The car I'm driving - I bought it
July 6, 2015 7:57 AM Subscribe
What do I need to know as a first-time car buyer?
I'm planning on buying a used car from a dealer in Atlanta. I know what kind of car I want (a Prius or a Fit). I know what I should be paying for it (thanks, Consumer Reports!). I have no idea how this purchase goes down, logistically, and am sure I'm missing something.
So, my understanding is I find some cars I like on TrueCar, call the dealerships, make appointments to see specific people (so, like, get a name) and confirm they have the car on the lot. I go to the dealership, I test drive, and then I think about if I want it. We discuss price. I leave and go see other cars that day. By the end of the day, I have an idea of which car I want, and can compare financing offers. The next day or so, I go pay the deposit (by check?) and get a car.
- What am I missing?
- What happens with registration and license plates?
- How do I get car insurance? Do I need to get that before I buy?
- Is the timeframe (2-3 days) to purchase this car reasonable? I'm not picky about much.
- Do I for sure need to get the car inspected by an independent mechanic? What if it's certified pre-owned by the car company?
- Is it cool to walk away for a day?
- I am a late 20s woman who has never owned a car. I am an easy mark. I have no one who can come with me to make me look like I know what I'm doing. What do I need to watch out for?
- Do I pay the deposit by regular check?
- Can they do all the financing offer information at the dealership on the same day?
- My driver's license will be out-of-state. Do I need to get an in-state license before I buy?
Merci en avance.
I'm planning on buying a used car from a dealer in Atlanta. I know what kind of car I want (a Prius or a Fit). I know what I should be paying for it (thanks, Consumer Reports!). I have no idea how this purchase goes down, logistically, and am sure I'm missing something.
So, my understanding is I find some cars I like on TrueCar, call the dealerships, make appointments to see specific people (so, like, get a name) and confirm they have the car on the lot. I go to the dealership, I test drive, and then I think about if I want it. We discuss price. I leave and go see other cars that day. By the end of the day, I have an idea of which car I want, and can compare financing offers. The next day or so, I go pay the deposit (by check?) and get a car.
- What am I missing?
- What happens with registration and license plates?
- How do I get car insurance? Do I need to get that before I buy?
- Is the timeframe (2-3 days) to purchase this car reasonable? I'm not picky about much.
- Do I for sure need to get the car inspected by an independent mechanic? What if it's certified pre-owned by the car company?
- Is it cool to walk away for a day?
- I am a late 20s woman who has never owned a car. I am an easy mark. I have no one who can come with me to make me look like I know what I'm doing. What do I need to watch out for?
- Do I pay the deposit by regular check?
- Can they do all the financing offer information at the dealership on the same day?
- My driver's license will be out-of-state. Do I need to get an in-state license before I buy?
Merci en avance.
Oh, and if you can afford it, get "gap" insurance. If you don't have it, and on the way home from the dealership (or anytime soon after purchasing) somebody rear ends you and totals your car, the most the insurance company will give you is the "blue book" value of the car, which WILL be less than what you still owe on the car. Gap insurance will make up the difference so you won't be stuck paying the finance company the difference. (Yes, this happened to me - totalled vehicle, and I had to pay $800 to cover the difference between what insurance paid and what I owed)
posted by Mr. Big Business at 8:35 AM on July 6, 2015
posted by Mr. Big Business at 8:35 AM on July 6, 2015
You can arrange insurance with the insurance company the day you pick up the car, and it will be valid the instant the phone call is over.
The car dealers will attempt to make money on the financing by charging you a higher rate on the loan. Get some rates from your bank or credit union before agreeing to anything from the dealer.
posted by deanc at 8:39 AM on July 6, 2015 [1 favorite]
The car dealers will attempt to make money on the financing by charging you a higher rate on the loan. Get some rates from your bank or credit union before agreeing to anything from the dealer.
posted by deanc at 8:39 AM on July 6, 2015 [1 favorite]
- The person who is willing to walk away from the deal has the upper hand. Always remember that.
- When I bought my current car, I already had car insurance on my previous car. I called my insurer at the dealership and had the new car added. This was helpful because the salesman was able to answer a couple of questions that I was unsure of.
- If you get dealer financing, beware of a sort of bait-and-switch where they sell you the car with financing at N%, and then call you a few days later explaining there was a "problem" with the financing and you need to come in and refinance it (at a higher rate of course). This is a scam. It's better if you can arrange financing independently before going to the dealer.
- Yes, you can write a regular check for the downpayment. It's not a deposit.
posted by adamrice at 8:50 AM on July 6, 2015 [1 favorite]
Note that Truecar is not useful if you are seeking the best price. It's a helpful aggregator to get you a general idea of what people are paying compared to MSRP, but that figure isn't all that useful to start with since a useful indicator would be what people are paying compared to invoice.
The truecar "certified dealer" is a service that car dealers subscribe to in order to generate leads; as part of their agreement, they agree to honor a prenegotiated price to make the purchase of the vehicle less of a hassle in terms of it sparing you having to do the negotiation. That does not mean you're getting the best price, but if you're okay with that, then it may be a good resource to use. However, don't hesitate to contact dealers who are not certified, who may be able to offer a better price than the certified price.
Note that truecar will also fire off all your contact info to dealers in your area who will immediately bombard you with emails and phone calls, so you may want to use a throwaway email if you don't want to be solicited.
posted by Karaage at 8:57 AM on July 6, 2015
The truecar "certified dealer" is a service that car dealers subscribe to in order to generate leads; as part of their agreement, they agree to honor a prenegotiated price to make the purchase of the vehicle less of a hassle in terms of it sparing you having to do the negotiation. That does not mean you're getting the best price, but if you're okay with that, then it may be a good resource to use. However, don't hesitate to contact dealers who are not certified, who may be able to offer a better price than the certified price.
Note that truecar will also fire off all your contact info to dealers in your area who will immediately bombard you with emails and phone calls, so you may want to use a throwaway email if you don't want to be solicited.
posted by Karaage at 8:57 AM on July 6, 2015
Most dealers will charge a pretty hefty fee if you finance through them 500-1000usd (they will not generally mention this aloud).
If you finance through your bank or an online service like capital one you'll be essentially making a cash payment which gives you a lot more room to not get screwed over. This was you aren't in a position where you have to spend a LOT of time at the dealers only to be offered a bad number, this method is used against you to get you to give up money in exchange not having to go through this time again elsewhere.
It won't all happen in one day but it can save you a lot of money.
posted by French Fry at 9:02 AM on July 6, 2015
If you finance through your bank or an online service like capital one you'll be essentially making a cash payment which gives you a lot more room to not get screwed over. This was you aren't in a position where you have to spend a LOT of time at the dealers only to be offered a bad number, this method is used against you to get you to give up money in exchange not having to go through this time again elsewhere.
It won't all happen in one day but it can save you a lot of money.
posted by French Fry at 9:02 AM on July 6, 2015
If you've never owned a car before, I recommend buying a cheap one you can pay for already rather than getting into any kind of financing deal. But if you must finance it, you need to know that dealer finance is almost always considerably more expensive than what you'll get from your credit union, and that dealers will go to great lengths to make this appear to be untrue.
Small Japanese cars are generally very reliable. Rust and bent bodywork are the only instant dealbreakers for cars up to about three thousand dollars; fixing almost anything else will likely cost less than another two thou. Or possibly not, if it's a hybrid: come up with some semi-reasonable estimate of what fuel is likely to cost you over the next hundred thousand miles, to figure out how much more it's worth your while to pay for lower consumption, and talk to as many Prius owners as you can find to get some idea of what kind of life you can expect out of the main traction battery (which will cost a lot to replace).
Extended warranties on used cars are usually not actually offered by the dealer, who will generally be selling you a warranty on behalf of some third-party warranty outfit. They're expensive to buy (exactly how expensive is something the dealer will do their best to distract you from) and they're a pain in the arse to claim on. Getting the car checked over by an independent mechanic will cost you less; you should only ever buy a car whose mechanical soundness you've good reason to be confident in, and any such car is unlikely to make an extended warranty a win for you.
Not only is it cool to walk away for a day, it's something you should definitely do: it will give you time to arrange your credit union car loan, if nothing else. Worst that can possibly happen is that a car you had your eye on gets sold to somebody else. Practising the non-detachment necessary to avoid being upset by that will help you avoid being ripped off.
Once you have your new-to-you car, become absolutely religious about checking its fluid levels (oil, transmission fluid, brake and clutch fluid, coolant) every time you fuel it up. This habit can save you some tremendously high and easily avoidable repair costs.
Expect to replace the starter battery within the first year, unless the dealer has fitted a brand spanking new one.
posted by flabdablet at 9:07 AM on July 6, 2015 [1 favorite]
Small Japanese cars are generally very reliable. Rust and bent bodywork are the only instant dealbreakers for cars up to about three thousand dollars; fixing almost anything else will likely cost less than another two thou. Or possibly not, if it's a hybrid: come up with some semi-reasonable estimate of what fuel is likely to cost you over the next hundred thousand miles, to figure out how much more it's worth your while to pay for lower consumption, and talk to as many Prius owners as you can find to get some idea of what kind of life you can expect out of the main traction battery (which will cost a lot to replace).
Extended warranties on used cars are usually not actually offered by the dealer, who will generally be selling you a warranty on behalf of some third-party warranty outfit. They're expensive to buy (exactly how expensive is something the dealer will do their best to distract you from) and they're a pain in the arse to claim on. Getting the car checked over by an independent mechanic will cost you less; you should only ever buy a car whose mechanical soundness you've good reason to be confident in, and any such car is unlikely to make an extended warranty a win for you.
Not only is it cool to walk away for a day, it's something you should definitely do: it will give you time to arrange your credit union car loan, if nothing else. Worst that can possibly happen is that a car you had your eye on gets sold to somebody else. Practising the non-detachment necessary to avoid being upset by that will help you avoid being ripped off.
Once you have your new-to-you car, become absolutely religious about checking its fluid levels (oil, transmission fluid, brake and clutch fluid, coolant) every time you fuel it up. This habit can save you some tremendously high and easily avoidable repair costs.
Expect to replace the starter battery within the first year, unless the dealer has fitted a brand spanking new one.
posted by flabdablet at 9:07 AM on July 6, 2015 [1 favorite]
In some jurisdictions, you need to have VIN-specific insurance information in place to have the vehicle registered to you. So as soon as you have committed to buying the car with some kind of downpayment, you need to get the VIN to your insurer ASAP, and they send a copy of the insurance certificate to the dealer. Try to get a copy of the insurance certificate at the same time (either from the insurer, or from the dealer), as again, there may be a requirement to have a true copy in the vehicle at all times.
For us, finance from the dealer turned out to be much cheaper than a loan from our credit union. This may only be true for a new car. We had the loan facility in place before buying, but didn't use it.
posted by scruss at 9:12 AM on July 6, 2015
For us, finance from the dealer turned out to be much cheaper than a loan from our credit union. This may only be true for a new car. We had the loan facility in place before buying, but didn't use it.
posted by scruss at 9:12 AM on July 6, 2015
One important thing: don't get caught up in language about "payments." One way dealers try to make extra is to talk to you about "getting your payment down to $195 a month," or something tempting like that. What this really means is (a) you're paying less each month so that (b) they're charging you more interest. This is so commonly done that you should expect it. A lot of dealers will even start off the conversation with "what kind of payment are you looking for?" which you should see as a complete red herring that is an attempt to distract you from the total purchase price. In advance, you should know what you want to spend, the maximum you can comfortably pay per month, the amount you can pay down, and how many months you want to service this loan (shorter is better). Multiplying that all out will tell you exactly what total price you can afford. Just beware, if you go in saying "I want to spend $15,000 total" and they start talking about getting your payments down to XYZ and you don't stop them, you're going to end up paying much more for the car. Tell them your terms and let them meet those terms - don't let them play it the other way around. Walk if you have to. Hold out for your terms.
Don't fall in love with any particular car. Easy to say, hard to resist. But don't. If you can be patient, another car just like it or just as good will come along, at your terms.
When you're at closing, there are going to be a number of attempts to sell you warranties, upgrades, and service plans. You don't need any of these things. If you're worried about the car's condition, follow the advice above about having an independent mechanic check it before sale is final. It's normal to do that. But most used cars have already been through a repair process and don't have outstanding work. One exception is the timing belt: iif the car is anywhere near or over 50K miles, it's going to need replacing, and it's something dealers might skip and leave to you if the car is on the margin. It's fairly expensive, so ask if it's been done already if the car is anywhere near or over that mark.
One thing to watch out for is bait and switch. You see the car online, you email or call, you arrange to come down and drive it, and when you get there, magically, it has been spirited "off the lot." But they're happy to show you some other cars that are not at all what you want! This, for me, is an instant walk. It's an incredibly disrespectful sales tactic, used to unload shit or surplus cars that aren't selling, let alone its legal implications. If a place says this to you, just walk out and don't return.
posted by Miko at 9:35 AM on July 6, 2015
Don't fall in love with any particular car. Easy to say, hard to resist. But don't. If you can be patient, another car just like it or just as good will come along, at your terms.
When you're at closing, there are going to be a number of attempts to sell you warranties, upgrades, and service plans. You don't need any of these things. If you're worried about the car's condition, follow the advice above about having an independent mechanic check it before sale is final. It's normal to do that. But most used cars have already been through a repair process and don't have outstanding work. One exception is the timing belt: iif the car is anywhere near or over 50K miles, it's going to need replacing, and it's something dealers might skip and leave to you if the car is on the margin. It's fairly expensive, so ask if it's been done already if the car is anywhere near or over that mark.
One thing to watch out for is bait and switch. You see the car online, you email or call, you arrange to come down and drive it, and when you get there, magically, it has been spirited "off the lot." But they're happy to show you some other cars that are not at all what you want! This, for me, is an instant walk. It's an incredibly disrespectful sales tactic, used to unload shit or surplus cars that aren't selling, let alone its legal implications. If a place says this to you, just walk out and don't return.
posted by Miko at 9:35 AM on July 6, 2015
We just got a used car and had a pre purchase inspection from an independent mechanic that I randomly found online. The dealership didn't bat an eye when I said I wanted to take it to a mechanic. I signed a waiver saying I was responsible for any damage while it was off site. The inspection was extremely thorough. They hooked the car up to a computer and pulled the codes as well as took me underneath the car and showed me potential trouble spots. There were a few little things like "the transmission fluid needs to be changed soon" but overall I had confidence that the car we were getting is in good shape. Well worth the money and I can't imagine buying a used car without an inspection.
Some people use the inspection to further drive the price down but the dealer had already given us what we thought was a very fair price.
Just remember that there are lots of cars out there. Figure out using Kelly blue book and craigslist what the model and year you're looking at usually goes for. Be willing to walk if the car doesn't seem right or if you think the price is high.
posted by betsybetsy at 11:10 AM on July 6, 2015
Some people use the inspection to further drive the price down but the dealer had already given us what we thought was a very fair price.
Just remember that there are lots of cars out there. Figure out using Kelly blue book and craigslist what the model and year you're looking at usually goes for. Be willing to walk if the car doesn't seem right or if you think the price is high.
posted by betsybetsy at 11:10 AM on July 6, 2015
When you're at closing, there are going to be a number of attempts to sell you warranties, upgrades, and service plans
Sometimes that stuff happens well before closing. One conversation goes like this:
You: Your price seems a little high. Blue book shows this model in this condition for around X, but you're asking X+$1000. Why is that?
Dealer: Well, all our used cars come with a full two year mechanical warranty and a service plan. So you're getting the peace of mind from knowing you're not going to spend big money on repairs just because it's not new. If you buy from somebody else for blue book price, it's always going to be a bit of a crap shoot.
At this point, you're completely free to negotiate. You can just flat out ask them what they'd offer it for without the two year warranty and without the service plan. You don't have to buy extras you don't need just because the dealer uses language that makes doing so sound "normal".
posted by flabdablet at 1:40 AM on July 7, 2015
Sometimes that stuff happens well before closing. One conversation goes like this:
You: Your price seems a little high. Blue book shows this model in this condition for around X, but you're asking X+$1000. Why is that?
Dealer: Well, all our used cars come with a full two year mechanical warranty and a service plan. So you're getting the peace of mind from knowing you're not going to spend big money on repairs just because it's not new. If you buy from somebody else for blue book price, it's always going to be a bit of a crap shoot.
At this point, you're completely free to negotiate. You can just flat out ask them what they'd offer it for without the two year warranty and without the service plan. You don't have to buy extras you don't need just because the dealer uses language that makes doing so sound "normal".
posted by flabdablet at 1:40 AM on July 7, 2015
I'm a former car salesman.
- What happens with registration and license plates?
After you have the price figured out, you've committed to buying the car, you'll "sign out" with the finance manager who will handle all the paperwork to get the title and stuff transferred over and set up. If you're financing through the dealer (and I encourage you to let them try to beat the best rate you can get on your own) the finance manager is the guy who lines up the loan and represents the bank writing the loan.
- How do I get car insurance? Do I need to get that before I buy?
You can call an agent while at the dealership to setup insurance if you want but it's a good idea to shop around first. I like going through an insurance broker. They'll write policies for a bunch of different companies and aren't loyal to any of them. They're commission but the rate they can get isn't any more (and sometimes less) than what you can get by going directly to the company and the broker is better at shopping around than you are. That will also make it easy to get things setup to where you can call the guy with the VIN and mileage and whatever other minor details they need about the specific car and be good to go.
I think that some of the logistics are dependent on your state. Like, in some states you can just call sometime in X number of days and have the policy back-dated or something.
- Is the timeframe (2-3 days) to purchase this car reasonable? I'm not picky about much.
Totally doable.
- Do I for sure need to get the car inspected by an independent mechanic? What if it's certified pre-owned by the car company?
It's always a pretty good idea, certified pre-owned, two-ish year old lease returns, or rental returns are all a lower risk than anything else and you'd probably be okay skipping it.
- Is it cool to walk away for a day?
Totally. Salesman always want you to buy a car the first time you step onto the lot but most people don't. It happens so often that sales people call their business cards, "Tickets to the be-back bus" because you said you'd "be back" later. One thing that makes it easier, don't worry about the price until you know you want to buy that specific car. Otherwise just assume that if you're looking at cars that are in your price range they'll make the price work.
- I am a late 20s woman who has never owned a car. I am an easy mark. I have no one who can come with me to make me look like I know what I'm doing. What do I need to watch out for?
Not anything in particular really. You've done your research and you know what you should have to pay. As long as you stick to your guns and remember that you can walk away at any time, you'll be fine. My advice is always that a motivated buyer will get the best deal. If you tell them that the only thing keeping you from buying the car right now is the price and tell them what price you need that to be, they'll do everything they can to make that work.
- Do I pay the deposit by regular check?
Yep, if you can't make the deal work and don't buy the car, they'll give you the check back.
- Can they do all the financing offer information at the dealership on the same day?
Yes. Dealership are in the business of removing the obstacles to you buying a car. See what kind of rate you can get on your own, tell the dealership what that rate is, and let them try to beat it. Also keep in mind that the price of everything the finance manager offers you is negotiable, that includes the rate. It costs nothing to ask.
posted by VTX at 7:40 PM on July 7, 2015 [1 favorite]
- What happens with registration and license plates?
After you have the price figured out, you've committed to buying the car, you'll "sign out" with the finance manager who will handle all the paperwork to get the title and stuff transferred over and set up. If you're financing through the dealer (and I encourage you to let them try to beat the best rate you can get on your own) the finance manager is the guy who lines up the loan and represents the bank writing the loan.
- How do I get car insurance? Do I need to get that before I buy?
You can call an agent while at the dealership to setup insurance if you want but it's a good idea to shop around first. I like going through an insurance broker. They'll write policies for a bunch of different companies and aren't loyal to any of them. They're commission but the rate they can get isn't any more (and sometimes less) than what you can get by going directly to the company and the broker is better at shopping around than you are. That will also make it easy to get things setup to where you can call the guy with the VIN and mileage and whatever other minor details they need about the specific car and be good to go.
I think that some of the logistics are dependent on your state. Like, in some states you can just call sometime in X number of days and have the policy back-dated or something.
- Is the timeframe (2-3 days) to purchase this car reasonable? I'm not picky about much.
Totally doable.
- Do I for sure need to get the car inspected by an independent mechanic? What if it's certified pre-owned by the car company?
It's always a pretty good idea, certified pre-owned, two-ish year old lease returns, or rental returns are all a lower risk than anything else and you'd probably be okay skipping it.
- Is it cool to walk away for a day?
Totally. Salesman always want you to buy a car the first time you step onto the lot but most people don't. It happens so often that sales people call their business cards, "Tickets to the be-back bus" because you said you'd "be back" later. One thing that makes it easier, don't worry about the price until you know you want to buy that specific car. Otherwise just assume that if you're looking at cars that are in your price range they'll make the price work.
- I am a late 20s woman who has never owned a car. I am an easy mark. I have no one who can come with me to make me look like I know what I'm doing. What do I need to watch out for?
Not anything in particular really. You've done your research and you know what you should have to pay. As long as you stick to your guns and remember that you can walk away at any time, you'll be fine. My advice is always that a motivated buyer will get the best deal. If you tell them that the only thing keeping you from buying the car right now is the price and tell them what price you need that to be, they'll do everything they can to make that work.
- Do I pay the deposit by regular check?
Yep, if you can't make the deal work and don't buy the car, they'll give you the check back.
- Can they do all the financing offer information at the dealership on the same day?
Yes. Dealership are in the business of removing the obstacles to you buying a car. See what kind of rate you can get on your own, tell the dealership what that rate is, and let them try to beat it. Also keep in mind that the price of everything the finance manager offers you is negotiable, that includes the rate. It costs nothing to ask.
posted by VTX at 7:40 PM on July 7, 2015 [1 favorite]
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- Call your insurance company. Obviously you can't get insurance on a car you don't own yet since you won't have the VIN and other info you need. I've always just told the dealer, "yeah, sure, I have insurance." and that was that. Get it online or via phone ASAP after taking delivery.
- Inspected by a mechanic? If you want, but it's doubtful the dealer will allow this pre-purchase. Maybe see if they have a 30 day warrantee or something like that.
- walking away? Hell yeah, that's your best tactic as a buyer. Tip - wait till close to the end of the month/quarter so that the dealer will be looking to make more sales then.
- watch out for? Anything "dealer installed" like undercoating (but I think that's not really a thing anymore) or other add-ons to the price like "dealer prep" or "delivery". You don't pay an extra charge at walmart for your items. When negotiating, ask for the "out the door" price. Otherwise, they'll quote you a price, but when you start talking to the finance guy, after agreeing on a price with the salesguy, there will be 5 random add-ons that sound necessary like those mentioned above.
- Yes, pay by check. Heck, when I bought my last car, I just signed a "promissory note" which meant I had to come back in a few days with the check.
- financing, yep, they will be happy to, since that's extra revenue for them. You'll probably get a better rate from a 3rd party like your bank or credit union, though.
- Where is your residence? For taxation purposes, you may need to prove your place of residence. The dealer doesn't care about your license, other than proving you are legal to take it for a test drive.
- speaking of test drive, when on it (hopefully by yourself) go to another parking lot, open the doors, trunk, everything to make sure it all works. open and close all of the power windows and locks. basically, use every possible electronic widget to make sure it all works. I find I'm more comfortable doing that without the sales guy hovering over my shoulder and yammering about them.
posted by Mr. Big Business at 8:30 AM on July 6, 2015