Monday, January 23, 2023

It’s Time to Begin The Car-Buying Process

Please note that my headline doesn’t read that “It’s time to buy a car”; It’s time to begin the process. All indicators are that the microchip shortage and other supply line issues over the last three years are past. Auto production is geared and gearing up to where we were before the pandemic. Dealers’ inventories are growing, and prices are coming down. Dealers’ bad behavior is even beginning to mitigate. This resulted from the price gouging and deceitful advertising and sales practices during the past 3 years that brought on aggressive retaliation by the Federal Trade Commission and some local regulators.
 
The car buying process will take some time, weeks, at least. Time is on your side because car prices will continue to come down for months, even up to a year. Inflation is coming down, interest rates are not going much higher, and soon increasing supply will more than catch up with demand. Here are the “bases that you should touch” before you sign on the dotted line: 

  • Study Consumer Reports online or magazine. You don’t even have to join or subscribe. Your local library provides both hard copies and online Consumer Reports. Be sure you check the annual auto issue, and most issues carry reports on all cars, new and used. CR evaluates cars from every angle…safety, reliability, cost of maintenance and repairs, fuel economy, handling, comfort, and price. CR is the only totally trustworthy source of information on cars. Unlike every other car information source, like Edmunds, Kelly Blue Book, Cars.com, J.D. Power, CarFax, Motor Trend, car and Driver, etc., Consumer Reports has NO FINANCIAL AFFILIATION with car dealers or manufacturers. CR accepts no money from anyone except consumers’ donations. When they test a car, they pay full price from a car dealership. 
  • Shop online, not at dealerships, after you’ve made your choice. When you enter a dealership, the salesman and sales manager are in control. You’re playing on their home field. Salespeople and managers are trained on taking control of the negotiation. They attend classes on sales techniques that work best when they’re face to face with the customer. You can insulate yourself from car salespeople by using a different email address than you normal one. You can also not give them your real phone number. 
  • Select the dealership that gives you the best OUT-THE-DOOR price. The true definition of an out-the-door price is one with only the government fees of sales tax and tag added.
  • Shop your trade in with, at least, three different sources such as CarMax, Carvanna, WeBuyAnyCar.com, Vroom, and dealers that sell the brand of your trade in. Don’t accept only the trade-in allowance offered by the dealer you buy from. 
  • Arrange your financing in advance with your bank or credit union. Credit Unions have much lower interest rates than banks. If you’re not a member of a credit union, it’s worth the small annual fee to join.

  • Ignore after sale products offered by the dealer. If you buy a good car, you don’t need an extended maintenance plan. Road Hazzard insurance, emergency brake down insurance, etc. are typically overpriced and can be purchased elsewhere, like AAA, for much less.

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