Car Negotiation Coach

I recently wrote a post about avoiding car buying mistakes that covered the whole car buying experience including research, test-driving and car insurance.

Now I’d like to get a little more specific and point out critical missteps that will cost you money while negotiating a car.

1. Not realizing everything is negotiable! Beside the price of your new car, every aspect of a car deal can be negotiated.  This includes the value of your trade-in, your financing, dealer add-ons, and more.  Don’t assume any numbers the salesman provides are final.
2. Negotiating a car at the dealership.  If you negotiate at the dealership you will be subjected to all the car salesman’s tactics and ploys.  These guys negotiate every day of the week, do you?  If you negotiate via email, you’ll instantly counteract a majority of their high-pressure sales tactics.  They won’t be able to show you pictures of their 8 hungry children or use the good cop/bad cop routine.  Besides that, at the dealership you’re limited to a single offer which leads us to… 
3. Talking with only one dealership.   A car is a commodity and you get the best price on commodities when sellers compete.  Negotiating with multiple dealers is the key to finding the best car price.  After you get price quotes from several dealers, go back to each one and ask them if they can beat your best price.  If you only talk with one dealership, who do they have to compete against? 
4. Getting too many quotes.  When you request car prices from multiple car dealers, it’s important to keep the process manageable.  If you get 30 separate quotes from dealers across your state, it’s just too hard to keep track and manage responses.  8-10 quotes is about the most a normal person can handle.  At same time, make sure you get a minimum of 4 quotes to keep the bidding process competitive.  
5. Letting the salesman know your target price. There are several methods you can use to establish a target car price, but never, ever mention your target price to a dealer. This number is strictly a point of reference for you, to be used to create a simple budget or when to consider making the deal. If you mention a number to the dealer, he’ll never go below that number.  This is negotiating 101.  Why would you voluntarily set a floor for yourself? [CONTINUE READING]

You’ve probably been driving for years and picked up good financial habits along the way.  But while some finanical ideas are second nature to you (like why incorporate in Delaware), a teenager probably needs some guidance to avoid expensive mistakes.  Why not take a fresh look at your financial habits and see if you can remember some lessons learned to share with your teenager?  Here are a few nuggets of wisdom to get you started:

1. Good credit is soooooo important.  Establish good credit practices early and save yourself thousands of dollars over the course of your life (or even in a single car purchase).  Credit affects how good a car loan you can get, whether you can get one at all, and your insurance premiums.
2. Reckless driving affects your wallet.  Aside from the obvious result (getting hurt or hurting others) accidents can be costly in a variety of ways.  If you are at fault, then…
   1. You have to pay the deductible on your insurance (usually $500 to $1000)
   2. Your insurance premiums will probably go up (easily hundreds or thousands per year)
   3. You could get a hefty ticket or fine
   4. You could be laid up and unable to go to work
   5. You could be sued
3. If you’re in a minor accident, consider fixing it without reporting it to your insurance company.  Depending on the amount of your deductible it may be cheaper and your rates won’t skyrocket.
4. Don’t drive without insurance! Penalties include suspension or loss of license, tickets or fines, and being personally liable for an accident.
5. Good grades or a driving class could lower your insurance premiums.  Some insurers will reduce your premiums based off of driver’s ed classes or defensive driving courses.  Some also offer reduced rates to students with B+ or higher grade averages.  It pays to be smart!
6. New cars appreciate fast.  The second you drive off the lot, the car depreciates 20%. Consider buying used if it’s your first car…you’ll most likely give the car a beating anyway.
7. Don’t owe more than the car is worth.  Do everything in your power to keep from getting upside down in a loan.  It will make your next car purchase that much more difficult.  When budgeting for a new or used car, make sure you pay a sizable down payment to help avoid this scenario.
8. Take care of your car.  Be religious about oil changes, replacing tires and brakes, and other regular maintenance.   Letting your car go can cost so much more in repairs, not to mention lowering the resale value.
9. Learn how to change a tire (especially if you’re a woman).  You never know when you’re going to get stranded and out of cell service.  Even if you can reach help, towing is not cheap.  Just in case, give your kid a free cell phone so they can call you if they run into trouble.
10. Don’t drink and drive.  This could literally ruin lives.  And if prosecuted, you’ll find legal fees and fines incredibly expensive, not to mention the possibility of jail time.  Consider offering a “no questions asked” option to your teen if they find themselves under the influence with no way home.  Let them call you for a safe ride rather than risking the drive themselves.

 Do you have any other suggestions for new drivers?

Photo by alxbal

If you’re like me, with every new car purchase you add to a cumbersome collection of financial documents.  When it comes time to find something, it can be intimidating to sift through the mess.  The best solution is to use a filing system and stick to it whenever you get new paperwork rather than letting it pile up.   If you’re ready to clean up the clutter, take a look at how I organize my own car financial documents and see if you can implement a similar system that works for you.

In my home office I keep three separate folders for each car: Maintenance, Ownership, and Legal.  For the most part, I hang onto everything until I get rid of a car with the exception of expired insurance policies.  Here’s the breakdown:

 Car Maintenance Documents

• Documentation of all auto maintenance performed. This includes oil changes, tire purchases, replacing the brakes, service appointments, etc.  This can be handy to establish a good resale value when trading in.
• Warranty agreements.  Hang onto any documents from the manufacturer or if you purchase an extended warranty.  Most warranties are very particular about how you go about servicing your car, so you’ll need to refer to your agreement.

 Car Ownership Documents

• Title. If you have a safe keep it there instead, otherwise filing it is fine.
• Original purchase receipt. Trash all the extraneous brochures and flyers you receive from the dealer.
• Loan or lease documents and payment book (or payment coupons).  Keep these until the loan is paid off and then keep the letter from your lender that confirms the loan has been fulfilled.
• Monroney sticker (or window sticker) that contains all the options installed on your car.  I like to keep this handy for when I resell or trade-in the car.  It’s easy to forget all the bells and whistles you originally paid for, and a high MSRP compared to your new price can make the next buyer feel like they are getting a good deal.

 Car Legal Documents

• Registration. I file one copy and keep one in the car.
• Receipts for state inspections and emissions tests
• Tax documents. Some states require personal property taxes to be filed for vehicles.
• Auto insurance policy. You only need to keep the latest copy.  When you get a new one, discard the old one.
• Documentation of any repairs due to insurance claims (normal wear and tear goes under maintenance).
• Rental cars agreements during repairs.

 And in my car I keep…

• Registration. I keep one copy in the car and one in my files.
• Insurance Card
• Owner’s Manual
• Disposable camera (unless your cell phone has a camera).  If you’re in an accident, taking pictures can help you get more money from a claim and identify who was to blame.

When budgeting for a new car, an organized set of finanical documents can be a real budget helper.  How do you store your car financial documents?

Photo by mcfarlandmo

Here are a few interesting posts I’ve bumped into crusin’ the web this week.

• Eliminate the Muda has an excellent series on negotiation called Combat the Closing Techniques.  Read the whole series if you get a chance, it’s follows the guest post: Marketing or Manipulation featured on Financial Samurai.
• The Simple Life in France has some tips about how to choose a new car.  You’ll also learn that the French have completly different cars than us, who knew?  Kangoos and Twingos sounds like tasty snacks don’t they?
• PF Firewall talks about avoiding a traffic ticket by wetting yourself and throwing your keys out the window. *
• Single Guy Money explains how to get out of an upside down car loan.
• ptMoney presents Cheap Car Insurance: Women have the advantage.

*actually he says not to do that.

Hi everyone, I’m officially joining the Yakezie Alexa Ranking Challenge.  My current rank is 2,654,687 and the goal is to break 200,000.  Hopefully with some quality content and some support from other members it won’t take too long!

Budgeting in the Fun Stuff was kind enough to have us guest post today on negotiating car financing.  Most people don’t even realize that car financing is negotiable!

It’s tax time again, and while you’re digging through your financials, it’s a great time to check in on your auto financial health. 

Here’s an auto finance self-checkup you need to perform at least once a year. 

Can you lower your car insurance rate? 

• Check with your agent and see if all possible discounts have been applied.  Do you have a home or renter’s insurance policy with the same agency (to qualify for a multi-policy discount)? Have you installed a car alarm or lojack, took a defensive driving class, or has it been three years since your last accident?
• How many miles did you drive this year?  Were you laid off, do you carpool, or work from home and use the car only for “personal use”?  Less miles typically means a lower rate.
• Can you save any money by raising your deductibles or dropping collision on an older car? 
• Have you shopped around for competitive quotes recently?  Insurance.com and Esurance are good for competitive quotes from multiple agencies.
• Are you paying your premium in installments with extra service fees?  If you can swing it, consider paying annually or semi-annually to avoid those fees.

What’s the interest rate on your car loan?

If it’s high, consider refinancing.  Check out rates on a site like up2drive and see if refinancing makes sense. [CONTINUE READING]

Car manufacturers and dealers purposely hide their cost structure from the general public.  Their intent is to make it difficult for average folks to evaluate a car purchase.  The car industry makes more money if you can’t determine what is a fair deal.

To help shed some light on the subject, here is a car terms glossary that breaks down common car terms and how they should be interpreted.

Glossary of Car Price Terms

While it’s useful to understand all of these car terms, do not get hung up on specific fees and rebates.   It can be a hassle researching and in the end you’re only playing into the dealer’s shell game.  They shift around fees and rebates into different categories to try to confuse you.    When you negotiate a car price over email, you will ask the dealer to give you a total price that beats their competitors.  In the end, they can shift around fees and incentives all they want, but you only need to be concerned with the bottom line and getting it as low as possible.

Photo by Johnath