re: Updated v.3.16 - Will Cover's 2018 buying guide to purchasing a new vehicle

I said years ago I’d never buy a new vehicle again, but I’ve been rethinking it for my next one. My last two used vehicles have been great, very dependable. My thinking is that over 10 years I’ve had my current vehicle, I’ve averaged 7,500 miles a year. Conisdering most people put many more than that on vehicles per year, buying used for me is usually like buying a three year old vehicle with seven years of mileage. Does that make sense, or should I just stick to used anyway, given they’ve been good to me in the past/present?

quote:

---

v.3.16

---

quote:

---

5. Never negotiate off “MSRP.” The negotiation process should start from the DEALER COST (which is less than INVOICE) price or the WHOLESALE price if purchasing a USED vehicle.

---

How do you KNOW the difference when they put a piece of paper in front of your face? They have given me papers in the past that claim to be what the dealership paid or invoice and it’s usually not much lower than MSRP. I would assume the 2 would have a pretty dramatic difference in amount. No?

If I'm somewhat interested in a vehicle (used a couple years old) that's about $19k and I can pay up front. How much does that affect negotiating down the price?

quote:

---

I plan on paying cash for a gently used SUV this week. Any tips for that specific scenario?

---

It depends on the financing you can get. Check on that first and see if it’s worthwile to pay cash. Financing has been super cheap or 0% up until recently, so paying cash only makes sense if the benefit you get from it outweighs how much you could theoretically get if you instead invested it all in something conservative or an index fund over the life of the loan. The last car I got offered 0% financing, so it made no sense to pay cash. I invested that money and am earning a return while I pay it off.

Leasing in some circumstances doesn't seem like that bad of a deal Imho. If you wait on it you can make decent deals with 0 down on leases. If you are going to keep avehicle for 10 years then buying is better but if you are going to do 3-5 years and don't drive much a lease is a better deal. Sort of like a stay at home mom who just runs to the store and drives the kids around. You can get in a new car with warranty every few years but have a cheaper note.

For instance it looks like you can get a GMC terrain for $246 down and $246 a month lease right now. Thats not that bad imho if you did traditional financing the car would probably be upside down after 2 years anyway.

I agree with nearly everything you said. But the reality is pick your sales person. Find the guy who's hustling. The one who is working deals. And grind his day to a fricking halt.

As for warranty, they will easily pay for themselves if you buy them at the right price. Just explain from the start, you will buy warranty, but you will only pay 100 bucks over cost. The FI guy will have a bible. Printed. Tell him you buy it if he shows you cost price for the OEM warranty. If he shows you on a computer screen, he's lying

Financing, NEVER fill out a credit app at a dealer until you have negotiated a cash price and sit down with the FI guy. If your credit score will qualify you for the 0% rate, tell him he can send it to one and only one place. If your credit sucks (or at least wont get you 0%), walk in with a preapproved offer from a local credit union.

Lastly, what is your time worth to you? Is the day wasted worth $500 bucks more off?

And finally, you ignore the financing advice, please read your paperwork or at least understand what it means.

In a recent thread, 80% of respondents could not understand what a Conditional Delivery doc was.

quote:

---

Will, in your opinion, should folks aim for new over used simply due to low rates and high used prices?

---

Not necessarily. Rates, will vary from lender to lender and also from person to person based upon one's credit score.

I can say that I had a 40 + year old vehicle at one time and I had a rate of 1.89 % through Lightstream, unsecured.

quote:

---

7. Don’t discuss a trade-in until you’ve settled on a price for the vehicle you’re buying. Each transaction should be separate and are not dependent upon one another.

---

quote:

---

What’s the response if you’re explicitly asked? Seems like anything other than a hard no up front is a yes to them.

---

I actually haven't even thought of that. Right now, I am so focused and excited about the idea of purchasing a new vehicle and that's all I can really think about at this time.

Then flip or redirect the question to something else, such as, "Do you have the light gray / silver metallic color available in the Prius?"

quote:

---

For instance it looks like you can get a GMC terrain for $246 down and $246 a month lease right now. Thats not that bad imho if you did traditional financing the car would probably be upside down after 2 years anyway.

---

My fiancé got upside down on her car and it really made me rethink ever buying a car for her situation. I can’t because i put a lot of miles on my car but she traveling ~3 miles for work, gym, and basically everything else. I rather have the lower payment then deal with another upside down loan.

I lease heavy equipment for a living so it’s not like uneducated on the matter. I just see less value in owning cars as the years go.