Buying a new or used car can seem like a bit of a long-winded experience. You have to research, contact dealerships, get the right price and then establishing your credit for a loan if you need it. It used to be that would involve trips to several dealerships, picking up brochures and trying to get quotes.
“Those days are gone,” says Peter McInnis, internet manager at Mercedes Benz of Fort Lauderdale. When we spoke to him, McInnis was actually confused by the concept of buying a car without internet resources; just five percent of his customers go that route.
So if that’s the case, then there should be a general game plan for how to make it an easy process. PSCars.com spoke to internet sales experts, credit rating impresarios and others to find out how to make buying your next used or new car as painless as possible.
What Do You Want?
Your dream car?
We, and the dealerships we talked to, advocate getting as much of your research done online before you start looking for quotes. Another article will detail the specifics of how to go about it, but here is a brief primer:
1- Make a list of your needs, wants and likes. Use a tool like PSCars.com to ensure that you find models that fit the majority of your needs, most of your wants and a few of your likes. Have a list of three or four cars that fit those needs best.
2- Create a budget by listing your monthly paychecks (if you’re paid bi-weekly, double the net payment on your most recent stub), and then subtracting your expenses. The result is your total budget for a car, including the loan, gasoline (or diesel), insurance and maintenance.
3- Match the models listed in step 1 with the finances in step 2. You should find a couple cars, wagons or SUVs that fit your need, whether they’re new or pre-owned vehicles. Now take a deep breath and let’s get ready to deal with the automotive salespeople. They won’t bite, we promise.
What Should You Look for from Dealerships?
McInnis says that he has access to dozens of images whenever a customer asks for resources to help them choose a car, in addition to videos that he sends to all leads.
You should look for an internet sales manager that provides these sorts of multimedia tools. As A.J. Hasty, Acura of Palm Beach Internet Manager, understands, you also need to look for dealership staff who are prompt. He expects to be able to provide a quote within minutes of receiving it through the corporate intranet.
That means that customers shouldn’t deal with companies that aren’t prompt, courteous and eager to help them answer questions. As we’ll soon find out, though, that doesn’t mean that they are looking to be taken advantage of.
How Do You Act Around Internet Sales Managers?
Hasty says that he has been “blessed because I have the right people [as customers],” ones who understand that he will work hard on the customer service side. He’s even delivered cars as far as four hours away, so that customers never had to step foot in the dealership.
But many internet sales managers we spoke to say they don’t have a lot of wiggle room in their quotes. Since it’s designed to speed up the buying process, they argue that they are giving the best price they can afford to.
It may mean that you should be doing any research you need prior to e-mailing a representative, and to leave haggling to issues such as delivery or trade-ins. The dealership personnel PSCars.com spoke to admitted that their job performance is based on a key indicator, the Customer Satisfaction Index.
The numbers for each salesperson are based on the surveys that new and used car buyers receive shortly after taking delivery. They determine any bonuses, as well as who gets to keep their job. So if you are a terror for them to deal with, they might just ask you to kindly move on. In some cases, it’s worth it to lose the sale if they know their ratings will go down.
That same mentality means it irks sales managers when potential customers give out false information like telephone numbers or e-mail addresses. One went so far as to day that the practice eliminated any chance of price negotiation.
At the same time, A.J. Hasty told us that every e-mail he sends out includes the line, “I want to make it easy for you to buy this car.” He and others told us that they are genuinely interested in helping consumers.
Just remember, they have a job to do, as well.
Steps to Make Your Money Work for You
By now, you should have one or more quotes, and a healthy understanding of the car you want. That doesn’t mean you should be rushing out to sign a contract or get ready for a new car in your driveway or in front of your home.
The financial side of things is often the least-explained and yet most important aspect of buying a car. Taking advantage of certain requirements and stipulations can mean the difference between a $20,000 car and a $17,000 car.
Start with dealer incentives. They can seem great, but Thomas Alexander, professor of finance at Norwood University, notes that many discounts that are above $1,000 or so are used on cars that are being discontinued. If you’re planning on re-selling the car down the road, the discount may not be as valuable as the loss in re-sale pricing.
If you plan on taking advantage of a zero percent interest rate, use a spreadsheet or online loan calculator to determine the difference between the loan amounts and any incentives you may have received. In most cases, the lower interest rate is the most valuable thing you can get.
That Thing About the Credit Score
One of the key determining factors about interest rates is your credit score, the number that you get from credit agencies and determines your rough ability to be a good loan target. There are a variety of resources out there about how to improve your credit score, but we want to delve into one that affects short-term issues like buying a new or used car.
Wayne Sanford calls himself Wayne the Credit Guy, and seven years in the credit re-building industry has seen him trying to find ways for consumers to come out on top. One tip he normally advocates is to pay down the balances on their credit cards, because up to 30% of that credit score is based on balance ratios, or the amount you have in debt versus your credit limit.
“What people don’t realize is when you pay off or down your credit card the company does not automatically call the bureaus to report that information…. They report that information monthly,” he says, arguing that consumers should wait at least 45 days if they expect their credit rating to drop drastically by paying off bills.
John Curran is a PSCars.com automotive writer. He can be reached at JohnC@practicalsystems.com.
