Buying a car isn't rocket science, and it shouldn't feel like it, either. New or used, the object is the same: get a car that meets your needs and desires for a price you can afford. At its core, it's really that simple, even though the process of researching cars, getting financing, and negotiating a price can seem complex. It's the more complex aspects of the process we have to thank for the many myths about buying cars that are out there, and it's those myths we're dispelling, one at a time.
Like most myths, there is a grain of truth to seeking your own financing for a better deal—particularly if your credit is less than stellar. But if you have good credit—or even if you don't—financing at the dealer can often make better sense than a private bank or credit union. Why? Because the dealership will often have access to a wider array of banks, potentially yielding much better interest rates from larger banks. Those 0% deals you've lusted after? You're not going to find those at the local bank, as a 0% loan makes them no money. So if you have a good credit score—anything over 700 is a possibility, but especially if you're in the 800-plus range—it's at least worth hearing what the dealership can do for you, even if you have your own financing deal in your back pocket--you may just end up knocking another point or two off what you already thought was a good deal.
The thought on this one goes something like this: because it's rainy (or snowy, or otherwise bad weather), the salespeople will be more eager to move a car, because fewer people are leaving the house to walk the wet dealer lot. Because of the widespread nature of this particular myth, the expected benefit—a vacant dealership aching for a sale—is actually canceled out by the crowds of people seeking it. Everyone thinks it's going to be empty, so everyone goes, and it's crowded.
Similar to the rainy day myth, the idea is that the sales staff will be desperate to get home, so they'll be more willing to meet you at a more favorable price. That's an entirely reasonable human assumption, but it's perfectly ordinary for a salesperson to work well past closing time to make a deal. Add to that the fact that you're keeping them from their dinner and their families, and you may actually end up with a salesperson that's ticked off and less willing to work with you.
If you're a bit tight on cash, it makes sense to keep an eye not just on the bottom line, but on what you can actually afford each month. But at the same time, it's important to realize that just because a $250 per month payment for 5 years is $50 per month more than a $200 per month payment for 7 years, you may actually end up paying more money. How? Because of interest. Worse still, because most loans are front-loaded on interest payments, it's easier to end up "upside down" (owing more on the car than it's worth) with longer-term loans—and it doesn't matter if you're buying new or used. The bottom line: be sure you know how much that lower monthly payment is costing you in the long run.
The myth: if you don't tell the dealership you're trading in your car, you can negotiate a better deal, because they won't be tempted to give you a good price on the new car while shaving the same margin off your trade-in. While that may sometimes be true, hiding your trade-in until the end (a practice so common it's referred to as "parachuting the trade" by salespeople) can often just serve to complicate the deal, making you and the dealership retrace your steps on certain parts of the bargain you've made. It can also extend the time necessary to make the sale, because the dealership now has to inspect and value the car--a process that could have been happening in the background during the negotiation process.
Just like parachuting the trade, not letting the salesperson know you're leasing until the last minute can seem like a good to get a slightly better deal, but it can just end up frustrating the process—and the dealership's employees. Better to be up-front about it and just drive a hard, honest bargain. You wouldn't want the dealership hiding key facts about the deal from you, would you?
High-pressure sales techniques have mostly gone away in modern car sales--people just don't respond well to them anymore—but the psychology of the sale can still get under peoples' skins, and cause them to pull the trigger on a car purchase just because they're afraid of missing out on a "killer deal." While that's entirely human, it's an extremely rare event that any sale by a dealership, whether on new, certified pre-owned, or regular used cars, will truly be a once-in-a-lifetime event. More often they're monthly, quarterly, or annual, and you'll find the same deals during each sale. Don't bow to the hype--do your research, know a good price when you see one, and buy right—regardless of the sale.
There's a perception that because dealerships typically have quite a bit of paperwork to complete during a sale that buying from a private party (say, your Uncle Ned) is equally complex—so much so that you're better off just relying on the dealership to get it all right for you. That couldn't be further from the truth. In fact, private party sales of cars often come with considerably less paperwork, sometimes requiring just a bill of sale, title transfer, and in some states, an application for a new title to be issued in your name. It's really that easy—just be sure to follow our advice on inspections by reputable (preferably certified) mechanics, and definitely make use of our Ultimate Test Drive Checklist. Or, to make your private party buying experience even easier, get on Instamotor and let us do most of the legwork for you!
A lot of people think it's just too risky buying a car from a private party--what if it turns out the car isn't what it purported to be? What if it breaks down tomorrow? Those are fair questions, and ones you should clear up before buying any car, through use of inspections and vehicle background checks. It's true, buying from a private party won't get you an included warranty, as may be available from a dealership. But if you've done your due diligence to make sure the car you're buying is a solid, reliable example of its kind, then the warranty problem becomes more about your ability to pay for the usual maintenance items, as well as any repairs that become necessary, and less of a scary unknown that could surprise you with catastrophic mechanic's bills.
The idea that presenting yourself as someone who's a bit strapped for cash might get you a better deal sounds like common sense at first, but it doesn't pass the sniff test. If you're serious about buying a car with anything but cash, the dealership will run your credit, and you'll probably tell them how much money you make in a year. It won't matter if you're wearing garbage bags or Gucci—they'll know who they're dealing with.
While life is full of difficult and stressful situations, and car buying can certainly be one of them, it doesn't have to be. If you arm yourself with the right information, seek out the right help (from mechanics, salespeople, apps, or friends), and stick to your budget, there's no reason you can't find the right car for you quickly, easily, and affordably. That's the whole point of Instamotor, after all, so grab the app and see if your next car isn't right there in your pocket (or purse)!
automotive freelance journalist