A New Car – On Our Terms

Posted on October 18, 2007 by Eric 
Filed Under Debt

Now that is some custom work! A few years back, we knew it was time to get a new car. Melissa’s car was on it’s last legs, at least in my opinion. Melissa disagrees, saying I didn’t understand the delicate workings of a supercharged muscle car. All I know is if it was raining outside, the car’s electronics would stop working. It was pretty bad.

Repairing the car was kind of out of the question. Melissa had a lot of custom work done on the car so the repair would have had to be performed by a specialty mechanic, and it was looking like it was going to be very, very pricey. Besides, it was a 2 door sports car, so we decided it was time for a new (larger) car.

Knowing what we know now, we probably would have considered a used car for a lot less money, but back then, we were looking only at new cars. We didn’t want to spend too much on a car, but we had some requirements in mind that didn’t make it cheap. We wanted a larger car, that was safer, with room enough for us to pack things in. The other car was a Honda Accord, so it didn’t have a lot of room if we decided we wanted to move some furniture. We wanted something that would last us (through potential children for instance).

We took some time and checked out cars that met our criteria. We weren’t serious yet, and just wanted to test drive. We went to one dealership and told the salespeople we were just looking, but they didn’t really want to hear that. In fact, one place, after prodding over and over again, asked us to put an offer in on the car. We were tired of them asking, so we made a lowball offer, but nothing out of the realm of possibility. The manager came over and literally told us that if we were serious we needed to “get the hell out”. We were shocked. Even though the offer was low he wasn’t willing to negotiate at all. We left, and ruled out that car (and dealership) forever.

We finally figured out what we wanted – the Honda Pilot. It had everything we were looking for and we really liked the car.

We didn’t want to spend a lot of money, and we wanted to get the best deal we could. Even though we weren’t frugal at the time, and we weren’t watching our money closely, we simply refused to get screwed on this deal. I had never negotiated on a car, but Melissa has always said “I feel like I have to get a good deal”.

We went to Kelly Blue Book and got details on how much the trade-in was worth. Then we went to Edmunds and got the details on how much we should pay for the car. We figured out our gameplan from there, and went in to get ourselves a deal we could live with.

We sat down, after taking another test drive, and Melissa opened up “the folder”. We had printed every piece of information we could find on the car. The sales guy looked at the folder and said something like “oh, you guys look like you did your homework – you do realize not everything you read on the internet is correct however”. We just smiled, and proceeded to tell him how much we would pay for the Pilot we wanted, and how much we would accpet for the trade-in. He smirked, and started with his sales routine:

Well, how much do you want to pay per month?

We weren’t prepared for this question exactly, but it didn’t phase us. In fact, hearing him say that made me realize that’s how they can really screw people over. It wasn’t something I’d thought about before then. They can make virtually any number they want through a variety of techniques – balloon payments, leasing, longer terms on the loans, any number of tricks.

Well, maybe not any number, but we didn’t want to fall into this trap. We didn’t want to pay too much per month, but we had used calculators online and figured out payments at interest rates we knew were achievable (we were also pre-approved by our bank) for the term we wanted. We knew we could always fall back on the pre-approval from the bank if they wouldn’t work with us on a decent payment plan.

I said:

We aren’t focused on what the monthly payments will be. We want to get the deal we are asking for.

After a little more back and forth on the monthly cost thing, we didn’t budge, so he went to his manager. He said they couldn’t get us as much as we wanted for the trade-in. We said that was unacceptable, pulled out the KBB information (which he said was “unreliable”) and told him it was required for him to make a sale. Again, after some back and forth, they gave in.

In the end, we got what we wanted, and it was fair to both of us, but it took us standing our ground and being fully prepared. We even got them to give us a better interest rate than our bank – by a decent amount! So we paid even less than we were planning per month!

I remember this as one of our first financial victories, especially as a couple. We were young and had never negotiated for a car. We felt like we got a good deal, and that made a big difference for us. Even 3 years later, we’re still happy with our purchase and are happy with the deal we got. It certainly changed how we thought about car buying, although next time I think we’ll buy used (with a warranty) and save up to pay in cash.

Image by merfam.

This post was written as a part of the group writing project for Get Rich Slowly.


6 Responses to “A New Car – On Our Terms”

  1. Jennifer on October 19th, 2007 10:26 am

    This is exactly how I buy cars too, and they always use the payment line. I tell them exactly what term I want, what payment I want it to be below, AND what the total loan amount will be as well as the interest rate.

    I also go in the afternoon for the test drive, say I “may” come back, and then come back in dinner time the next day. I bring my children, who will be hungry & whiny so the dealer knows that if I don’t get what I want, I have every reason to walk away at any second….then afterwards I take the kids to McDonalds. I figure its worth $6 in happy meals if I save thousands on a car.

  2. Eric on October 20th, 2007 8:53 am

    @Jennifer – That’s a great idea with the kids! I don’t have them yet, but can only imagine the effect that has on forcing them to deal. That’s funny, and probably very effective.

  3. Dena on October 21st, 2007 9:25 pm

    The last salesman who tried to sell us a car actually said, “It doesn’t matter how much it costs, just what the monthly payment is.” He was dead serious. I just looked at him and said, “Do you actually believe that?” Sadly, I think he did.

  4. Eric on October 22nd, 2007 7:45 pm

    @Dena – I can’t believe they actually tried to tell you that! It’s a little scary if he actually believed that…

  5. FourPillars on October 22nd, 2007 8:53 pm

    Great story – I negotiated pretty hard on my last vehicle purchase and I think I got a good deal but I’m still not 100% sure.


  6. Eric on October 23rd, 2007 7:14 pm

    @Mike – I know what you mean – we went in with all the information we could find, but in the end, who knows how low they would have *really* gone had we pushed even harder. You can never tell, and I think the best thing is if you were informed, and still walked away feeling you got a good, or fair, deal.


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