Your Guide to Buying a Car in the Internet Age



In the old days, buying a car was a finely tuned game. A buyer and salesman passed a sheet of paper back and forth, and eventually a manager appeared from a corner office. Almost every car on a lot had some wiggle room in the price, and both buyers and sellers expected the negotiation.

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Photo source: vervemgmt.com

That’s no longer how it works.

The internet has changed the car process for both buyers and sellers. Dealerships have to be aggressive with pricing online, as buyers can use clearinghouse sites like cars.com and autotrader.com to comparison shop without driving from car lot to car lot.

Some dealerships even list internet or e-prices as “no haggle” or non-negotiable, so they can list the lowest possible prices online. Buyers may no longer be able to offer thousands of dollars less for a car, but savvy shoppers can still find a great price and usually negotiate at least a modest price reduction.

Start at Home, Not at the Dealership

Smart car shopping starts at home. Clearinghouses can help a buyer determine which dealerships are currently offering the best overall pricing and which dealerships seem to be priced higher than others. For those that hate haggling over the price of a car, it’s probably best to start with the most competitively priced dealerships. Higher-priced lots may be open to more negotiations, especially if their cars are priced over standard values, but a buyer may have to do a lot more work to get the best deal.

Web-savvy dealers make this process easier by providing their car prices directly on their sites. Some, like Hgreg, even go further:

“We’re doing much of the legwork for our customers,” says Hgreg CMO Harry Kasparian. “We let them check prices by accessing Carfax and Autocheck reports directly from our site.”

See What Kelly Says

Once a buyer narrows the list of makes and models he or she is willing to buy and determines the dealerships with the best prices, it’s time to research reasonable prices. Kelley Blue Book, NADA and True Car can all help a buyer determine a fair purchase price, as well as an idea of what the dealer probably paid in trade-in or auction value for the car.

Before even visiting a dealership, it’s a good idea to know the expected price for a particular vehicle, as well as the price that would constitute a good deal. For example, let’s say KBB values a certified 2013 Buick Enclave with 50,000 miles in a range of $23,908-$27,231, with a typical asking price of $26,395. Trade-in value on the car is $20,023-$22,346, and auction prices would be typically less. So, a savvy shopper could reasonably expect to purchase the car for $26,000 or less, and a price of $25,000 or less would be a very good deal. Knowing these values before visiting a dealership can help a buyer negotiate a good price and set a top price in his or her own mind before even driving a vehicle.

Brush Up on Negotiation

CARMAX will buy used cars, even if a buyer doesn’t buy from them. Often, their cash price offers are higher than what many dealerships will offer in trade-in. Having a CARMAX offer can help in negotiating the value of your trade-in and your overall deal. In many states, a buyer will only pay sales tax on the difference in price, so keep that in mind when deciding whether to trade in your car or sell directly to CARMAX. For example, if CARMAX offers a cash price of $22,000 and a dealership only offers $21,000, selling directly to CARMAX might not be the better deal. Instead the $21,000 trade-in value may actually save over $1500 in taxes, which makes the trade-in the better deal.

Learn Your History

The internet has also changed the availability of a car’s history. Carfax and Autocheck give information about where a car has lived, wrecks, recalls and sometimes even maintenance history. These reports will also tell a buyer how long a car has been on a dealership’s lot.

In some states, a dealership is required to title a car if it has been on the lot for more than 90 days. Dealerships also often buy cars at auction on a loan, and have to pay interest on the loan. If a car stays on the lot for more than 30-60 days, it begins to eat into the profit that the dealer could make. A buyer can almost always get a better deal on a car that has been on the lot for over 30-60 days, has had a minor wreck or was a rental vehicle.

The internet has certainly changed the way a buyer negotiates with a car dealership. But, the information available online can definitely help a buyer get a great deal with just a little research and planning.

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