Car Shopping? Avoid These 4 Pitfalls

by Miranda Marquit · 7 comments

One of the most frustrating activities you can engage in is car shopping. (I’m not very fond of any type of shopping, and car shopping is the worst of all.) At least it’s not something you have to do very often.

If you are car shopping, it’s important to avoid the following pitfalls, as they could get you locked into a loan you don’t want:

1. Sitting down to talk numbers

Once you enter the dealership and sit across from the salesperson at the desk, you’re on someone else’s turf. Not only does the pressure to buy go up, but the longer you’re there, the more inclined you are to buy the car. Sometimes the salesperson will even leave to “see what can be done.”

My friend Geoff, who runs FindTheBestCarPrice.com, once told me to negotiate via email or phone — especially for a new car — rather than going in to the car dealership to talk numbers.

2. Focusing only on monthly payments

When the salesperson asks you what you were hoping to pay each month, he or she is trying to get you into the most expensive car possible. The best way to get you to buy a more expensive car than you’d wanted is by focusing your attention on the monthly payment, rather than on the total cost. You can make a more expensive car — with a longer term and a higher interest rate — “affordable” by focusing on the lower monthly payment.

You’ll end up paying more over time, since you got a car that was beyond your desired budget.

3. Revealing your trade-in too early

If you let the salesperson know at the outset that you plan to use a trade-in, there’s a good chance that he or she will take that information into account while negotiating the price. As a result, you might not be able to bring the price down as much as you’d like.

If you can get a lower price at the outset (perhaps negotiating over the phone or email first), and then bring up the trade-in, you may be able to do much better.

4. Dressing nicely

Dressing well can actually work against you when you shop for a car. While you don’t want to look as though you shouldn’t be buying a car at all, dressing too nicely, or driving up to the lot in an expensive and flashy car, can cue the salesperson that you can afford a higher price.

Show up at the end of the month, looking a little scruffy, and the salesperson might be willing to deal, since he or she needs to make the month’s quota. It’ll be all about making the car more affordable for you — based on what you are wearing.

If you can avoid those pitfalls, chances are that you can find a good bargain for your car. You’ll get the best possible price and avoid buying a more expensive car than you’d planned on.

What are your tips for buying a car?

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{ read the comments below or add one }

  • Anton Ivanov says:

    Researching the fair price of the car I wanted to buy online was one of the biggest ones for me. I showed up at the dealership knowing exactly which car I wanted, exactly which I price I wanted for it and with proof of its value with multiple printouts. Made my life much easier when negotiating the price.

  • Phil says:

    Save up the money for your next car if you can. Focus on reliable brands, especially if Consumer Reports says it is reliable. Set up RSS feeds to bring you deals from Craigslist from multiple cities, or set up RSS feeds for the same deals using autotempest.com. Feedly is my preferred RSS reader. Also, consider buying from another person, rather than a dealer. My last car, a 2000 Toyota Land Cruiser fro $6600. Local used dealer wanted $12,000 for the same car with the same miles.

  • I was just able to negotiate a new car purchase for $4K under invoice and was able to get some options added on for free. I first went online to see what others were paying for the car to get an idea of what a good deal was. From there, I reached out to a few dealerships via email telling them the car I wanted and asked for their best price. When they came back with prices. I took the lowest price and sent it out to the other dealers to beat. After a few rounds of this, I was able to get my price.

  • Meghan says:

    Bring your own financing and don’t buy from the finance guy! The back-end money is where the dealership rakes in the money. If the dealership can really get you the loan for less than you can get it yourself, fine, but know what that starting rate is. They usually pad the rate they get by 1% and put the extra in their pocket.

  • FI Pilgrim says:

    Good point about the way you dress. I work a white-collar (suit and tie) job and would have thought the opposite, that salespeople would consider me smarter. But thinking that they would consider me richer makes more sense.

  • Negotiating via email is a great way to go. We did it when we bought our last car five years ago and had two dealerships competing over the price and what they’d offer. We took that in to the third dealership, the one we really wanted to buy from, and the negotiation lasted maybe five minutes and saved us thousands of dollars. Beyond that, I could not agree more about avoiding the monthly payment discussion – they’ll just sell to that.

  • Michelle says:

    Definitely do not focus only on monthly payments. That is exactly how dealerships get you!

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