Comments on: Car Buying Mistakes

By: Tom

Tom — Mon, 24 Sep 2007 22:55:10 +0000

Super article. I will be using these guidelines when I go to buy my next vehicle!

By: Jeremy

Jeremy — Mon, 23 Jan 2006 05:58:09 +0000

I agree with most of the items, but I think a little differently on item 1. When we purchased our new car, I did all my research on the web and pinpointed exactly what I wanted. I then emailed our local dealers for price quotes and did most of my negotiations via email. By knowing exactly what I wanted, they were able to give me more accurate quotes. As a side benefit, I got all the unwanted things that were already in the car for free. In the end, I paid $5K under sticker (25%) and $1K under invoice (7%). It didn’t hurt that I bought the car on 12/31 – the end of the quarter and year for determining sales volume and the rate of “holdback”.

By: Peter Nichols

Peter Nichols — Mon, 23 Jan 2006 01:18:09 +0000

I totally agree with what you’re saying. I wish more people felt this way and took the time to express themselves. Keep up the great work.

Peter Nichols

By: gina

gina — Sun, 02 Oct 2005 17:29:27 +0000

i recently purchased an acura mdx for 1300.00 below invoice. i did all my leg work over the internet and phone. it worked out to be almost 2000.00 out the door, lower than sticker price.

By: nickel

nickel — Fri, 30 Sep 2005 01:06:35 +0000

John: I think that CarFax has a guarantee of some sort, but I’m not sure of the details. You may have some recourse through them for missing out on the damage. Then again, if it was never reported to an governmental agency, then they may not honor their guarantee. Major bummer about getting taken for a ride (no pun intended) like that, though.

By: John

John — Thu, 29 Sep 2005 16:09:34 +0000

Getting your car inspected by an independent party is so true. When looking for a Honda, I ended up buying a used one from a new Honda dealership (Crown Honda, formally Independence Honda in Charlotte, NC). They said it was a trade in. I asked if it had been in a wreck or been painted and they replied “no”. I got a car fax that came up clean.

Three weeks later I found signs of body and paint work and this was verified by other mechanics. Honda said I couldn’t prove I didn’t do the damage myself.

Get any used car checked out!

By: Boris

Boris — Thu, 29 Sep 2005 00:55:36 +0000

Eric: We bought our 2004 BMW at $1K over *invoice*.

By: Eric

Eric — Wed, 28 Sep 2005 22:21:37 +0000

Any suggestions on #3 when dealing with luxury brands such as BMW, Lexus, Audi, etc.? According to Edmunds True Market Value, it seems these rarely sell for less than a few hundred off sticker. What price should you start at when dealing with one of these dealerships?

By: nickel

nickel — Tue, 27 Sep 2005 03:58:29 +0000

Russ, not all makes take that sort of hit when you drive them off the lot. Yes, they all depreciate, but for some makes (Honda, Toyota) a late model used car is darn near the same price as a brand new one. In fact, we bought our 2004 Odyssey brand new for *less* than a used one (same model year) with ~10k miles on it was going for at CarMax. Granted, CarMax isn’t the most economical way to buy a used car. And yes, this was a weird hiccup in the market, and it’s definitely not the norm… But it does show how well these things hold their value.

By: Russ

Russ — Tue, 27 Sep 2005 03:37:50 +0000

It doesn’t matter how well you bargain with a new car dealer, the car will still lose 20% as soon as you driveoff the lot, and a total of around 40% within 2 years. Buying new is NEVER a bargain. Buy a good, used car, get it checked out by a reputable mechanic, and let the first owner take the bath on depreciation.

By: Andy

Andy — Mon, 26 Sep 2005 12:30:56 +0000

I bought a third party extended warranty to carry out until 100,000 miles, the company promptly went out of business about 6 months later.

By: Wayne M

Wayne M — Wed, 21 Sep 2005 14:45:13 +0000

More often that not when you buy a car you buy with your heart and not with your brain. All the same nice post…

By: nickel

nickel — Tue, 20 Sep 2005 20:30:54 +0000

Yeah, as I pointed out in my “Buying a Car” post, I’m not comfortable making an offer at all. I much prefer to get a feel for the marketplace and to find the bottom of the market by playing them off of each other. Admittedly, this probably stems (at least in part) from my fear that they might be thrilled at whatever amount I might offer. As you say, that’s a sure sign that you’ve offered too much.

By: FMF

FMF — Tue, 20 Sep 2005 20:20:21 +0000

I’ll add:

“Making your initial offer too high.”

I had a friend who made an offer to a dealership and they said “It’s a deal!” Sure sign that he offered them too much.

By: JLP

JLP — Tue, 20 Sep 2005 17:39:17 +0000

My local paper had an article recently warning people about buying cars that have been flooded. That’s definitely something to look out for, especially if you live close to the coast!

By: nickel

nickel — Tue, 20 Sep 2005 13:20:23 +0000

The bottom line with warranties is that they wouldn’t sell them (or they’d charge more) if they weren’t, on average, making a profit. We used to have a Dodge Grand Caravan and opted to buy the extended warranty shortly before the standard warranty expired because we had experienced a lot of problems. In that case, it paid for itself and more. One thing to note here is that you can (or at least used to be able to) buy the extended warranty up until the expiration of the standard warranty. And the price is highly negotiable. They claimed that there were extra fees for buying after the initial purchase, etc., etc. The initial price quoted to us was ~$2,000. After calling around to a variety of dealerships and asking the to beat each others prices, we had it down to about $1,200.

By: Financial Fruition

Financial Fruition — Tue, 20 Sep 2005 13:14:10 +0000

Very good stuff! I had heard most of them. The part about extended warranties was interesting (pulling the switch from the manufacturer’s to a third party warranty). Next time I buy a car I will seriously consider getting an extended warranty, as my left front wheel bearing went out right after the warranty and then 8 months later the right front went! All totaled up that was about $1400 of work that could have been under warranty and a deductible paid!

Yet, it’s pretty hard to build a model to evaluate whether to buy one or not. I think it’s more a matter of personal opinion. My dad brought me up to never buy a warranty, my best friend’s dad always bought warranties. After my story, my dad purchased an extended warranty on my mom’s new car (for some reason she has had bad luck with the last 3), which she’s already used to the value of the purchase price and she still has over half of the warranty period left.