How To Buy a New Car in 5 Days
I was told it couldn’t be done, but I proved the naysayers wrong—in the span of five days, I went from having a dead car to a new car at a great price and a great interest rate. Here’s how it went down.
My ’96 Saturn SL2 finally called it quits. The Saturn was my fourth car, after a ’93 Dodge Shadow, a ’91 Ford Taurus, and a ’96 Ford Taurus. Those three were hand-me-downs from my mother, and the Saturn was a hand-me-down from my fiancé.
In other words: I’ve had no real experience in buying a car from someone. But, with no hand-me-downs in sight this time, I knew I was going to have to learn real fast.
Fortunately, I have had people recommend things to me in the past when it comes to car shopping. The main site to check out is Edmunds.com, which hosts plenty of reviews and pricing information. But the most helpful feature I found on there was their auto loan calculator, particularly the “How Much Can I Afford?” calculator. Because I run all my finances on a budget, I knew about how much I was willing to spend per month and how much I could afford as a down payment. I also knew that because I’ve been carefully building my credit for the past three years, I could get a great interest rate on the loan, too. Popped in all that information, and voilà, there was the price range I could purchase a car for. (I will say now that this turned out to be very accurate in the end.)
Another great source was DealerRater.com. Go to their directory, choose your state, and start narrowing down by car make. (I already knew, after doing research in the past, that I wanted to buy an Asian car. So, that narrowed down the dealer searching a great deal.)
Once I found a couple of worthwhile dealerships, I went to their sites and checked out their inventory. This gave me a very good idea of the quality and the price range of each place, all without having to physically gets up and look at a whole bunch of cars at this point. Most dealership sites will list all the vitals and then some about each car, as well as a free Carfax report of each car. I highly, highly recommend doing this, because I know that even having done this, I still got overwhelmed looking at all the cars in person at the dealerships. The more research you can do before going near a car, the better.
Okay, I narrowed down what dealerships I wanted to visit and what cars I wanted to look at. I have a good price range in mind. So, now I need to think about financing. As I was researching about financing, one thing I kept reading over and over again was “don’t finance through the dealership.”
There was a caveat to that, though. That sentence should fully read “don’t finance through the dealership… unless you have an interest rate to bring to the table and they better that offer.” In other words, shop around different banks and ask to be pre-approved for a loan. If they don’t have that, find out what interest rates they typically offer, and then apply to the bank(s) that offers the best possible option. You’ll be informed that you were or were not approved anywhere from the same day to a few days later.
The reason to do this is so that you create competition with the car dealership’s financing department. If you just go in with nothing, they could very likely tell you that the interest rate on your financing will be 15%, here’s your car, and have a good day. However, if you go in and say, “My credit union gave me a 60 month loan at 5%,” well, they know they can’t pull a fast one on you. If they can’t do better, you’ve secured a loan to purchase your car at an affordable rate. If they can do better, then you just saved yourself even more money. It’s win-win.
I unfortunately wasn’t able to do this till Day 4, because my transportation (i.e., my fiancé) was in work till midnight, so I had to do the initial financing research over the web. That was better than nothing, though. I do wish I had done it all on Day 2, as the process would’ve been a little smoother.
I had a foundation thanks to my research, so now I went ahead and visited the dealerships. I went to four, although I left the second one pretty quickly as I didn’t see anything nice that was in my price range. I hunted down any car that met my criteria of 1) in my price range, 2) Asian, 3) less than 50,000 miles, 4) sedan, and 5) automatic transmission.
My fiancé and I made sure to make this day feel as relaxed as possible. We started with breakfast at Perkins. Then we stopped at two dealerships. After that, we took a lunch break and split a soda and fries at Wendy’s. Then we went to the final two dealerships. It wound up being an 8 hour day. My head was swimming by the end, and I know it would’ve been worse if we didn’t force the day to slow down.
I let my fiancé do nearly all the talking as that’s what he does best (he’s the schmoozer, I’m the money person). We test drove a couple of vehicles at each dealership and looked carefully over each vehicle. In the beginning, it was easy to get wowwed by each car. However, after a couple more cars, I started to realize that the things that seemed so cool to me are actually standard nowadays. Wow, welcome to the 2000s! Once I cleared my head, it was easier to look at the cars more critically. How does the acceleration feel? How does my body fit in the seat? Anything sound/look/feel weird?
Once we were done, we let each dealer know that we weren’t purchasing that day, said our thank yous, wrote down the year, make, and model of each car, and went on our merry way.
Decisions, decisions. I narrowed down the cars I liked the most to three choices. Then I went to each dealership’s website and printed out the page and Carfax for each car so I could carefully think about my options.
This is when to get rid of any of the warm fuzzy feelings and to think practically. This is my budget, this is what I need, this is what meets those needs. There were a couple of nice cars that had to be cut from the list because, no matter how nice they were, they just weren’t in my budget. I don’t really need heated seats, no matter how awesome they are.
Once I made the choice, I had my fiancé the schmoozer make the phone call and let the dealer know my choice.
This day is also when I wound up shopping around for an auto loan. It’s doable on Day 4, but I really recommend sooner than later. The one upside of doing it on Day 4, though, was that I knew how much money to request since I had finally settled on which car I wanted.
My mind is made up, I have a good car loan set up already, now I just have to go to the dealership and sign my life away.
This day goes by a lot easier if you possess a few things: 1) an appointment with the dealer, 2) good credit, and 3) the ability to say ‘no’ under pressure.
Since we had an appointment, we were able to start signing all the legal stuff right away. We also took a look at the car again to make sure nothing with it changed since we last saw it. (Oh, the last test driver ran into a mailbox? Oops.)
Once all that was done, we went into the office of the finance guy. He gave me an interest rate one whole percentage under the best deal I was given. (Therefore, the fact that I didn’t really have all of that stuff properly set up in time with my bank was moot. Bargaining accomplished.)
Then comes out the “extended warranty” stuff. This is tricky, because the general attitude towards them is negative. The first offer we were shown was definitely not worth it—I would have been paying for 5 years for a warranty that would cover me for at best 1.5 years. Once we said no, then the finance guy started looking through a database for offers not directly through the dealership. He found us something that would cover any road hazard repairs for up to about 50,000 miles on the car—which would be when the car is at almost 100,000 miles total. That made more sense, so we decided, knowing my luck with cars, to go for that deal.
We were in and out of the dealership in about an hour.
I’m really happy with this purchase. Everything worked out as I had hoped it would. I know people who have spent weeks or months shopping for a car. I know people who spent all day inside the dealership purchasing their car because they weren’t prepared or they had poor credit. I know people who were taken for a ride (oh ho, bad pun) with the dealership’s financing and had to refinance elsewhere. It can all be a miserable experience, but it doesn’t have to be.
I will say that the one bad thing I experienced in all this is that I don’t think I’ll be inclined to work with my workplace’s credit union again for a loan. The loan officer treated me pretty condescendingly, which I would presume is because I’m so young looking. (I mean, to actually guffaw and shoot me dirty looks at some of the questions I had while filling out the loan application? Really?) It makes me wonder how I would have been treated at the dealerships and other banks if I had been without my fiancé, who is 13.5 years older than me. Or was it just that this particular woman was a jerk?
Either way, that was the only bad experience I had during this process. I’d advise other young females going solo to be on guard for that type of behavior.
Originally posted 2012-04-03 22:54:08. Republished by Blog Post Promoter