Buying a new car should be fun -- but it’s not! The fact is that most people rank buying a car well below a trip to the dentist. Getting a good deal on a car is a challenge, and dropping thousands of extra dollars should be reason for meeting the challenge. One alternative, if you don’t want to go through the steps listed below, is to buy a Saturn (the price is set -- no negotiating ) or use the Auto Connection to get the information you need to get a super deal. BUT... if you are determined to do this yourself --- then read on...

Obviously a motor vehicle represents a substantial investment for most people, so it only makes sense to do your homework before you hit the road looking for a new set of wheels. Doing your homework is the first phase of new car buying.

Here are the three phases we recommend in buying a car:

  1. Research 
  2. Shopping 
  3. Buying

All too often, people visit a car dealership with little or no idea of what they want or what it will cost them. Those buyers are sitting ducks for car salesmen.

Then there are the people who do a little research, then take the plunge. Like a patient at the dentist’s office, they want to get it over with as soon as possible. I recommend preparing well, shopping carefully, then, when you are fully prepared, negotiating for the car of YOUR choice. By separating the shopping and buying phase, you’ll drive off in a car that suits your personality, your needs AND your budget.

Here are the steps that will take you through the research phase:


1. Choose the right car for you. Read consumer magazine reports, talk to your friends, and of course, carefully review the information you obtain. Make sure the cars suit your lifestyle (don’t buy a sports car if you have 5 kids). Also, look for cars with a good repair record and cars that hold their value (don’t depreciate quickly).

2. Make sure the car you choose fits your finances. Talk to your credit union and loan officer to determine how much you can afford to spend on a purchase.

3. Price out insurance costs for each of your prospect cars. Call your agent and get a quote for insurance premiums on the vehicles you are interested in. In some areas, the cost of insurance will help determine which car you should buy. Remember to compute the cost for the life of the car.

4. Know the value of your trade in. If you are going to trade in your old car, make sure you know what it’s worth. Look up current car’s value by contacting the Auto Connection at the credit union or in the used car value guides available in the reference section of public libraries. The most widely used guide is the NADA (National Automobile Dealers Association) also known as the "Blue Book" (although it is orange in color). The most convenient and economical method of getting NEW and USED car information is through the Auto Connection. They will provide free of charge the latest dealer cost, rebates and vehicle specification information available and will mail or fax these to you. Another method is to also check the local classified ads to see what a comparable car is selling for in your area in the event you should decide to sell the old car yourself.

5. Decide on three different vehicles that are right for you. Decide which of the vehicles is your first choice and determine if you can afford it at the list (MSRP) price and be sure to include the insurance premium.

6. Prepare an auto-buying folder. Get the addresses and phone numbers of the local dealerships and the nearest large volume dealership. Obtain several Xerox copies of your drivers’ license, finance source information (credit union name, address, etc.) and your car insurance card. Place all this information in a file folder.

7. Choose a day to go shopping. A weekday towards the end of the month is the best bet but it really does not make a huge difference. It is important, however, that you purchase the car during daylight hours so you can thoroughly inspect it.


Now that you’ve picked the car you want to buy, it’s time to shop for it. Here are the steps that will take you through that phase of the car buying process.

1.  Locate the car of your choice. Call the dealers you located and the closest volume dealer. Ask if they have the exact vehicle (model, color, engine, transmission type etc.) you want in stock. If they don’t have it in stock ask if they accept orders-- and how long it would take to receive an ordered vehicle. If the salesman says "I don’t have it in stock but I can have one here tomorrow" say "Thanks, but no thanks". That is a standard salesperson response. Instead, call the other dealers in the area and try to find at least two locations with acceptable alternatives.

If they have the appropriate vehicle in stock, get this information:

  • The Vehicle Identification Number (VIN) AKA the serial number. This way you can confirm that the salesman was not "playing games" on the phone by comparing the number he gave you to the VIN number on the car.
  • Get the total price on the vehicle’s Monroni Sticker (Sticker Price) (If the dealer has an additional markup sticker, you probably don’t want to shop there).
  • Get the salesperson’s name.
  • Ask if there are any factory rebates or dealer incentives and the expiration dates.

2. Test drive the cars. Visit your local dealerships and ask to test drive the cars you researched. Make sure the car "fits" you, your family and your lifestyle.

3. Test drive the salesperson. As you test drive the car, you can test drive the salesman too. Ask yourself if you feel you could negotiate with this person? Get the salesman’s card and LEAVE the dealership. Refuse all invitations to be drawn into negotiations at this point.

4. Determine the dealer’s cost. Find out what the dealer paid for the cars you are interested in buying. By doing this, you can figure out what a fair profit would be and make an intelligent offer.

You can determine dealer cost in one of several ways:

Because pricing and rebate amounts change so often, we recommend you contact the Auto Connection at the credit union. You can also look up this information in such books as the Kelly Blue Book, New Car Cost Guide, Edmund’s Car Price’s as well as other publications available in the reference section of the local public library.

5. Preset your opening offer and the buying range. Once you know how much the dealer paid for the car, you can set your opening offer at about 2% over this figure. Make sure to allow for any options you are requesting. How much higher should you expect to pay will depend greatly on the car itself and the supply and demand of each vehicle. If a vehicle is very scarce, you may have to pay retail cost to buy the car. On the other hand, if the dealer has a large number of the same model on his lot, you can expect to remain at the 2% offer. A portion of your research should pertain to the availability of the model you want. You should also decide on the highest figure you will pay for the car. Now that you have the buying range, write it down on a 3x5 index card. Put this card in you auto-buying folder.


Now that you know what car you want AND what you should pay for it, it’s time to go in and make a deal. Here are the steps that will take you through the car buying phase of the process:

1. Bribe a friend into going along with you. If possible, find someone who knows a lot about cars, or a lot about negotiating. Instruct your friend to drag you out of the dealership if you begin to go over the buying range specified on the index card.

2.Bring a car buying kit. Make sure you include:

  • Your car buying folder, with the buying range index card.
  • If you are trading in your old car, bring a Xeroxed copy of the value from the current NADA Used Car Guide.
  • Blank index cards to write down the figures as negotiations proceed.
  • An extra set of trade-in keys. Some salespeople trap you at the dealership by "misplacing" the keys to your trade-in.
  • A calculator to check the figures throughout the deal.

3. Start out early and allow plenty of time. Spending enough time at the dealership may save you thousands of dollars.

4. Return to the salesperson you met before. Choose the salesperson you feel you have the best chance of getting a good deal from.

5. Test drive the car again and inspect it for damage. Virtually all new cars have some damage caused by the rigors of transportation from the manufacturer and from the time spent on the dealer lot. Most time the damage is very minor but it should be repaired nonetheless.

6. Negotiate for a good deal. You have finally found the car or truck you want and you can have it if you hand over enough money. Remember these tips as you negotiate:

  • The salesperson’s job is to take as much of your money as possible--- regardless of what he or she may tell you!
  • Write down the VIN number and your initial offer of the 3x5 index card or one of your vehicle spec sheets. Explain that you need to know all of the fees that will be charged as part of a cash deal and you would like them detailed with the dealers response written on your spec sheet.

ALWAYS be ready to "walk". This is the highest card you hold. Don’t become so attached to any deal that you can’t walk away from it. If you do walk, you can just start over again at the next dealership. NEVER BECOME EMOTIONALLY INVOLVED. Be ready for the crossover. Salespeople like to confuse you with figures. Therefore, if they are losing ground in one area, they are likely to switch to another area. Thus the "crossover". To make an offer, simply write the amount on the spec sheet and ask the salesman to present this price to his manager. The salesman is never authorized to accept an offer. Never give the salesperson any type of money during the negotiating process. Once you reach your price limit or time limit, thank the salesperson and leave, regardless of how many people you have talked to or what they have said. DO NOT let the salespeople intimidate you in any way to keep you in the dealership -- when you are ready to leave, say thank you and walk out. Remember... IT’S YOUR MONEY.

7. Try the next dealer in your folder. Head to the next dealership with the previous dealer’s best offer in your notes. If the same process is not successful at the second dealership, you may have to go to a third and so on until you get what you feel to be the best price available.

8. Get your good deal in writing. Once you have struck a deal, make sure the total price is written on a dealer’s Purchase order form and is signed by the sales manager. Remember, the salesman cannot guarantee a price on his own. Only the manager’s signature will be binding.

9. Be wary of additional sales pitches in the Finance Office (F&I). If you do not finance the purchase at the credit union, be sure to review the contract that is presented to you. Make sure there are no added costs. The only additional costs should be for state taxes, license fees and a documentation fee (never over $50.00).

There you have it -- The three phases of new car buying. If you do your homework and patiently apply these steps, your chances of getting a good deal are greatly increased. GOOD LUCK!!


There is a difference of opinion concerning the wisdom of trading in your old car when buying a new one. Some people claim you can never get what its worth. True, the salesperson may make you think you got a good deal but he probably took more profit somewhere else in the deal. This is why it’s important to know the value of your trade-in before you set foot on the dealer lot. Also, make sure you pay attention to all the figures in the deal. If you get a good price for your trade-in, examine the other figures to see if any have been inflated to give the false impression of a good deal. If the deal looks too good to be true -- it usually is!!

If you don’t mind a little extra hassle, you could consider using the trade-in as bait in new car negotiations -- then pull it out of the deal if you are not getting the figure you want for it. OR You can enter the deal without a trade-in and once an agreed upon price has been reached, bring in your trade-in. You should then find out exactly what the trade-in is worth. You can also sell your car to a private party and normally get a substantial amount more for it, however most people don’t want the hassle of advertising and having strangers come to their home to look at the car.

Ignore all of the salesperson’s attempts to convince you that your trade-in is worthless. If you believe him and accept a below value figure, you will see it on their lot the next day for hundreds more than they gave you for it.

Also make sure that the amount of your trade-in is subtracted from the taxable amount of your vehicle as this can also save you hundreds of dollars.