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10 Car Buying Tips: Save Big on Your Next Purchase

Car buying is stressful. Most car buyers are at a distinct disadvantage when buying a new car. People usually only buy a new car, at most, once or twice a decade. And you are going up against people who do this for a living. If you can get a little more information about the vehicle,…
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10 Car Buying Tips

Car buying is stressful. Most car buyers are at a distinct disadvantage when buying a new car. People usually only buy a new car, at most, once or twice a decade. And you are going up against people who do this for a living.

10 Car Buying TipsIf you can get a little more information about the vehicle, pricing and dealership tactics, then you have a better chance of getting a good deal.

Step 1: Separate Test Drives from Price Negotiations

This sounds like a simple step, but it is important. Keep your test drives and your price negotiations separate. Visit several dealerships and drive comparable models of competing vehicles to decide which one is right for you. But here is the key don’t sit down with the salesperson to discuss the price after your test drive. You are only there to gather information on which vehicle is right for you. You aren’t there to negotiate price yet. Why is this important? Because if you start negotiating on a car, you may end up buying it. Come back for negotiations when you have decided on the vehicle you want.

Step 2: Do Your Homework and Choose Your Vehicle

The internet is your best friend. You can use the web to research the type of vehicle that will best meet your needs, read consumer and expert reviews, determine rough price ranges, get a decent idea of your vehicle trade-in value and more. Chance favors the prepared mind, and a little homework can save you thousands of dollars for your efforts.

Step 3: Get Multiple Vehicle Price Quotes

With the internet, you can get access to multiple new car quotes from dozens of area dealerships, or even dealerships that aren’t in your area if you are willing to drive or have a car shipped (some dealerships will even drive the car and deliver it to you). Check out the following locations for price quotes:

Step 4: Use the Quotes for Competition

Contact several dealerships regarding quotes, then contact them again to let them know about a quote you received from another dealer. You may be able to use these quotes against each other to lower the price. You should only use this method if you are ready to buy, and you shouldn’t use this too often with the same dealership.

Step 5: Keep the Final Price Separate from Payments

Paying with cash is the best way to buy a new vehicle, but if you have to finance your purchase, be sure to negotiate the purchase price only. Dealerships love to focus on the monthly loan or lease payment. Don’t fall for that trick. It’s easy to make a payment seem low when you stretch it out over five, six or even seven years, or if you front-load or back-load the terms of the lease. Instead, focus on the bottom line. Focusing on the total vehicle purchase price is the best way to ensure you know what you are paying.

Step 6: Line Up Your Own Financing

You can almost always get a better interest rate if you line up your own financing instead of using dealer financing. Many car dealerships receive a kickback on loans they originate, and the higher the interest rate you agree to, the more money they receive. That said, it doesn’t hurt to give the dealership the opportunity to match your loan rate. If they can match the interest rate you would have received from your financial institution, you may be able to get them to give you concessions elsewhere if you finance through their lender. Remember, your goal is to get the best deal possible, and giving the dealer your lending business might be enough incentive for them to knock off a couple hundred bucks or offer free oil changes for a year or something else of value.

Step 7: Shop at the End of the Month

Most new car dealerships have quotas and sales incentives. These can vary from dealer to dealer, but most of them involve reaching a total number of sales per month. Many dealers are more willing to make a deal at the end of the month, so they can pad their numbers and possibly meet incentives. Some dealers are even willing to sell a particular model at a small loss if it means they reach an incentive that puts the difference (or more) back in their pockets.

Step 8: Negotiate the New Car Price

If you weren’t able to negotiate a price via email when you were getting multiple price quotes, then you will need to negotiate in person. Make sure you have your research with you, including multiple price quotes and other relevant information. You also want to ensure you are comparing apples to apples and not apples to oranges, so be sure to take into account any extras or options included (or not included) with your vehicle. You also want to be on the lookout for the four-square dealership technique.

The four-square technique is a way dealers try to manipulate the purchase price, trade-in value, monthly payments and down payment at one time. Dealing with all four numbers at once can quickly become confusing, which is why dealers use this tactic. Negotiate each of these items separately, and if you decide to trade in your car instead of selling it, save that negotiation for the end.

Step 9: Look Out for Additional Fees

Many dealership fees are essentially made-up fees designed to pad the price sometimes up to hundreds or even thousands of dollars above the price you negotiated. Common fees that can be negotiated and possibly even eliminated include document fees, window-etching fees, undercoating, fabric protection and many more. Also be on the lookout for other items dealers want to sell you, such as additional warranties, services or other high-ticket items. Some of these are worthwhile, while others are nothing more than high-profit generators for the dealerships.

Step 10: (Optional) Use a Buyer’s Agent

If all this sounds like too much work, then don’t worry. There are professional car buyers out there who will help you research the right car for your needs and will do all the negotiations for you based on the criteria you give them. They typically charge a couple hundred dollars for their services, but it will save you a lot of time and hassle, and potentially a lot of money. Be sure to research any buyer’s agent thoroughly before signing up for their services. Be sure to understand what services they offer, how much it will cost and other factors. And never send the purchase price of the vehicle to the buyer’s agent. That could be a red flag for a potential scam.

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About Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes,, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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  1. Adam says

    Great article Ryan. I’ve found the best way to get the lowest price is to find out what people are really paying for cars in your area rather than what the dealers tell you. You can find that information at or the message boards at have threads for that.

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