If you are like me, you are a grownup who’s father/parent has always taken care of certain things for you all your life. Car buying was one of them. In my life only one other time had I went out and purchased my own car. That was about 5 years ago, after countless issues with my used purchased car from a family member that left me on the side of the road yet again I was completely over it. I went down to the Ford dealership with nothing but a prayer and hope and walked out 3.5 interest, no money down, brand new Ford Fiesta with only 7 miles on it!! You couldnt tell me nothing! Fast forward present date, this car now has several recalls including door hatches that just stop working. Yep! I was driving in my neighborhood when the latch to the door my daughter was sitting next to gave way, releasing the door open WHILE I WAS DRIVING!!
You already know, I was over it once again and found myself looking for a new car. Now the catch is I was just about done with my current car payments and I thought a trade in was the way to go. This is where things get sticky. To my horror I learned I was pretty much upside down in my car. I later learned there are so many people who are in this same stupid situation. Lucky for my Big Little Bro came through with some CLUTCH advise that actually worked. So lean in close my friends time for me to drop these tips!
- Know the Figures: Its important and tedious to know all you can in regards to your trade in. Log into your account that you financed your car through and see what the payoff amount will be. Alot of times this number will remain the same for 5-10 days. Next go onto Kelly Blue Book https://www.kbb.com/ and check your cars value. Its important that you are honest with yourself and your cars condition because although the dealership you trade with may not notice or take off for dings/issues here and there its important that you have a realistic idea of your cars worth. Compare the estimate from the site with your payoff amount that you gathered above. If the value of the car is less than what you currently still owe you are considered to be “Upside Down” in your car, meaning you owe more than its worth.
For me this wasnt too bad, hurt my ego more than anything. I was devastated to find out that I was “Upside Down” roughly $1200, which although it isnt alot basically this meant I needed to consider that this $1200 amount would be thrown on top of the cost of the new car + I needed to talk them down from whatever the sticker price was.
2. Come Up With A Number: Now that you have the Figures from above you now have to think about how much you want to spend and for how long.
Knowing what I knew about the $1200 additional cost I would be bringing to the table + the fact I KNEW I wasnt trying to go over my current car note or be killed with interest, yet another #truthmoment. Just for example sake, in a perfect world the dealership would give me the full worth of my car + come down on their original ask + we all walk away happy 🙂
3. Research Cars: The moment we have all been waiting for! Time to get online and take a look at whats out there. There are TONS of cars/trucks/suv’s ect + if you are anything like me too many choices sends my anxiety threw the roof. Its important to go into a dealership already with an idea of what you want because its the sales persons job to get you out of there in a car and they can glamorize a shinny new snail if they needed to. Dont go in open to anything unless you got it like that lol but even then just as any other purchase this day and age there is too much technology not to be a informed consumer.
Remember we were on Kelly BlueBook right? Now that you have your list of cars you wouldn’t mind hitting your city in long term its time to back to that website to compare the cars. There is a great feature that allows you to compare up to 4 vehicles at a time. Plug in your cars and go through a process of elimination based on whats most important to you. In my list I started with 10 cars and by the time I gotten through all the comparing I was down to just 4.
Overall cost was the most important factor to me, followed by size, recalls and overall reviews. Once I had my 4 narrowed down I was able to search Kelly BlueBook to see what cars were within 100 miles of me that fit my needs. When searching for used cars its always a great idea to add “certified” to your search criteria. Certified used cars go through this additional level of inspection to ensure everything is up to standard. One owners, non smokers + none rental were all criteria I added because again, anxiety and I needed that list to come down. Plus if Im spending the money shouldnt I get exactly what I want verse settling for something I dont exactly want? For each of the cars I liked I was able to locate one that was relatively local to me and see their current pricing which I included on my spreadsheet notes. Because this would be my 1st time “haggling” I decided to go into it with the thoughts they would laugh at my attempts to get the price reduced and what the sticker said is what I had to work with. Another thing to consider are the number of miles a car has. Typically a person drives between 10k-12k miles per year so you want to keep that in mind as well as too, if your potential car has high mileage for future use and trade-in ability. For example a 2016 should roughly have 40K miles, 2017 should have 30K, 2018 should have 20k and so forth. If the mileage is way over those numbers then that contributes to decreasing the cars overall value.
4. Seek Out Financing: Something that I never considered is finding financing BEFORE you go to the dealership. Now it is true alot of dealerships will give you a rebate of some sort if you use their financing but dont be fooled. Thats typically $450 which isnt really a whole lot in the grand scheme of things. With alot of banks there is a loan called a “Check Ready Loan”, for the most part these types of loans have better interest rates than what a dealership will give you. The information requested from the banks can vary, from my research they all ask the amount you need, year, make, model you think the car will be, trade in value + number of months you want to pay back. From here they can give you an estimate of your monthly cost all from the comfort of your own home!
What I LOVED most about this is I had full control over how much I wanted to go in debt lol. Its almost like working of the cash system, you know start with $20 on Sunday to last the week and once its gone its gone. Me selecting exactly how much I needed basically capped me out at what I could get which actually played in my favor later. Now mind you, you can ask for the maximum if you want and spend less than what they give, I just didnt want that extra pressure of “oh, with just a few thousand more I can get a newer model” business.
Once you are approve by your bank basically they give you a “blank” check up to the amount you are approved for/asked for. That check is as good as cash, you can literally walk into any dealership and walk out with a car with that thing. Now this next part is the trickiest of tricks. This is the time to pull out your Poker face, Resting B**ch face, Dont F**k with me face. All of the next tips are at the dealership with people who could sell water to a fish, this is not a drill people. Do not go until you are ready to play some motherf*ckin’ ball.
Couple of things to keep in mind about dealerships:
- They have Demo/lender cars that they will sale for way less than the cars on lot.
- The Sticker Price can ALWAYS be negotiated
- When giving offers say OTD (out the door) most all dealership have additional fees they tack on like registration transfer, extra warranty ect. Your offer OTD means this is what Im paying including EVERYTHING. This is my ass heading out the door at this price.
My Experience
With all my research before hand, I basically was set up for success when I drove onto the lot. I already knew the car I wanted from Kelly BlueBook, I knew the cost, what I would offer, my blank check and how much my car was worth. Walked in with complete confidence and asked to test drive. Because I researched if I didn’t like this car during the test drive I had others in mind that I would try. My sticker price was a little less than $17000, so after the test drive I offered $16k OTD including my trade in. The look on the sales man’s face was priceless because he didnt expect me to go that route and he was fully prepared to woo me at a$17k + some since trade-in.
So the dance began, and the haggle process started. The counter to my $16k, was $20500 including trade in, which was a hit to my confidence immediately. I didnt fold though, I countered with $17500 including my trade-in looking the sales man straight in the face I stated either you can do this or not. IF not I would be happy to leave and re-evaluate my options. Another thing about dealerships is they dont want sure money walking out the door. Remember the sticker price is them trying to get the very most of the car they have for sale. They come into the ring swinging high so dont be afraid to swing lower to your comfort zone. What also helped is I knew by looking on Kelly that same car was over priced by at least $2k. At what felt like hours we came to an agreement and they accepted my counter offer including my trade-in and I was still under my blank check amount! I officially talked them down almost $3K plus had them take my old car that was worth a can of beans.