email to this request.

Thank you.

Step 7: Wait for a response, then start negotiating. I received 3 quotes within 30 minutes of my initial email. One salesperson said he couldn’t give me a quote over email, until I told him I already had 2 from other dealerships. Then, he sent me a very competitive quote. I withheld information for as long as possible. For instance, I didn’t mention how I would pay (cash vs. financing) or if I was going to trade-in my current vehicle. All I was negotiating was the price of the new car itself. Everything I read online recommended doing that first, then adding the other stuff later. One thing you want to clarify is what’s included in the quotes — destination fee, etc.

I got a good vibe from G in Fremont — he was responsive and not overly pushy. Plus, he immediately kicked off the process with $1,000 under invoice! Just as I was going to say yes to him, another sales person came in with a slightly better deal ($30 less). So, I went back to G with the better quote, saying that I appreciated his responsiveness and that I’d like to give him my business, so could he go lower? He came back with $1230 under invoice, so I told him he had a deal. This was all within 2.5 hours of my initial email. I didn’t expect this to go so quickly! I didn’t immediately tell the other 2 dealerships that I had agreed to a deal with G, because I wanted something in my pocket in case this deal fell through.

Step 8: Buy the car. I made an appointment for Saturday morning. I told G that I didn’t want to haggle or be upsold when I picked up the car, and he pretty much stuck to that. He did show me two quotes (probably because his manager made him)- one with the basic features and price we agreed on, and the second with all weather mats and tinted windows. Hard pass. So, fortunately, everything with GM went smoothly. From a friend who had bought her car using this same method, I knew to expect to be at the dealership for 2-3 hours, despite ironing out the deal in advance. What took so long? We did a short test drive, signed the quote, decided not to trade-in my old car (another story for another time), then I got sent into the financing office to work on payment.

Step 9: Buying the car, part 2. UGH, the financing guy was soooo lame. I don’t think it matters whether you’re paying cash, financing, or leasing, they will try to sell you an extended warranty and maintenance package no matter what. As the financing guy started his spiel, I let him go through the first column (of 5!!!), then I interrupted him and said firmly that I would not be interested in any of these plans. He looked taken aback and said he had to go over the maintenance package, at the very least. OK, fine. I let him say his thing (with ridiculously overinflated estimates for oil changes, etc.), and then I said – again, firmly – no, thanks. The part that bugged me was when he went on to say, “I don’t think you understand what a great deal this is. Do you understand about maintenance?” I about blew my lid. WTF. Yes, I understand car maintenance. I’ve been driving for 25 years and I have a Ph.D., thankyouverymuch. I wish I had said this, but I didn’t. Anyway, there were more irritating parts to this story, but the end result is the same: JUST SAY NO (unless you want to, which by all means, say yes).

After waiting for another 40 minutes for the car to get detailed (tip: bring a book), I was done!! G showed me how to pair my phone up with the car’s Bluetooth, and then I was freeeee. It was all much easier and much much less awkward than I anticipated, minus the short episode with financing. If you have to buy a new or used car from a dealer, I can’t recommend this method enough. I had a terrible experience when I bought my last vehicle, and this way was much more empowering. I had all of the information and power at my fingertips, thanks to the internet! I have wondered if I could have gotten a much better deal (maybe, given how readily two salespeople went so low to begin with?) but I’m generally very satisfied with how this all went. Let me know if you have questions and I’ll try to answer them!

About

Howdy! My name is Jen and I live in the San Francisco Bay Area. I like to eat, run, and blog, but not usually at the same time.

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8 comments on “Out With the Old, In With the New
  1. iampotassium says:

    This is super helpful! I want to store it away for when I’m ready to buy a new car. 😀

  2. bt says:

    Well done! I refused to sign the financing documents on our last car purchase because we were paying cash from the totaled car insurance payout. They tried to insist that we still had to sign the financing documents/run our credit/etc. but that the financing amount would be $0. I kept refusing. I pointed out that the financing contract had all sorts of requirements, for example that we couldn’t take the car out of the country, and that I didn’t want to sign up for those, since we were buying the car outright. At one point they claimed they had to run our credit for security purposes under the US Patriot Act — I lost it and explained that I’d read the act and there was absolutely nothing in it that required them to run our credit for a cash purchase. It was a long, frustrating, and entirely useless process, but in the end, they finally *let* us purchase the car without signing any financing documents or running our credit. It was so annoying that it’s definitely part of the reason why I didn’t buy a new car when we got back from our year of travel. We are happily a 1 car family now. Glad you had a more pleasant experience.

    • Jen says:

      Wow, that sounds so frustrating! Good for you for sticking to your guns. I’m guessing that most people simply relent under the repeated pressure (and false pretenses). I emailed some feedback to my salesperson about the financing guy. Maybe it will help them improve their customer relations, but I highly doubt it.

  3. Angela says:

    Thanks for posting! I’m most likely going to replace my car when our garage is done so it’s nice to hear from someone with a recent experience. I’m planning on getting a used one, probably, but I bet a lot of the same points apply.

    • Jen says:

      Yes, I think the same points apply if you’re buying used from a dealership. Knowledge is power. I’ve heard good things about CarMax — more on the selling side of things, but it sounds like they might be less smarmy than most dealerships. Good luck with your purchase!

  4. ErinAMG says:

    Thanks for sharing, and congrats on your car purchase! It sucks that there are so many scummy sales people out there and that you (no doubt) were treated dubiously by the finance guy — you totally should carry around a pocket version of your PhD!!, haha — but I’m glad that overall, this was a better experience than your last time. Good luck with your old car, too, whatever you end up doing with it!

    • Jen says:

      Thanks! I ended up selling my car to a running group friend, whose daughter just turned 16. It worked out great for both of us!

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