How to Buy a New or Used Car from a Dealer

Last updated May 19, 2013

Buying a car doesn't have to be an unpleasant experience. The day of the sleazy salesperson is not over, but there are other types of salespeople out there. There are students paying their way through school, recent graduates supporting their new family until the job market improves, as well as people who enjoy just selling cars. The salesperson is no longer your arch nemesis.

There are new rules to follow. To begin with, women no longer need a male escort when buying a car. If it makes you feel more comfortable, then by all means bring him along, but don't do it because you feel they will give you a better deal or they will take you more seriously. Some of the toughest negotiators I dealt with were women.

Make sure you come prepared. Whether you pick up brochures ahead of time, buy a magazine or do your research on the internet, make sure you know the packages you will most likely want and the options you do not need. Don't be intimidated when you start looking around and talking to your salesperson. There really is no stupid question. If your salesperson makes you feel stupid, that's because he doesn't know the answer or is not a good salesperson. They should be your tour guide to your new vehicle. Has anyone rolled their eyes when you asked where the restroom is at a restaurant? No, then when you ask where the cupholders are or what's the difference between turbo and non-turbo, you should be given the answer in a non-pretentious manner.

The next rule: don't be prejudiced against a female salesperson. We are just as qualified as the male salesperson next to us. Also keep in mind that we can bluff just as well as our male counterparts. During my car selling days I had many customers choose me because they felt more comfortable asking all the questions they had without being made to feel inferior. This is a tactic salespeople use to gain leverage and intimidate you. If it happens to you, ask for another salesperson or go to another dealership. It will just be a waste of your time with this salesperson and a battle of wills.

After doing the footwork, test-drive your vehicles. The weather doesn't have to be nice. If it's raining or snowing, it's even better. Not many of us have the luxury of only driving in pleasant weather. Some may say "I'm not comfortable driving it," or "I'm not used to it." Trust me -- hop in the driver seat, adjust your mirrors, find a good station and buckle up, baby. The salesperson is not secretly criticizing your driving. You should see how the salespeople and porters drive these cars when they're by themselves.

Now the laundry list:

Don't let your salesperson switch you to a model you know nothing about. This is a trick I have seen used. A couple would walk into a dealership with an armful of papers they had printed off the internet. The salesperson would then devote all his energy to dissuading the couple from their researched vehicle to another model they knew nothing about.
Do not be afraid to buy today. As long as you have not had the above tactic used on you. Dealers want to get the car sold right away. This will sometimes give you more leverage if you're willing to take it right away and they might negotiate a lower deal.
Research your trade-in value. Use the Kelly blue book, but please click on trade-in value, not retail value. Dealerships don't even get retail value when they sell it. It will need the approximate mileage, options, and condition. Good and excellent are not accurate portrayals. Be honest. I have never seen a trade-in above fair. Also, do not waste money on detailing your trade-in or filling the tank. It will not increase the value.
Make sure you see the color of the car you're deciding on in the daylight and at nighttimes. Some of the colors look incredibly different at night.
This leads me to my next point. See your new car in the dealership's garage. Some sales people opt to show the new car outside in the sunlight. The glare from the wax in the sunlight hides any little scratches. The new car is not legally yours until you drive off the lot, so don't worry about pointing out unsatisfactory points even after you've signed all the contracts.
Your car should also be received with a full tank of gas whether you have purchased a new or used car.
The purpose of the ad vehicles is to get you in the door. Usually there is major body damage on the vehicle. They are not trying to sell it, its only purpose is to get you into the dealership with the low price and then switch you to another vehicle.
Salespeople get yelled at if they give you too much information over the phone. Some dealerships will even record the phone calls to make sure their salespeople are not too informative. They want you to come in and see it, touch it, and drive it.
If you're buying a used car, TAKE IT TO A MECHANIC! The time and effort will be worth it in the long run. Used car warranties can be very limited. Make sure you know exactly what you're getting so you're not surprised in the future.
Leases are good. Don't be afraid of them. Cars depreciate very quickly. If you don't put a lot of mileage on your car and you usually get one every three or four years, leasing might be a better option for you. You can also upgrade your vehicle, since you're only paying for a percentage of the car you might be able to add some options or upgrade the engine.
Normal fees include documentary fees of about $52 and license charge. Some makes also have an advertising fee itemized on the invoice. It's a legitimate fee on the invoice. We didn't make it up. Don't be afraid to ask to see an invoice. Check to make sure it's the correct invoice with the year and model and the correct options. There are two columns of itemized numbers, invoice and MSRP. The freight charge is included in that price. The dealership should not tack on an additional freight charge. It is a scam.
Before you start negotiation, look at the Monroney Label. It is the big sticker on the window with the itemized MSRP's for each option. I have known salespeople who have peeled it off the window and hid it so they can bump up the price of the vehicle before you start to negotiate.

Shown above a Monroney Label from a BMW

Here are also some finance tips:

Research your rate. Call your bank or credit union before deciding to finance at the dealership. The most money is usually made in the finance office because most think the negotiating is over.
Don't sign any blank documents. Make sure all the empty boxes are filled in. Dealerships also sell life insurance, paint shields and rust proofing. They can sneak these packages into your monthly payments and most car manufacturers already prep your cars with these shields and if you buy an aftermarket package it will negate the manufacturer's warranty.
Extended warranties are always good to consider. Whether you purchased a new or used vehicle. You have until the end of the original warranty expiration to purchase an extended warranty, but make sure you are clear on what the warranty covers. There are many different warranty companies, different deductibles and different lengths of coverage.
Lastly, negotiate well, but don't cheat your salesperson. The dealership gets a kickback for every car they sell, but your salesperson doesn't. Most sales people work on commission and are there for you. They should explain the controls, remotes and features your car has before you buy your vehicle and then make sure you are familiar with all the controls after you have purchased it. It is called the delivery. They give you your manual which is also sometimes on a video or DVD. Most new cars also have 2 master keys and a valet key. Some of these have an anti-theft device in them and can be costly to replace. A good salesperson will also let you know your next scheduled service. Your salesperson can be very valuable and that is why it is important to choose a knowledgeable person who makes you feel comfortable and not to over-negotiate. They live off that commission and most dealerships will only paid $50 if that, if the car is sold at invoice.

I hope this will help make your next car buying experience more pleasant. It is not hard to avoid these types of salespeople and tricks as long as you remember to come prepared and be pleasant to the remaining helpful salespeople out there.

Written by Rebecca Johnson