Buying new car help

[Double3]

That being said, my wife and I own two vehicles and both are paid off. I have zero intention on buying another vehicle for a decade or more and if I did it won't be new. I'm going to be salmon here and swim up stream by suggesting you not buy a new vehicle. Instead, pay off all of your bills including your mortgage and then fund that retirement until it's in the millions. At that point you can do just about anything you want but until then taking the depreciation you take on a new vehicle doesn't make a lot of sense IMHO. Buying a $30k vehicle then financing it ends up costing you over $40k for the same vehicle. Even if you can pay cash that's still $30k you can put into investments and buy something that costs 1/10th as much that will serve you just fine.

I know that's not the popular stance in America these days but I wish someone had given me the same advice in my 20's. Things would be MUCH different today that's for sure.

Trust me I did not want to buy a car let alone a new one. In all reality it was unnecessary cause the Altima and Tahoe are just fine but she wanted a different car to start off her new job. We have not had a car payment in several years, sent her through school with no loans, and we are very frugal.

She has worked really hard and is going to be making a significant amount more so sometimes you just have to make them happy.

[pinzgauer]

Most mfgs now you can see the actual sticker for the specific vehicle online. Also usually have an options list. Due to who I work for we get X below invoice for many mfgs. I start with invoice +destination, minus any published rebates or discounts, add tax and any legit fees. I'll concede $100 for title/tag.

That becomes my walkaway. Usually drop $500 below that as a starting offer drive out. Plan on coming up to my walkaway price for that vehicle.

Always start with a vehicle you know they have in stock that has all the options you want and you can live with. No tire kicking at that dealer prior.

I do not pay any dealer prep, $600 processing fees, Etc. Dealers nearly always have additional specials that gets them profit beyond the published specials.

Before I walk in the dealer I find the specific car on the lot if possible and give it a once-over. Often times there's multiple cars with similar options that I would accept, so I check them out as well.

I normally have a three-by-five card in my pocket with the VIN numbers and walk away price for any that I'm considering. If I'm financing I also go ahead and calculate the payment/terms that I want.

I've done this multiple times, twice within the last 4 years. Shortest negotiation to handshake was 5 minutes from when I walked in the dealership. Went straight to the manager, told him the deal I was prepared to make on a specific vehicle. He looked at it on his screen held his hand out and we shook.

It helps to have many dealers locally, and I play them against each other. Told them I was about to buy one at XYZ dealer, but thought I'd check with you first cuz they were closer.

If the dealer won't play, I move on. After a couple of attempts to upsell and I stick tight, usually they shift a business mode. Every now and then I have to tell them that I will be leaving in 5 minutes... they can decide if they want to sell the car or not. I've had them chase me down in the parking lot and put their hand on my door handle to stop me, tell me they will take the deal.

Did another deal by emailing a picture of 5 $100 bills and the monthly lease payment /annual miles & term to the internet salesman. He edited the picture with another number and emailed it back, which I took. (We leased Nissan Leafs due to tax treatments and special cases on the electric vehicles.).

Especially with the foreign manufacturers there is very little variation on what's in the standard option packages and what's not. You can determine that via the manufacturer sites, brochures, and even Edmonds is pretty accurate. Any nonstandard options are listed on the sticker and invoice.

Starting below invoice is a huge help, many companies have this as an employee benefit. Just blows through a lot of the noise. Sometimes they try to make it up on the back backend (dealer prep fees, $800 title processing, etc) and I just tell them I'm not going to pay it. Focus on the drive out price.

You can also get close to invoice through Sam's or Costco, Etc.

There is no reason to play dealer sales games anymore

[Jer]

Trust me I did not want to buy a car let alone a new one. In all reality it was unnecessary cause the Altima and Tahoe are just fine but she wanted a different car to start off her new job. We have not had a car payment in several years, sent her through school with no loans, and we are very frugal.

She has worked really hard and is going to be making a significant amount more so sometimes you just have to make them happy.

It's times like this that I'm thankful my wife doesn't think this way as I realize that she's unique.

Most mfgs now you can see the actual sticker for the specific vehicle online. Also usually have an options list. Due to who I work for we get X below invoice for many mfgs. I start with invoice +destination, minus any published rebates or discounts, add tax and any legit fees. I'll concede $100 for title/tag.

That becomes my walkaway. Usually drop $500 below that as a starting offer drive out. Plan on coming up to my walkaway price for that vehicle.

Always start with a vehicle you know they have in stock that has all the options you want and you can live with. No tire kicking at that dealer prior.

I do not pay any dealer prep, $600 processing fees, Etc. Dealers nearly always have additional specials that gets them profit beyond the published specials.

Before I walk in the dealer I find the specific car on the lot if possible and give it a once-over. Often times there's multiple cars with similar options that I would accept, so I check them out as well.

I normally have a three-by-five card in my pocket with the VIN numbers and walk away price for any that I'm considering. If I'm financing I also go ahead and calculate the payment/terms that I want.

I've done this multiple times, twice within the last 4 years. Shortest negotiation to handshake was 5 minutes from when I walked in the dealership. Went straight to the manager, told him the deal I was prepared to make on a specific vehicle. He looked at it on his screen held his hand out and we shook.

It helps to have many dealers locally, and I play them against each other. Told them I was about to buy one at XYZ dealer, but thought I'd check with you first cuz they were closer.

If the dealer won't play, I move on. After a couple of attempts to upsell and I stick tight, usually they shift a business mode. Every now and then I have to tell them that I will be leaving in 5 minutes... they can decide if they want to sell the car or not. I've had them chase me down in the parking lot and put their hand on my door handle to stop me, tell me they will take the deal.

Did another deal by emailing a picture of 5 $100 bills and the monthly lease payment /annual miles & term to the internet salesman. He edited the picture with another number and emailed it back, which I took. (We leased Nissan Leafs due to tax treatments and special cases on the electric vehicles.).

Especially with the foreign manufacturers there is very little variation on what's in the standard option packages and what's not. You can determine that via the manufacturer sites, brochures, and even Edmonds is pretty accurate. Any nonstandard options are listed on the sticker and invoice.

Starting below invoice is a huge help, many companies have this as an employee benefit. Just blows through a lot of the noise. Sometimes they try to make it up on the back backend (dealer prep fees, $800 title processing, etc) and I just tell them I'm not going to pay it. Focus on the drive out price.

You can also get close to invoice through Sam's or Costco, Etc.

There is no reason to play dealer sales games anymore

That's not what the 'Back end' means. Back ending a deal is what they make on 'selling' the loan to a bank at a lower rate than you sign for. In other words, say they tell you that your interest rate is 7.5% and your term is 60mos long. You sign and there's your payment and you're on your way down the road with your new vehicle. Meanwhile, the dealership shotguns your loan to a couple of dozen banks who bid to buy the note at a lower rate. If they 'sell' it at 6.5% they just made 1% on your loan which can easily translate to thousands of dollars depending on the purchase price and length of the loan. That's what back end means. The dealer prep or title processing isn't back end because they spell it out for you in advance and you agree to those fees. No back end there at all. The real money is made in ways you have no idea like negotiating loan terms, manufacturer incentives, dealer hold back, etc.

The best deal you can get on a vehicle is to find out cost, hold back, invoice, manufacturer incentives, promotions, dealer cash, etc and then negotiate the purchase price w/o any discussion of monthly payment as that's their ultimate goal: working a basic four-square grid. If they can convince you that the monthly payment is the important part since that's your budget they've won. They can then manipulate the length of the loan and interest rate to make as much money as they want all while bumping you thousands with little statements like "What's $20 per month" when you've already said you're all in. Once you get to the total price of the vehicle and then pay with cash once you're "in the box" that's the best deal you can get on a vehicle.

That being said, the depreciation you take on a new vehicle is absurd. There's a reason millionaire's don't drive new vehicles. The loss you take is insane and most people who take it have no business taking that sort of loss to impress the Jones's.

Buy a nice, reliable used car and drive that thing into the ground. Pay cash and then focus on your other debt. Once your debt is paid off put that same monthly amount into investments. Once you have millions socked away you can then pay cash for any car you want but by then you will likely find that you're just as happy if you drive a $5k car or a $50k car and you will be truly happy in life because you won't assign your happiness to what vehicle you drive.

Again, I know nothing I've said is the popular opinion but that's also why our nation is in such trouble financially.

[pinzgauer]

That's not what the 'Back end' means. Back ending a deal is what they make on 'selling' the loan to a bank at a lower rate than you sign for. In other words, say they tell you that your interest rate is 7.5% and your term is 60mos long. You sign and there's your payment and you're on your way down the road with your new vehicle. Meanwhile, the dealership shotguns your loan to a couple of dozen banks who bid to buy the note at a lower rate. If they 'sell' it at 6.5% they just made 1% on your loan which can easily translate to thousands of dollars depending on the purchase price and length of the loan. That's what back end means.

Understood the term may have specific meaning to car dealerships, but I was more generically referring to all the charges and dealer profit items that show up other than the invoice price and publicly visible discounts on the vehicle that result in what most people think of as their "price".

Low-balling your trade, junk dealer fees, Etc. Or bad financing terms as you pointed out.

The dealer prep or title processing isn't back end because they spell it out for you in advance and you agree to those fees. No back end there at all.

Except most dealers don't, most buyers do not see that until the purchase agreement is presented. It's outside of the price, and often a source of additional dealer profit.

The real money is made in ways you have no idea like negotiating loan terms, manufacturer incentives, dealer hold back, etc.

I used to try to get into holdback, etc. Published incentives & promotions I factor in.

I successfully got one dealer to honor the manufacturer's rebate and get extremely close to the incentive financing rate from the manufacturer where it would normally be one or the other. As you mentioned, they have other financing sources available to them, especially if you have excellent credit.

But there are nearly always special hidden Dealer incentives from the manufacturers and that's where I let them make their profit.

then negotiate the purchase price w/o any discussion of monthly payment as that's their ultimate goal: working a basic four-square grid.

Very true, including trade if one is involved. If I do choose to finance I do so only after my drive out price is met. And I nearly always have financing available, only work through the dealer if they have incentive manufacturer financing or similar if it's to my advantage.

One recent exception was the electric car market which is 90% leased, with incentive rates through NMAC. The lease terms were identical with Miles and duration being the main variables. You never put down more than the minimum required, which was the first month's payment. So nearly all the negotiation was done based on terms and monthly payment, which had a price behind it. Not normal TVM financing, special lease calculation,

BTW, The depreciation hit doesn't apply to every vehicle type, there are exceptions.

Diesel 4x4 trucks are a prime example. I've successfully bought new ones using the techniques I described above for less than what 30-35000 Mile used ones were available for.

Certain Japanese cars are that way as well.

Mainstream cars, two wheel drive trucks, and anything that has a lease or commercial Fleet, have especially bad depreciation. As do most luxury cars outside of Porsche's, AMG Mercedes, etcetera

Sent from my XT1585 using Tapatalk

[Bulletdog]

...so sometimes you just have to make them happy.

I shed one of Jer's man tears when I think of how much money I've let go over the years in pursuit of "making her happy". I'd would literally be a millionaire right now if it wasn't for getting married and having a kid. Would have been a different life for sure…

Congrats on the new car. I hope it brings a smile to her face.

[HMM]

I shed one of Jer's man tears when I think of how much money I've let go over the years in pursuit of "making her happy". I'd would literally be a millionaire right now if it wasn't for getting married and having a kid. Would have been a different life for sure…

Congrats on the new car. I hope it brings a smile to her face.

Statistically a married man has a better financial position than a single man. That's probably because he's been told NO a few times tho...lol

Always good to be on the same page with the spouse when it comes to money. I'm blessed there, we did the whole crown financial thing and then read the Dave Ramsey books too. My wife has been on board since the beginning, we've splurged here and there but for the most part we have towed the line to be able to live like no one else later on in life.

[NYH1]

Statistically a married man has a better financial position than a single man. That's probably because he's been told NO a few times tho...lol

Always good to be on the same page with the spouse when it comes to money. I'm blessed there, we did the whole crown financial thing and then read the Dave Ramsey books too. My wife has been on board since the beginning, we've splurged here and there but for the most part we have towed the line to be able to live like no one else later on in life.

I'm only a few years older then you, we could've went to the same high school (different grades of course). My wife and I are fortunate to be debt free, owning everything we have (house, vehicles ect.).

It's nice to be responsible and put away for the future. My wife is a nurse. She has over 20 years working in geriatrics. Spend time with those type of patients and they'll be the first to tell you that the "golden years" aren't always so golden or that a lot of people don't make it to their golden years.

I worked at a plant that paid great, had great benefits, 30 years and full pension. Most of us could max out our 401K's. I know a lot of great men and women that got close but never got to collect a penny of their pensions or 401K. And it sucked to see that.

Point is, be smart and responsible, but enjoy life while you can, know what I mean!

Double3, congrats on the new ride!

Health to all, NYH1.

[Averageman]

Statistically a married man has a better financial position than a single man. That's probably because he's been told NO a few times tho..

This has not been my personal experience actually it has been quite the opposite.
I'm pretty sure that I'm not the only one with such experiences.
My Ex raced to empty the bank accounts, then raced to the mall with our credit cards. When 30K was gone from the Bank and I was 20K in debt to her use of the credit cards, I was at a financial and personal low point.
I took care of my business and lived in the back of my truck for a couple of weeks. New bank accounts, studio apartment, used furniture and I juggled credit cards for a year until I was out of debt.
She walked away with everything in the house, a new Jeep Wrangler and a lot of cash and cool new "stuff".
I now keep my finances separate from my relationships.

[Double3]

Statistically a married man has a better financial position than a single man. That's probably because he's been told NO a few times tho...lol

Always good to be on the same page with the spouse when it comes to money. I'm blessed there, we did the whole crown financial thing and then read the Dave Ramsey books too. My wife has been on board since the beginning, we've splurged here and there but for the most part we have towed the line to be able to live like no one else later on in life.

We are on the same page 99% of the time.

Purchasing a car right now we were not necessarily but I get it even if I think it is stupid.

I'll just continue to drive the 14 year old Altima into the ground and if it is still good to go in 9 years my son can drive it! Might be possible since I drive a mile to work.

[nimdabew]

Great advice. I haven't had a car payment in over 10 years and I'm only 38. Paid cash for my last 3 and sadly one was a new car for the wife. I worked out of town then so I bit the bullet and bought her one that I didn't have to worry about. I'm looking to be totally debt free at 40, can't wait!

The only advice I would say against paying a car up front like this is if you can get a super low interest rate for it, ie 1.9% or less. Your opportunity cost for the car is much lower if you took the same cash, get the good financing, and use that original money to invest now and then use cheap money later to pay off the car. I have a 0% and the first dollar paid for the car is worth about $1.40 after compound interest compared to the last dollar after 72 months. Just keep enough cash on hand to pay off the loan in it's entirety the entire time so you don't get caught in chasing loan payments with your salary and you will be fine.