Long Term Test F-150 Purchase Process: The Best Way To Buy a Car
By Kevin Gordon
I constantly find myself cringing when I am at a car dealership and I witness the following happen: Kenny “The Sap” Consumer walks into his local Honda dealership and is greeted by “slippery” Sam the salesman. Kenny says he is interested in a Honda Pilot, one “with the DVD system”. Sam the salesmen says that he thinks he might have one or two of those available, but immediately begins to explain how popular they are. Both people walk off to make a copy of Kenny’s license and Kenny the poor sap has taken his first steps towards paying thousands more than he needs to when purchasing a car.
I promise that I’m not joking about seeing this over an over again. I spend an inappropriate amount of time at new car dealerships getting looks at cars that I have not bumped into in press fleets. Time after time I see people who appear to have done zero research not only about the car that they are stopping by to see, but the price that they should be paying. I realize that if you are coming to our site you are better informed than your average bear, but you might not realize how many tools are available to ensure that you’re paying the absolute best price when you are making a purchase.
Here are the steps that we took to buy our truck – and the steps that you should be able to recreate with minimal effort. All of the steps should be relevant to anyone looking at buying a car. If you are interested in leasing, this might me a little less helpful, but the major concepts should still apply. The first step that we took was to know which car we wanted to buy. This can be the most difficult part for most auto buyers, so we were fortunate that we wanted to bring more details to the public on Ford’s new EcoBoost engine.
My recommendation here would be to use sites like this one and others to narrow down your potential choices and then start visiting dealerships. Drive everything you are interested in and let the sales person know that you only have a limited time to spend at the dealership so you do not end up in the trap of talking to sales management while trying to leave. Use the Internet to schedule test drives. Doing this has three major benefits. First, it will ensure that you are going to see the car or truck you are interested in driving. Second, unless the sales person is an idiot, the car should be ready and waiting. A lot of the time dealers will have secondary storage lots and scheduling your drive will ensure that the car you want to drive is ready and waiting. Third, by entering a form on the Internet, often times you deal with the Internet sales department instead of the normal vampires sales people who are waiting for Kenny The Sap to aimlessly wander onto the lot. In many cases the Internet sales department is a blessing. I have found them to be much lower pressure and more interested in moving units than in dealership profits. For example, more than once I’ve had an Internet sales manager throw me the keys to something and has let me drive solo. Most of the time at these dealerships you would have to suffer through a chaperoned test drive. At this point, I’ll assume that you now know which car you would like to purchase. Now the trick is how to get the best price.
By example, when we purchased the truck, I only drove it to make sure everything with this particular model was working as expected. I had already made up my mind about the specifics of the truck, and I knew that the dealer I was visiting had the truck I wanted in stock. The next step is to separate your purchasing trip from your research trip(s). Understand that this whole process can take some time, but if it has the opportunity to save you thousands of dollars, it seems like time well spent.
Here is the next trick. Attempt to negotiate the price completely online prior to stepping onto the dealer lot. These days there are a lot of ways to accomplish this, but I have always found that the sites that “bid” for your business work the best. My current favorite pricing site is TrueCar.com. On the site you can build the car you would like to buy and then see what dealers would be willing to sell you the car for. You are required to put in your information to figure out which dealers are offering which prices, but the site does tell you the distance from your home zip code to help determine if you’d be willing to travel that far to purchase a car.
Here is the other odd piece of the way the site works: a dealer will promise a price on a car that they do not have on their lot, this results in them not being able to match the price. This may seem a bit underhanded, but the TrueCar site does not seem to currently have the intelligence to check dealer inventory. Here is the trick: figure out which dealership is willing to sell their cars at the lowest price (when compared with their true cost). Then go onto the manufacturer’s or dealer’s website to check their inventory. If they have the exact car that you’d like to buy you can then put in a new form (built to that car’s specific specifications) on TrueCar and get a pricing certificate for the price that you’d like to pay.
Here is how that worked for us when we purchased the F-150 EcoBoost. It is important to note that the EcoBoost trucks have been selling well, and as a result are not just sitting on dealer lots with dealers quick to give them away. I talked to a few dealers who were not willing to move much on EcoBoost prices in particular. So the 2011 Ford F-150 FX4 EcoBoost that we purchased had a sticker price of $43,520. During the time that we purchased the truck there were a number of rebates and incentives, but I will ignore all of those to attempt to clarify this example. The invoice price of the truck was $39,868. One of those things that TrueCar will tell you is what the dealer holdback is and also what the dealer’s true costs are for things like ad fees and documentation.
The price that we paid for the truck was $38,843 which as you can see is over a $1,000 less than “invoice”. At the time we purchased the truck the average truck like it was selling for $42,188. Ultimately, the dealer made a little bit more than $200 selling us the truck. In other words, we did quite well on the price and we didn’t have to negotiate with a single human being for the price. Just fill out the form, walk into the dealership with your pricing certificate, confirm everything is good, and you’re on your way. To give you an idea, from the time I walked onto the lot to the time they were following me home with the truck (I was by myself and was not trading a car) was less than 3 hours. This includes going through all the paperwork, the financing, and dealer prepping the truck and I didn’t explicitly tell them that I would be buying the truck so they could prepare.
Here we come to another recommendation, buy cars outright and do not trade in another car. I realize that this is impractical to most people, but it is a shame. If more people would privately sell cars, it would change the way that the used car market functions, but that is another discussion for another time. If you are going to trade a car in the trick is to focus on the difference in the price of the two cars. Please do not ever get sucked into the trap of monthly cost. If we had been trading a car in on the truck, the negotiation would have gone something like the following. The dealer would have promised the price of the truck before arriving, I would have told them about the car I was planning to trade and confirmed that they were willing to give me a price for it assuming it met a certain condition criteria. Coming to the price of the car you are going to trade is the tricky part. You can use resources like Kelly Blue Book and NADA to get the expected price of your trade. These guides provide a solid starting point, but might not lead you to the price that a dealer is really willing to pay. The trick ultimately comes down to whether the dealer is going to try to keep your used car and sell it on their lot or if it is immediately going to go to auction.
For example, if you are going to trade a three year old Honda in good condition on a new Honda, then fight for pricing guide pricing or higher. If you are trading a car that the dealer tells you would need to go to auction and that logically makes sense, then you might be looking at a price that is a bit lower than these guide books show, depending on what is happening at auction. If you have a friend in your network that works at a car dealership sake them a favor and see if they can look up the pricing (I realize this is not an option for many people out there). Nevertheless, focus on the difference in price between the two cars and make up your mind about how far you are willing to move. Remember, the most powerful move you have is walking away. If the car you are looking to buy isn’t particularly rare you may find another dealer who is willing to do better on your used car. In the past I have actually had dealers immediately pass my trade-ins onto local used car lots because they were unique.
So there you have it, do your homework and you can find solid deals on new cars without needing to spend time waiting for Slippery Sam Salesman to go and “talk to his manager.” To give them a much deserved plug, we purchased the truck from Faulkner-Ciocca Ford in Quakertown, PA they did not doing anything special and did not know they were selling the truck to a blog until after the price was fully negotiated, but they were decent and honest. If you are in the area and would like to buy a Ford, I would recommend going to see them. I worked with Thomas Marcellus he was a decent guy and I would recommend him to a friend.