November 07, 2006

Car-buying Part 2: The Research

The first step of my research was to consult Consumer Reports, so I paid my $26 annual subscription fee, and went to work. I found the information to be very helpful and was amazed at how accurate it was. For example, the Honda Civic is one of Consumer Reports highest ranked cars. The only thing that was rated "poor" on the Civic was the exhaust systems for '97s, '98s, and '99s. I just happen to have a '99, and I had to replace my exhaust system a few years ago. And that's the only problem I've ever really had. The new car I was looking at was a Consumer Reports "recommended" car and after reading their rankings and road test results, I was more than satisfied.

The next step was - and this is where I found the mother load of car-buying advice. If anyone reading this is considering buying a car, I highly recommend that you read the series of articles on called "Confessions of a Car Salesman" - this dude went "undercover" for Edmunds and became a car salesman and the information he provides in this series of articles is extremely valuable and sometimes almost unbelievable. One of the things I learned about in these articles was that car dealerships now have "Internet Sales Managers" (I realize this may be old news to some of you, but I haven't bought a car since 1999) - and your typical floor salesman does not like it when someone enters the dealership and asks for the "fleet manager" or "Internal sales manager" because typically that means that the customer has done all of their Internet research. Which leads me to step 3...

Step 3 was using "Free Price Quote" tool. Using this tool, I just entered in the make and model of the car and my zip code, then all of the local dealerships that sell the car I was looking for popped up. Then I just entered some info (like my e-mail address) and choose which dealers I wanted to send my "price quote" to, and hit "submit". Within hours, all of the dealers I had chosen starting sending me their price quotes via e-mail. And I couldn't believe it...their initial quotes were $1,000 less than the sticker price at the dealership. While the price quotes were coming in, I used Edmunds to get a "True Market Value" (TMV) report. This report lists the MSRP price of the car (including any add-ons you may want) and the destination fee. The TMV also lists the invoice price for the car (and any add-ons) so that you have an idea about what the dealer paid.

Step 4 - I started e-mailing the Internet Sales managers back. In their initial e-mails, they all said "have you driven the car yet?" and "we should set up an appointment for you to come in and drive the car and talk" - they were trying to lure me to the dealership, which is exactly what I didn't want to do since I realized that I was actually feeling like I was the one in control. So in my responses, I started dropping names - e.g. "I know you said you were giving me the best price in the state, but dealer X offered me this much lower, and dealer Y offered me the same price plus a bonus package." One dealership started getting whiny about what the other dealership was offering, and the others kept trying to sweeten the deal....and this was all via e-mail. I had everything in writing. It was awesome. And I was actually having fun.

The 5th step would turn out to be the key step in my research process - I phoned a friend. I called a friend/car saleswoman and I talked to her about the offers I was getting and she told me exactly what to do. Long story short, I offered to buy the car from one dealership for $200 less than invoice (plus some discounts on my add-ons), and much to my surprise, they accepted my offer. In the end, I got the car and add-ons for about $2,000 less than the sticker price. I was satisfied.

Still to come...Financing with Mr. Slippery and Lessons Learned.


Angie Vasquez said...

Whoa..."Confessions of a Car Salesman", what a long, but very enlightening article. So, out of curiosity, I requested an Internet quote and had to laugh at the first response I got:

"To let you know we have a few of the rare automatic 3's to choose from. If you have been shopping for them in an automatic I am sure you have found out they are almost impossible to get."

Looks like this guy was trained in the same class as the writer for the article.


Strats said...

yeah, that series of articles is spot-on when it comes to the things that car salespeople will say (or write).

Angie Vasquez said...

Not surprisingly, he has yet to respond to my e-mail saying that I would rather converse via e-mail (he suggested I call him) and am not interested in all the “extra” service coupons that they can offer and simply want a quote. I can see how car shopping might actually be enjoyable when you know all the dirty tricks of the trade.