Tuesday, December 25, 2018

Tips For Buying a New Car

I recently bought a new car and wanted to share my experiences. Cars and dealers' names have been disguised.

Episode 1. I am out with a friend and tell him I'm in the market for a new car. He says, "Let's go look." So after lunch we go to an Abco dealer nearby. We are greeted by salesman whose "up" it is and he asks us what we want. I say, "I'm interested in a 2019 Abco with a trim level of XX." He says, here's a 2018 Abco with that trim level. It's the same as the 2019." He acts as if he can't locate a 2019 to test drive, so we test the 2018. Afterwards, we sit down and he comes to us with a sales proposal for the 2018, the car I don't want and didn't ask for. The proposal offers a $500 discount from MSRP (this is December 2018, the very end of the model year), with a $1,500 alarm system and a $2,800 extended warranty added on, neither of which I asked for. We get up to leave and the "sales manager" suddenly appears, offering us an extra $1,000 off the price. We decline and leave. Unless you want to wrangle with a salesman, his manager, the credit manager, and one or two others, for eight hours, listening to them tell you they will be losing money on the deal and cannot possibly go lower--until they do--then skip the walk-in route.

Episode 2. Next, my friend and I stop by a Beco dealer (the other brand of car I'm interested in), and a young salesman goes over everything and lets us go on an extended test drive. I'm am sold on the car, but we tell the salesman we will think it over. He doesn't pressure us, and we leave.

Episode 3. I decide to do the intelligent thing and use the Internet to shop. My first stop is the Web site of  the Beco manufacturer. This is crucial. Find exactly the car, exterior color, interior color, trim level, and any additional options you want. Print the features list for the car you have chosen.  Prices can vary by color and by popularity. Next, find some reviews of the car you are thinking about buying and see what they say.

With this information, I go to KBB.com, the site run by Kelley Blue Book, and look up the MSRP (Manufacturer's Suggested Retail Price, also known as the Sticker Price or the List Price), together with the Invoice price. The Invoice price is supposedly the dealer's cost, but there are so many adjustments to it (advertising fee, factory incentives, factory holdback, dealer discounts per volume of cars sold, etc.) that it's best just to call it the Invoice price. Anyway, KBB.com also shows me a "Fair Market Value" for the car. Most people don't expect much of a discount on a brand-new model year car (when the inventory of last year's models still needs to be cleared out), and KBB reflects that for the Beco model I have chosen, showing an expected price just a few hundred dollars below sticker. That actually is almost remarkable, since some dealers pack their cars with prices above MSRP. You might see a label next to the sticker that lists various items such as pinstriping, undercoating, paint protectant, Scotchguard seat protectant, alarm system, and ADMU ("Additional Dealer Mark Up"). At the minimum, get the MSRP, Invoice, and Fair Market Value for the car you want and bring it with you to the dealer. If the dealer has a price posted higher than MSRP, I suggest you shop somewhere else.

Episode 4. I'm hoping for a better price, so next I go to Edmunds.com and check out the information there. Searching is easy with my list: I want a Beco Dazzle SX in green, with a gray interior. Edmunds shows me the costs. But it also has a feature that will connect a  shopper with dealers in the area who will quote a price. I pick out three or four dealers. In only minutes, I get what seems to be an automated quote from one dealer offering $1,000 off MSRP. I am stunned. But then I get emails from the Internet managers of three dealers, one offering $2,000 below MSRP and the other two offering $2,800 below MSRP, each one showing the VIN number of a specific car. That is more than $1,500 below invoice. (I begin to suspect that the dealer gets a piece of the $995 "Delivery, Processing, and Handling Fee." Some dealers used to pack  their prices by adding a "Dealer Preparation Fee.") I email the dealer with the best offer and say I'm in. For the best deal, get an offer from three or four Internet managers. Skip the walk-in process.

Episode 5. I plan to get to the dealer at 2:00 pm, but things delay me until 4:30. The Internet manager I got the quote from is off that day and the other Internet manager is busy, so I am turned over to a new, young salesman, who briefs me on the car. We test drive it and it is just great. I tell him I understand that the navigation chip is put in only at the time of delivery because it is easy to steal. (The first Beco sales rep at the other dealership had told us this.) The salesman says that the chip is an option available for "a couple of hundred dollars." I show him the features list I had printed out, saying that navigation is included with the SX trim level. He says he will have to ask his sales manager. When he returns, he says that navigation is an extra $400. I use my cell phone to get on the Beco Web site and find the features list for the Dazzle SX. Navigation is listed. The salesman is still skeptical, and says he again needs to talk to his manager. I walk out the door to the car and shine my flashlight on the window sticker, which  shows "Beco Navigation" as included. Another salesman agrees. Print off the exact features list for the trim level you want and are pricing and take it to the dealer. Compare it with the list of features on the window sticker.

Episode 6. While the new salesman knew I was there supposedly to work with an Internet manager, I was told that he would explain things until the manager was available. When the Internet manager remained busy, the new salesman drew up an offer of MSRP for the car. I handed him the email from the Internet manager (whose day off it was, so he couldn't verify my word if I didn't have the printed documentation). He was surprised, went to his manager, and said it was okay. He gave me paperwork to fill out. Meanwhile, a man sits down with the Dazzle owner's manual, perhaps 600 or 700 pages thick, and he says, "Just as soon as you're done with the credit manager, I will explain everything in this manual to you." Next thing I know he is gone and I never see him again. (Things  had dragged on so long that it was nearly closing time, so he probably went home.) Don't go the dealership after noon on any day if you are planning on buying the car, even if you have a fistful of $100 bills. For whatever reason, and I suspect it might be just to wear the customers out and wear down their resistance, even the simplest deal takes hours, most of them spent waiting for someone to be able to talk to you.

Episode 7. The new salesman returns, and he informs me that they need additional identification to approve me for the purchase. He asks if I have any second photo ID (in addition to my state driver's license). I don't, of course. So he tells me that I have put a security hold on my credit report and that they need to ask some questions to verify my identity. Two of the questions ask about student loans, which I've never had, and the other two ask about the price I paid for my house, and something else I've forgotten. The new salesman takes the answers back to his boss and then quickly returns, informing me that I got two of the four answers wrong, making me a red alert for suspected fraud or something. We think things over and  have just about decided that he will follow me home and verify that I have a current passport, which will be the second form of ID they need. Then another salesman, who can think better than we have, says, "Why don't you have your wife take a picture of the passport photo page with her cell phone and send it to us?" That works and we are good to go. Take at least two forms of picture ID and the names, addresses, and phone numbers of three or four "people you know who are not related and not living with you."

Episode 8. While we are waiting for the credit manager, the new salesman shows me a binder with maybe twenty or thirty items to pack onto the car's price: seal coating, prepaid oil changes, lojack anti-theft, glass tinting, and on and on. I decline them all. You can make up your own mind about these high-profit add ons. I skip them all.

Episode 9. Finally, we get the new car signed and paid for.The visit to the credit manager is a non-starter, because I decline all the extras and have proof of current insurance. Be sure you have your current insurance paperwork with you, not last year's or last term's.

Episode 10. I drive home at night, in an unfamiliar car. The windshield begins to fog up and I can't see the defog setting while I'm watching for heavy city traffic. I end up rolling down a window. It's cold outside. I don't know how to use the INCLUDED navigation system. By God's grace, I get home safely. The next day I log onto my insurance company's Web site and update my policy (ouch). I also add the car to my toll road transponder account. And I begin to read the manual. All's well that ends well. P.S. Pairing your garage door opener with the car is not in the index under G. It's under H for HomeLink.