While I REALLY like new cars, I’ve had to refrain from buying a new one for nearly 9 years until recently. One reason is because I couldn’t find a good replacement for my all-purpose Honda Ridgeline, but also because it’s hard to piece together the right ride at the right price without being gouged for things you don’t want or need. So I’ve put together some of my own lessons-learned from visiting a number of new car dealers:
Are these really options?
Automakers have begun to bundle a bunch of options together in packages like “Technology” or “Premium” or “Convenience”, but quite often, you only want 1 feature out of the list, but you’re stuck paying hundreds or thousands for the rest, right?
SiriusXM radio is a must for my next vehicle, even with options like Pandora and iTunes. But some vehicles require an entire Navigation system package just to get satellite radio! An option that really should be nearly standard on cars these days winds up costing me $1500-$3000 when a $150 nav unit, or even my own phone, will do the job just fine. Or what about having a large screen for interacting with the stereo and other information, but you don’t want the expensive navigation? Luckily some automakers, like VW, are fitting their cars with in-dash screens sans nav, but it hasn’t caught on quickly enough.
Another set of “options” comes from the dealer. Things like floor mats ($125), wheel locks ($80), and LoJack ($650+) come pre-installed for your convenience, and also marked up for the dealer’s convenience. I know the value in these items, but I also know I’d like to be able to choose them myself, not have to negotiate down the price or ask for their removal.
MSRP “Market Value Adjustment”
I thought that “Market Value Adjustment” prices were just for hot vehicles like the new Corvette or Dodge Challenger Hellcat models, but I was surprised when I also found dealer markups for hot sellers like Hondas and Toyotas. Seriously, who pays $1,000-2,000 over MSRP for a Honda? Heck, I vowed I would never even pay MSRP for a car, and I never have, but some schmuck is walking into a dealer and throwing their money away.
The lesson here is shop around and negotiate, but also know that if a dealer is willing to rip someone off just because they don’t know how to shop for a car, they’re willing to try to hide things in your deal too.
But what about that super cheap newspaper ad???
For those of you who peruse the local newspaper automotive section, you’ll often notice dealerships offering an insane deal on the exact model you want. But what happens when you show up to check it out? They’ll tell you it’s just been sold. That’s because quite often they only have one of those vehicles available, and it’s a stripped out model or something else is very wrong with it. But you would be surprised at how willing the salesman will be to show you a comparable model at a higher price than the advertised one, and it’s not “bait and switch” because they did actually have one for sale.
Basically, you’ll need to do some heavy research when buying a car to make sure you’re getting exactly what you want for a price you’re comfortable with, and make sure no other extra “features” are added without your knowledge. Remember, this is your 2nd most expensive purchase you’ll make (next to a house), and one you’ll need to live with for years. Be willing to walk away from a deal, because the only one losing out is the dealer, not you!
[Photo courtesy of Thomas Merton]