Friday, February 1, 2013
Get It Right Friday - New Car Buying Tips for Women
Yes ladies & gentlemen, I have a new whip, a new car, a new ride. After 12 years and 345,000 miles on my 2000 Toyota Camry, I have invested in a new car. In December, I bought a 2012 Ford Edge. I was bit nervous about starting this process and there were several reasons: 1. I'm a woman. Salesmen notoriously have a reputation for taking advantage of women in the car buying process. 2. It's been 12 years since I bought a car and I used the internet sales team of the Toyota dealership in that process. 3. I was doing it alone. I had planned to take a guy friend with me to negotiate the terms but timing wise it didn't work out.
At the end of the process, I feel comfortable that I got a great deal. Let me share with you some tips and lessons learned that made my car buying process as a woman a success.
1. I wasn't desperate for a new car. Though my Camry is 12 years old & has high milage, I've taken good care of the car. The car is in great condition. I wanted a new car but I didn't HAVE to have one. Plus my Camry is paid for! So, I was totally prepared to walk away from a bad deal because I wasn't in dire need. This allowed me to take my time and really make sure I was happy with the deal before I purchased. I negotiated my deal over 4 days.
2. Know your credit score & try to purchase when your credit is in good standing. When you have a great credit, you have more power when looking at financing options. The better the credit score, the lower your interest rate will be. You are entitled to 1 free credit report per year. Use the information to ensure that your report is accurate and that negative items have been cleaned up before you go in. You don't want any surprises when you go to make a major purchase.
3. Research the going price of your car at several dealerships before going in to talk to a salesperson. The internet is your friend. Two websites I would recommend is www.carmax.com & www.cars.com. Carmax is the home of no haggling. Therefore, you already know that the salesman's commission is included in the advertised price. That should be the highest that you pay anywhere. Cars.com shows you all the dealerships in the mile radius that you select that have the car that you're looking for and the price they are asking for it so you can compare that against the Carmax price.
4. Research what banks are offering for interest rates. Go to bankrate.com and input the price of the car and the terms of the loan (60 months, etc). Also check out your local credit union rate if you are a member.
5.Understand that your payments are determined by the cost of the car, the interest rate of your loan, and the duration of the loan. If you tell the salesman or finance manager what your desired monthly payment amount is, they will do their best to get it there for you. That could include stretching your loan to 72 or 84 months. Who wants to pay for a car for 6, 7, or 8 years? Your goal is to focus on getting the base rate of the car & interest rate as low as possible. If your debt load & expenses are low, you should be able to get your loan terms to no more than 60 months. This was my repeated point with the salesman. He kept asking me, what payment do you want? My response was, if you get me the lowest interest rate possible and we drop this base rate, the payment will be right. Let's work on that. Of course I knew how much I could afford to pay per month, but if I could go lower than that, why not right? And I actually did. Ask for the details. Don't accept quotes that don't have the interest rate on them or run your own numbers through bankrate.com to see where they are putting you as far as an interest rate. Ask them to see all the taxes & fees. Ask for the out the door price & have them reflect EVERYTHING that makes up that price. Only accept quotes in writing. Their job is to make as much as money possible and your's is to get a reliable car for as low as possible.
6. Don't put money down unless it's a going to make a significant difference in the cost of the car. Putting $2,000 or $3000 dollars down is really only going to drop your car payment per month about $10 to $20 on average. Don't give the dealership your money for that exchange. Ask for quotes that show the difference between $500, $1000, $2000, $3000, and up down until you either see a significant difference or you decide to go with $0 down. Don't worry they'll either run the quotes or you can run them yourself on bankrate.com.
7. Test Drive the Car at a Dealership Separately from when you go to Purchase. I test drove the Edge 3 weeks before I went to start negotiating a deal. I wanted the rush, excitement, and smell of being in a new car to wear off before I went in to negotiate a deal. The salesman wants you to make decisions, especially as a woman, in a highly emotional state, where you just want to get into the car. Don't make decisions when you're emotional (that goes for anything in life). Make your decision when you are calm & rational. This is why buying a car when you are not desperate is sooo important.
8. EVERYTHING is negotiable. I negotiated the base rate, the interest rate, the terms of the warranty (my car was used), I even got free oil changes thrown in. If you don't ask for it, they are not going to just offer it to you. Remember, the salesman does is not working for you. YOU work for you. The worst thing they can tell you is no. But you'll never know if you could get it if you don't ask. If they want that deal, most times they'll say yes.
9. The absolutely best time to buy is at the end of the year. In December, not a lot of people are buying cars. It's cold. Everyone is focusing on Christmas. But it's the best time to buy because dealerships are trying to get rid of inventory at the end of the year. The closer you can get to December 31st the better. But leave a couple of days to negotiate. You don't want to have to make a deal on the day you go in. if you can't wait to buy a car in December, the 2nd best time to buy a car is at the end of the month.
10. Remember the last one to blink wins.
Hopefully, this article will be helpful to another woman who is going through the car buy process alone. Share any of your previous car experiences below!