I realized I have no idea how to buy a car.
July 22, 2019 6:16 AM   Subscribe

I am going to buy a car. I have applied for the loan, I know what car I want to go look at, but I realized I have no idea how this process actually works. How does one go about buying a car?

So, I have my loan that I am *approved for* from USAA. I have not pulled the trigger on actually funding the loan yet but I am approved for about $4-5,000 more than the max I want to finance, so I think I'm good there. I have my downpayment amassed and I have the title to my current car (somewhere, it's in my house, I have a reasonable idea of where it is). I have A Man lined up to go with me so that I will have a lesser chance of gender-based stupidity happening (annoying but I feel like a good insurance policy).

So I've done all the pre-work for this but I have no idea how this should go at the dealership, because the last time I bought a car, I had nothing to put down other than my trade-in, and I financed through the dealer. So how do I go about this?

I roughly think I need to do the following things:

1) Finalize/accept the loan from USAA.
2) Transfer the money for my down payment into an account for which I can write a check/authorize an ACH (which of these will the dealership want to do?)
3) Find my title and bring it with me for the trade in on my car

I plan on doing this on a Saturday, since I have a job and I can't just drive 30-45 mins out of town on a random weekday to deal with this. How will this work so that I can drive off the lot this weekend with a new-to-me car?
posted by Medieval Maven to Work & Money (14 answers total) 9 users marked this as a favorite
Others can chime in on the mechanics, but for pricing, Consumer Reports offers the Build & Buy Car Buying Service, which gives you solid information to bargain with.
posted by Johnny Wallflower at 6:40 AM on July 22, 2019 [1 favorite]

I haven't done this in awhile, but when I've bought new cars in the past, I decided exactly what I wanted and decided exactly what I wanted to pay and just walked in and said so. I didn't care how much they gave me for my old car. I didn't care how much of a "deal" they gave me. I didn't care if it was a burden for them. I just said "I want this Honda Odyssey in this color and this trim level. It's sitting over there. I am trading in my VW Passat that is also sitting right there and I have the title. I want to write a check for $20,000 and walk out as soon as I possibly can. Let me know if that is acceptable."

Then I had to say "I'm sorry, I must not have been clear. I'm not interested in this process. I thought I asked a simple question. If the answer is no, that's fine. Just tell me, so I can go to another car dealership."

Eventually the answer was yes, but it took awhile and they tried stupid sales things a couple times, mostly centered around my trade in, trying to make me think if they gave me that much for my trade in they would be getting fleeced.

There are tools available to see dealership price, holdbacks, and other various asundy things to help you figure out a fair price or time your buying. Back then (my oldest just turned 10 so I guess my Honda Odyssey is 10 years old!) I used Edmunds I think. Try to be fair and let the dealership get their money, but not too much. If you like doing this sort of thing and live in a city where you can try 5-6 dealers, you could probably get a good deal.
posted by cmm at 6:49 AM on July 22, 2019 [3 favorites]

Response by poster: To clear up the actual car-finding process: I am using USAA's car finding service, so I get some kind of no-haggle price for the car - I'm not concerned about that part so much as the actual mechanics of the deal. Thanks!
posted by Medieval Maven at 6:55 AM on July 22, 2019 [1 favorite]

Then I don't think you have anything to worry about. Just show up with the title to any trade in, info about your pre-approved loan, ability to write the down payment check, and a couple forms of ID and they will walk you through everything. Just a normal personal check has worked fine for buying cars for me in the past. I do not think you will have any problem writing a personal check. Depending on where you live you may have a Use Tax that might surprise you. You'll pay for plates then too. I think those are the two main costs that may not be included in what you're already thinking.

The actual buying process isn't that hard and they do it a lot and are very motivated to make it work.
posted by cmm at 7:06 AM on July 22, 2019 [5 favorites]

1-2 - I'd call up USAA and ask them to walk you through what will happen at the dealership.

In my experience what typically happens is the bank preapproves you and basically tells you "you're approved up to borrow $X." Then, when you go to the dealership and negotiate the final price and have determined how much you want to borrow from the bank, the dealer will call up the bank for you and arrange all the paperwork to arrange the loan amount - this is a necessary step because the bank will want to ensure they actually hold the title to your car as lienholder.

Tactically, a few tips - dealers like to mix all the financial elements to make the negotiation process confusing. (e.g. trade-in value, price of vehicle, add-ons and fees, financing, monthly payments). The key is to negotiate on all of this separately.

* Negotiate on final, out the door price of the car first. Don't get distracted with questions about financing or monthly payment or other discussions.

* Negotiate on the trade in value completely separate from that next. Resist all attempts for them to link the trade in value to you doing something else (i.e. we'll give you more trade in value if you take financing from us)

* Negotiate on financing if you need it - depending on the dealer, sometimes they can offer a better rate and terms. But you have circumvented all of this knowing that USAA is your backup if they can't deliver.

On refresh: None of the above applies since you're getting some prenegotiated price.
posted by Karaage at 7:09 AM on July 22, 2019 [1 favorite]

Car dealers make their money on financing and aftermarket crap like extended warranties. Your securing of external financing removes one major incentive for them to devote time to you, as you’re effectively a cash buyer. So they’ll throw everything they have at selling you an extended warranty, separate warranties for glass, wheels and tires, key fobs, paint chips etc etc. Add it all up and it can easily add $2000 to the price of a car, which many people just roll into their financing package, thus making it even more profitable for them and a ripoff for you. They’ll also try to sell you paint protection film, rubber mats, and every other dinky accessory you could get for half the price after you buy the car, from elsewhere. They will spend hours upseling you on this stuff if you let them, and scaring you into acceding with tales of how much it would cost to replace your engine or whatever. Oh, and they’ll also try to sell you a service contract that, priced out, amounts to expensive oil changes with more chances to upsell you on repairs that aren’t necessary or vastly overpriced (like charging $50 to replace a $13 air filter you do yourself in 5 minutes with zero experience).

Say no to all of it. Tell them up front you’re not buying any warranties or aftermarket treatments from them. They’ll still try their hardest to sell you. But a massive amount of data shows that extended warranties are almost never a good deal on a new commodity car with reasonable reliability ratings (and why would you buy anything else?) They’re pure profit for dealers. Most people never ever recover the cost. And if you really want one you can buy an extended warranty any time before the manufacturer warranty expires from the same third party companies the dealers use (even if the warranty is branded with the manufacturer’s name it is likely administered by one of the big companies that do this stuff and exist to deny claims, by the way).

A steely eyed determination not to spend a dime on anything but the car you’re buying is a necessary attitude. It’s all a rip off. The few people who ever benefit from such warranties are offset by the vast majority who don’t, and you’re way better off putting the same money in a repair fund for years down the road.

Car dealers are called “stealerships” for a reason. They know all the psychological tricks and practice them every day, whereas you may only buy a few cars in your life. Assume you’re outgunned on any strategy of negotiation and just say “nope, Consumer Reports says all extended warranties are a ripoff and why should I expect my new car to have major problems not covered by the manufacturer warranty? Don’t y’all stand behind the reliability of this car? Because if you don’t there is an [brand y] dealer right across the street.”

Practice saying NO. You’ll need determination. Don’t give them one inch of wiggle room.
posted by spitbull at 7:09 AM on July 22, 2019 [5 favorites]

This may not apply in your situation, but at least in California your auto insurance during the grace period between buying a car and adding it to your policy is only at the level of your current policy. Since I’d previously been driving an older car with liability only, I had to coordinate with my insurance company to add collision/comprehensive before driving off the lot.
posted by doctord at 7:24 AM on July 22, 2019

I am a USAA member as well, and the last time I bought a new car I used their collaboration with Consumer Reports (?) to have USAA get prices from all the local dealerships and then I just walked in, showed them the paper and we did the transaction without a single haggle.

Maybe try this page?
posted by terrapin at 7:33 AM on July 22, 2019

The following link looks like a total scam, but I would really recommend buying a car by email and following the steps in "The Ultimate New Car Buying Guide for 2019." That site has been updated since I went through the process a couple years ago, but the basic steps are the same. I think I found that site and the idea for buying a car by email in a previous askme, but I can't find the link right now.

Essentially you pretend you don't have a phone or the ability to go into a dealership and conduct absolutely everything over email. You have to know exactly what car you want and then contact tens of dealerships in your region to get quotes. I contacted approximately 50 dealerships. Keep it all organized when you get the quotes. Then, take the lowest quote and go back to all the dealerships that responded to you and try to get them to beat it. Continue until you've got a price no one else will beat. It took me two rounds of emails, but the second was only about 10 emails.

I can send you a more detailed description of what I did via direct message, but the end result was a brand-new car from a dealership about an hour away from me that was $500 cheaper than comparable previous-year models with 5-10k miles on them at closer dealerships. The price was also a bit better than those services (through Costco, USAA, and others) that purport to do the negotiating for you. In fact, during the second round once I had the first low quotes, a few dealerships told me that they couldn't believe the price I was trying to get them to beat and if the car actually existed for that price, I should take it. That car did exist at that price, and I bought it.

Through the process, I did find one other dealer in that state that said they would beat any competitor's price, but I liked how the first dealership dealt with me in emails. I did mention that another dealership offered to beat their price, but I wanted to work with the first, so if they threw in an accessory, I'd go with them. They ended up giving me the luggage compartment concealer thing to secure the deal.

That site also used to have instructions for buying a used car using a similar method, but I couldn't find it in the quick glance I gave the site just now. Maybe it's still there.

By far the most important thing is to be disciplined about only negotiating by email (for dealerships that didn't have a direct email, I just put (123) 456-7890 into the phone section of the contact form) and organizing the data you get back. Also, it's a quick process. For me, we had a deal I think 3 days after I started sending out emails.


Everyone else is correct about declining all the extra things. I didn't even tell the dealership I had a loan until I was in the dealership to sign the paperwork. They wanted to add "simonizing" and other stuff but I just declined it all. Stay firm! If you follow the steps in this email system, you will have a confirmed out-the-door price in writing for a specific vehicle with a confirmed VIN when you walk into the dealership to close the deal.

Be aware that when you do a test-drive you have to give them your phone number and sometimes email. You will get a lot of follow-up phone calls and emails, so limit the number of test-drives you do. We knew the basic type of car we wanted and had narrowed down to 3 manufacturers, so we ended up doing 3 test-drives.
posted by msbrauer at 10:22 AM on July 22, 2019 [2 favorites]

If you are able to manage the logistics, we found selling our "trade-in" cars separately to CarMax, was much, much better than using them as a trade in at the dealership when we bought our new cars.

And 1000X yes to declining all extras. Even if you state upfront that you will not be buying extra warranties and protectants, they will still seriously pressure you to buy all kinds of extra crap. (Though it was kind of cool when the salesman lit the hood of the car in the showroom on fire to demonstrate the paint protector...)

Also, for those who don't have a prenegotiated price, I can highly endorse the "buy by email" scenario mentioned above by msbrauer.
posted by sarajane at 11:59 AM on July 22, 2019

On fees: there are legitimate fees and not legitimate fees. The only ones that I know of that are legitimate are: state taxes (not really a fee), destination charge/fee (something charged by the manufacturers to ship the cars to the dealers -- this should be listed on the window sticker), and registration costs. Fees that are generally negotiable (and that you should negotiate out of paying) include things like "advertising fee," "dealer prep fee," and other different transportation or shipping fees (beyond the legitimate window-sticker destination fee). In my experience, the salespeople try to act like it's completely crazy that you wouldn't want to pay these fees, but will back off if you hold your ground.

Also, you talk about a "down payment," but if you're getting your loan from somewhere other than the dealer, then you're not going to give them a down payment; you're going to give them a check for the total cost of the car. The last place I got my car, they were willing to take a personal check, but this likely varies by dealer, so you should ask -- they may want a certified check. It's certainly reasonable to go and get one after you've negotiated a price, but make sure that the bank you want to use is open on Saturdays.
posted by Betelgeuse at 12:00 PM on July 22, 2019

I just bought a car with a pre-approved auto loan from my credit union, which functions just like USAA, including the car-buying service. The person who handled my loan walked me through the steps of the actual purchasing process, which wasn't too difficult: take a cashier's check for the down payment made out to the dealership, along with a letter from the credit union that provides the amount of the pre-approved loan and interest rate. Go in and decline all the extended warranty BS they try to sell, and ask them for an options contract. The contract allows the vehicle to be driven off the lot, with a commitment that the credit union will provide the remaining amount by x date (usually within 3-5 days of the purchase date.) Then, take the signed options contract to the credit union, they will make a copy for their records, and someone from the credit union follows up with you to finalize the details of the loan payment schedule, and other information. They cut a check to the dealership and mail it in, and that's it.

The process for USAA is likely to be similar, with some details different - this anecdote is basically to tell you that the best source of your actual next steps is the loan officer at USAA.

Also, since it's a new car, you do not have to do any DMV work - the dealership will handle that for you (it's what the documentation fees, etc, included in the purchase price, are.) You'll hand in your title for the trade-in, they'll subtract that amount from the total, and the new price will be reflected in the options contract you sign.
posted by Everydayville at 12:23 PM on July 22, 2019

Seconding CarMax for trade-ins. It's what I did last time around and it was super easy. Go to carmax, tell them you want to sell them your car. They're gonna kick the tires and drive around the block and they'll give you a quote on it that is good for 7 days. Do this a few days before you go to buy new car.

When you go to buy new car, the dealership is going to do the same thing - drive old car around and kick the tires and give you a price for it. If their price is less than carmax's price (it probably will be), go back to carmax with your written offer. They'll look the car over one more time to make sure nothing has exploded in the meantime, then they'll write you a check for the number on the offer and you'll hand them your keys and your title.
posted by craven_morhead at 10:06 AM on July 23, 2019

Response by poster: Update, I bought the car yesterday. This is how the whole process went, for what it's worth to posterity:

1. Apply for the loan through USAA.
2. Find cars through the USAA True Car service, make a spreadsheet of these cars including location of car and VIN.
3. Ignore literally 400,000 phone calls, emails, and text messages from the dealerships.
4. Confirm with the dealers the night before that the cars I wanted to see were still on the lot.
5. Test drives, confabbing with my partner in crime about which of these vehicles if any I really wanted.
6. Return to the dealership, start the process with them, go through their thing with the finance guy. Do the downpayment -- WITH MY DEBIT CARD, which was something of a surprise. Because I went through USAA/True Car there was no haggling about the price, though I did get them to give me a little bit more on my trade-in than they originally offered. Sign over my old car, sign a ton of paperwork.
7. Call USAA and give them all the loan information, SIGN ALL MY LOAN DOCS ON THE MOBILE APP (!) and send funding form to the dealer via email.
8. Drive away.

The finance guy was really oddly insistent that I should already have the funding form when I showed up, but there is no way I could have done that -- I didn't have the final price, nor any of the other information that USAA required to get that form first, and ultimately it didn't matter because I was able to directly email it to the finance guy and he was fine with it. Ultimately it went 100% better and was 100% less sketchy than I was prepared for. I had the requisite Man with me to ensure that I didn't get swindled but the sales guy I dealt with was not a problem at all (the other sales guy that we talked to was That Kind of Sales Guy though so I'm glad that I had the option of someone to back me up if needed).

Overall A++ do recommend going the USAA/True Car route if you have the option!
posted by Medieval Maven at 7:03 AM on July 28, 2019 [2 favorites]

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