Want to save thousands? Want to drive a better car and be debt free? It isn’t that hard.
Recently we bought a 2003 Pontiac Montana in excellent condition. Transmission rebuilt two years ago, a $2000 job. 115k miles or 185k kms. The Blue Book value is $4000 from a private party or $5600 from a dealer. Our cost, $1900.
Here are some rules to follow when buying a car.
1. Don’t Buy a Brand New Car
Recommended by everyone from Dave Ramsey to my dad. A new car loses a huge percentage of its value when you drive it off the lot.
2. Don’t Buy From a Dealer
Dealers make their money on convenience and confidence. Think about it. The Blue Book value for any car has two numbers, private party and dealer. The difference for my van is $1600 or 40%!! The dealer will claim you are getting a similar deal to a private party, but it is obvious you are NOT. Cut out the middle man. Who wouldn’t pick 40% off over full price every time?
3. Do Your Homework and Use a Mechanic
People buy from dealers because they are afraid of problems. They want the car inspected and they want a warranty. But what has the dealer actually done and what is the warranty really worth? What they have done is cleaned the car, had a mechanic look at it and fixed things that are obviously wrong. You can do the same thing!
Check out the car yourself. Drive it, listen and look. If you aren’t a mechanic then have one inspect the car. Any mechanic will inspect a car for around $100. No legitimate seller will refuse this and you often find something that will let you negotiate the price down at least $100.
Check the car out online. In BC you can run a VIN search on ICBC website for $20 and know every accident associated with the car. I did this and knew more about our van than the seller.
4. Be Patient and Negotiate
A dealer will get you a car in a matter of hours. Finding the right car the right way might take a couple of weeks. It is worth it. Be patient. You will end up with a better car for far less money. You won’t find the perfect car, but make a list of what you want wait for one that is almost exactly right. It is easiest to decide on a make and model, a narrow range of years and price before you start looking.
Once you are looking at the car with the seller, negotiate. This isn’t as scary as it sounds. Don’t try to be super impressive or salesman-like. Be nice but firm. Don’t talk too much but ask lots of questions. Simply ask them if they will come down on the price. They usually will. Sometimes if you ask enough questions and have done your homework the seller will talk themselves down.
Tell me what you think. If you like this post take a second and share it.