Car buying is a confusing, high-pressure decision. This is an important financial decision, and if it is your year to buy a car there are some things you need to know. Don’t get stuck paying for a car you barely like for the next 72 months.

I want you to have a positive car buying experience so let’s talk about what you need to consider.

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For most car models, design updates are released in the fall, or around October or November.  This means that the dealer is ready to get rid of last year’s models. Wait until the end of the calendar year and buy a model from that same year, you will get the best deal.

Also, ask the dealer for any demo cars they may have for sale.  These cars have low mileage and have never been titled so technically they are still new.  These will have large discounts that go above and beyond the manufacturer rebates. If you are can’t wait until the end of the year to purchase, then wait until the last weekend of the month.  The dealer has to pay a fee for every car that remains on the lot every 30 or 60 days, and they are willing to give more of a discount at month-end on cars that have already been on the lot for a long time.

Never wait until you need a car to buy one.  Taking the time to plan and purchase BEFORE you need a car plays a huge part in getting the best deal. Desperate decisions don’t end well. Be rational for this important buy.


Before making any large purchase, learn as much as possible about what you are buying. Take the time and figure out exactly which car you want.  The make, model, color, trim and anything else unique to the car. Instead of going to multiple sites for this, head to where you can find all the cars in one place. Whether it’s for the current year model or prior models, you can find all the information there.

Locate your car at multiple dealers in the area and see which dealer has the best prices.  You will want to find multiple cars at that dealer that you like. In my experience, popular cars will sell out before you have the opportunity to get to the dealer.  Have a couple of backup dealers and cars in mind before you start the buying process.


Where you buy your car plays a big role in getting the best deal.  You should choose a dealer that is fair and reputable.  The differences between dealers are more important when you are shopping for a used car. There is no way to easily compare prices on used cars because they are all different.  You should try to buy used cars from new car dealers or from large chains, like CarMax.

Purchasing cars from independent “We Finance” dealers, aka, “Tote the Note” dealers can be a bad experience. These dealers are not able to give you the best deal because they bear all of the risks associated with the car deal.  They own the inventory and they’re responsible for the financing and servicing of car loans.

New car dealers can usually make a decent profit because of volume, but independent dealers have to make up the profit elsewhere. You will have to pay a much higher rate of interest when you buy from these dealerships.  The prices are also much higher than you would pay for a similar car at a bigger dealer. They target buyers who do not have established credit and have trouble getting financing.

Another reason “We Finance” options are not ideal is they do not always report your payments to the credit bureaus.  People with limited or bad credit who buy cars from these vendors will continue to have limited or bad credit. It’s important to have your car loans reported to the credit bureaus to help you build or rebuild your credit.

If you feel like you do not have sufficient credit for traditional finance options, think again.  There are options for subprime lending through reputable dealerships and the interest rates will not be predatory.


You probably know that negotiation is a large part of car buying.  However, if you execute the first two steps in this post successfully, this step will be easier.  If you have a trade-in, there may be a little negotiating, but dealers do not usually budge from their initial quote.

The common advice is to check Kelly Blue Book for what your trade is worth.  Not true.  Every time I have traded in a car, the dealer uses their wholesale guide to price the trade. My trade-in quotes have consistently been 10-20% lower than the most conservative KBB estimate.  Be prepared to be disappointed.  Do not rely on your trade to help you afford the car you want unless the trade is paid off.

The most important rule of car negotiation is not to tell the salesperson what you want your car payment to be.  If you tell them $500, they will make it $499, even if it could have been $450.

The dealer’s responsibility is to give you the best price on the new car and a fair price on the trade in.  The payment amount will work itself out based on the interest rate that you qualify for and the term.

While you are going back and forth with the salesperson on price, pay attention to all of the numbers being presented.  I cannot tell you how many times I have asked the dealer to discount the price of the car, and they just increase another number to make up for the discount.

Car dealers do not have the best reputation regarding transparency and honesty, so it is important to pay attention.

To summarize…

  • The timing of your purchase makes a big difference.
  • Do your research.
  • Choose your dealer wisely.
  • Be ready to negotiate.

Did you try these tips? How did your experience turn out? Let us know in the comments below.

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