I picked out my first car the way most 16 year old girls in Orange County do. Spot it. Get dad's attention. Point. Scream out of excitement. That is pretty much the full proof plan to have it waiting in the driveway when you turn 16. I mean it,
was a little different since my dad owned a car lot - I just casually mentioned how much I loved the purple pontiac firebird that was on his lot, and it just happened to show up in our driveway when I got my license (I didn't expect that, I promise).
When I totaled the Firebird, my dad showed up with a new Honda Civic and told me I had a $285 payment a month (gasp! the audacity!). I had that Civic for 8 years and ended up selling it on Craigslist in Sacramento before moving back to so cal. Selling on Craigslist is probably the easiest thing you can do, even better than AutoTrader. In my experience, everyone that came to check out the car was a serious buyer, and they didn't waste my time. They weren't coming to me for a joy ride. I don't know why anyone would want to go for a joy ride in a Civic, but you never know what people are into these days.
I was looking at a couple cars before purchasing the Honda CRV. Top of my list was the Lexus IS250, Hyundai Elantra, Nissan Juke, Toyota Prius, Scion XB and the Hond a Insight and Fit. Pretty much all over the place, but I knew I wanted a compact/midsize car.
I think it's really important to do your research online before you go into a dealership so you don't waste your time. The cheaper cars like the Elantra, Honda and Scions all come at a low base price, but as you pile on the extras it really starts to add up. So it's good to have a list of what features you can't compromise on (ex: sunroof, bluetooth, navigation). So after I had my list I went for a bunch of test drives. Because my dad was in car sales, he taught me to not waste a salespersons time. Let them know you are there for a test drive, and don't go during peak hours. Saturdays are the worst. You never want a salesperson to be missing a prospective deal to go on a test drive with you, especially when you aren't planning on making a purchase at that time. So just be mindful of when you go. Sunday mornings are great if you want to go on a weekend, and if you have the luxury of going on a weekday, go during the day, not after work.
Here is how I narrowed down my list - I took the IS250 off because for being a small car the gas mileage is pretty terrible. Also, in the price range I was looking at, I would have to get a used one and I was really excited about a new car, so that came off the list.
The Hyundai Elantra was a great ride and in the price range I have, I could've had it with leather seats, bluetooth, moonroof, etc. But they weren't willing to give me a good lease price on it, and since this is the first year it's been out, I didn't want to risk buying it, especially not knowing what the resale value is going to look like.
The Nissan Juke was probably the cutest car I drove, but as soon as I heard that it only took premium gas, it was out off the list. Pretty ridiculous for a small SUV.
I didn't go for the Prius because they are coming out with the fully electric Prius in 2-3 years, so I figured that can be my
next car. The Honda Insight had really low horsepower, and I was convinced I would get into some deathly accident on the 5 because I wouldn't be able to speed up in time. I seriously felt like I was driving a golf cart.
The Scion XB was great and they had an awesome lease deal with a really low money factor (money factor is to a lease what an APR is to a purchase). The equation works differently so you can always ask the dealership to translate the money factor into an APR for you so you know what kind of deal you're getting. I ended up not getting it because they didn't have the color I wanted and I didn't like it
enough to wait.
The Honda Fit was thrown out because I felt like I was driving a toy car, it's really great and roomy on the inside, and I totally recommend it if you dig the way it looks, it just wasn't my cup of tea.
The CRV was love at first sight/drive. I never used to like the CRVs. I thought they were ugly and weird looking until I saw a white 2011 CRV. I loved the way it looked and the drive was equally great. Super smooth, barely any outside noise coming in, I was sold.
So the car I wanted was picked out, it came down to getting the best deal on it.
There is an MSRP on the vehicle you want which is the manufacturer's suggested retail price. But there is also an invoice price. The invoice price is the wholesale price the dealership paid the manufacturer for the car. You want to aim to get your car at or under invoice. How does a dealership sell you a car at or below invoice? With help from the car manufacturer. When dealerships build up large inventories of unsold vehicles because of slow sales, they aren't ordering more cars from the factory. The factory doesn't like this so they start offering incentives to customers to buy more cars. Incentives come in the form of 0 percent loans, rebates, special lease deals, etc. Manufacturers also provide factory-to-dealer rebates and bonuses in monthly promotions. Dealers can pass along some of these incentives to their customers. It's good to buy a car from a chain like AutoNation because they buy in such high volume that they get more breaks from the manufacturers. Keep in mind that if you're looking at a car that's in high demand (like the Elantra or the Prius), you're probably not going to be able to get under invoice because the dealerships have no problem moving those cars. So you should have fair expectations when it comes to pricing. Aim for between invoice and MSRP on those vehicles.
To find out what the invoice price is on the car you want you can go to www.edmunds.com or www.cars.com. Once you know the invoice price start emailing all the dealerships around you. I emailed every dealership that was within a one hour driving radius. Go to the car manufacturers website and click on the "request a quote" button. You can specify the exact car you want (if it doesn't let you pick out exactly what you want, put it in the comments section) and ask them what the best deal they can offer you is. As soon as one of them comes back to you with a price under invoice, start bidding that dealership against the others. In my case, Hollywood Honda gave me $300 under invoice, I took that price and asked other internet departments if they could beat that. The internet departments are easy to deal with and you can do everything through email. Internet departments have grown over the years as more people look to ecommerce solutions, so dealers have a big group of sales folks waiting to get back to you.
Once you go into the dealership, it's a different story. Sales and financing are two completely different animals, so you have to make sure your salesperson has your back when it comes to taking you through the financing department. The finance managers want to screw you over and get as much money as they can from you. Honda had advertised a 0.9% APR rate online, but as soon as the finance manager came to talk to me he was showing me the car at a 3.9% APR rate. I told him it wasn't going to happen unless it was at 0.9%. I didn't have to do a lot of back and forth with him, but always be prepared to walk out if you're not getting the deal you want, especially when you know it's a realistic deal. Never get lost in the moment and give in because you were really excited to drive your new car home that day. Car shopping is a total chess game and you have to be prepared to play the game. They will call you back in, trust me.
I ended up getting a really good deal, and the APR I got was ridiculously low. I'm basically paying only $400 of interest on my financing...total. This took a couple weeks, but I think it was definitely worth the time and energy I put into it. Never wait until the last minute to get a car, because that's when you'll get screwed. If you're at the end of your lease and can't wait to purchase or lease again, just rent a car for a week or two to give you some buffer, it would end up costing around the same as a car payment anyway, and it gives you some more time to get the best deal possible.
Hope this was helpful!
