As promised, I am going to walk you through how to buy a car online. The days of walking into a dealership, playing the "I'm just looking" game, and waiting for 15 minutes while the salesman "talks to his manager" are over. Buying a car online can save you a lot of money, if you know how.
Car salesmen that work on the lot get paid primarily on commission. The more they can "upsell" you, the more money they take home. Internet salesmen get paid by volume. Their goal is to move as many cars as possible. To anyone that is skeptical, the truth is that some dealerships may even take a loss on one car, if it means hitting one of their "quotas" or "goals", because they get what is called "holdback" from the manufacturer. Some car companies have different systems, like offering 1/2% or 1% per car sold, while others pay $250 or $500 per car sold. If they had a sales quota of 25 and a sales goal of 50, hitting the quota would net the dealership the 1/2% or $250 per car sold, while selling 50 would get them 1% or $500 per car sold.
Now, the first and most crucial step is the preparation. You have to know
exactly what you are looking for. Know the different trim levels, the different add-ons, and the invoice price of your car. I spent a few hours browsing the edmunds.com forums, where they have discussions specifically for prices paid and buying experiences. Their True Market Value tool is pretty useful also. You may find other forums more helpful, depending on what car you are looking for.
Also, know how you are going to pay for it, if you're financing it, and what the interest rates are. If you have one, know the value of your trade-in as well. Be aware that they will lowball you on the trade-in if you pinch them on the price of the car. I would really recommend attempting to sell your car yourself, or using Carmax. Use the TMV thing on edmunds and a payment calculator to find out how much your payments will be and for how long. (Note: At the dealership, interest rates are also negotiable! If you prepare a loan through the bank in advance, sometimes you can get the dealership to beat their interest rate.) It would also be helpful to find out your credit score so that you will know if you qualify for a loan or if you need a cosigner for a better rate.
Once you've done the above, you've finished half the battle. Go to the manufacturer's website, and from there, write down all of the dealerships within a 25 or 50 mile radius, depending on how far you're willing to drive. In Socal, there are a LOT of dealerships, and I found that the easiest way to keep track of stuff was to grab an old notebook and list the dealerships I was planning to email. Leave some space to take notes. Now, prepare your email. Here's an example of the one I used. Feel free to use it and alter it for your own purposes.
"Hi, my name is Frank,
I would like a price quote on a 2008 Honda Accord Coupe, EX Automatic in the Nighthawk Black Pearl
(Be EXTREMELY specific on what you are looking for) color, if you have one available. Are there any promotions or incentives
(Even though you already researched it and found out for yourself) on the car? Also, what financing promotions are available? I look forward to hearing from you. Thank you for your time.
After all of this, it's game time. Set aside a day or two to do this, because it can be a long and tedious process. Get on the manufacturer's website and punch in the required info. (I had to use different ZIP codes to get certain dealerships on Honda's website, and by doing this I found a dealership that beat all the others by $1000!) Cut and paste your email, and let them know from the get-go that you do or do not want any add-ons (i.e. window tint, custom rims, spoilers, lojack, etc.) Start going down the list, checking off each dealership as you go.
Have your phone next to you, because some dealerships will call you, even if you ask to correspond only through email. On your notepad write down every dealership's price, and cross off the ones that don't have your car and/or won't send you a quote. Some just ask you to make an appointment for a test drive. Cross them off too. Once you've weeded out the jokers, use your lowest price quote and start emailing or calling the other dealerships to see if they will beat the price. If they won't, try to get them to match it.
Once you've played the game and made your decision, let the dealership you choose know that you will be ready to buy once you have an email that breaks down the price of the car with tax and everything. Make sure it is specific, and keep your eye out for any shady wording (I had a certain dealership that came in way below all the others. Only two of the 30 or so dealerships I emailed would even match the price, and some of the people on the phone even laughed at me. This particular dealership told me that the car I had specified was available. However, they wouldn't send me the email with everything broken down after I asked them three times. I drove an hour to the dealership only to find out that the exact car I wanted was
available, just not from them, or anyone they could trade with. -_- This is why you should ask the others to at least match the quote. The moral of the story is to be ready for typical dealership shenanigans, and don't put up with it.)
When it is time to head to the dealership, print your emails, and call in advance to make sure that they still actually have the car on the lot. Again, be extremely specific, and make sure it has the add-ons (or lack thereof).
From here, with all the details worked out, it should be smooth-sailing. After following these steps I was in and out of the dealership in 90 minutes. Just remember the basics, like test-driving your car and inspecting it. They will try to sell you add-ons once you are there, so just be ready. I told them I would come in the next day because I had to be at work that night, and the lady promised the deal would be quick. I think this is what kept the upselling to a minimum.
Let us know if you have any questions or any other tips.
Good luck!
-Frank
