The Ultimate Buying Experience

A friend of mine totaled his car last year, and the car was 100% paid off.  Sound familiar?  This has happened to me before, too.  And honestly, factoring in car depreciation, we totally get screwed on this whole deal.  Insurance companies don't build 100 story towers in all the major cities by paying out claims and taking care of the policy holder.  I feel like I can say this, since I sold property and casualty insurance, but insurance is nothing but a racket that is legally mandated.  Fortunately, his insurance policy put him in a loaner/rental for a few months until he could decide on a replacement and not feel rushed.  

A few days ago my same friend texted me, and I replied "New phone who dis."  Just kidding, but he informed me that he had decided on another BMW X5, particularly a 2020 that was used as a loaner for a few months (with just a little over 3,000 miles)!  I, of course, being the solid friend that I am, volunteered to ride with and drive his loaner back to his house after his purchase.  Additionally, and if you've ever bought a car, you know that you never want to go into a dealership alone.  So, I also volunteered to be his car buying sidekick.

This blog post is a recap of all we learned in the car buying process:

1)  As stated before never go in alone.  The psychology of the sale, on the car dealership's end, is the sales person and his or her manager.  They will play a sales tactic called "good cop vs. bad cop." So, likewise, you should also have someone to play the good cop v. bad cop.  In this case, I played my friend's girlfriend who was a little bored and slightly high maintenance...and who definitely wasn't sold on Beamers, even though, little known fact, I used to build X5's on an assembly line.  This tactic can also be referred to as "mirroring"...

2) NEVER make the first offer.  Say the MSRP is $61,500 and you offer $55,000, they could have very well offered $53,000!  So you always allow the dealership to make the first offer.  Your counter offer should be lower than where you wish to end the negotiation.  Which takes me to my next recommendation.

3) Never think that when they come to the table with, "This is the bottom line, this is IT" that it's really the bottom line and last offer on their end.  Trust me, we had the sales guy say that line at least 4 or 5 times before it was all over.  

4) Never ever act excited about the car, especially during a test drive.  Your excitement gives the sales guy some collateral that you are super hot for the car.  Therefore, you are less likely to have the upper hand in the sale.

5) Never act in a hurry.  Always cut out 2-3 hours of your day for the entire process.  I'll dive a little more into this later in the list.  But, it's important not to rush the process.  For example, after 3 hours, we got up to leave to "go look at some other cars with zero percent financing" when the dealership immediately took another $500 off the offer.  So, make sure you have enough time to invest in the deal.

4) Ask for the invoice, whether the car is new or used.  As the consumer, you have the right to know what the dealership paid wholesale for the car!  And, that's even better leveraging for you.  Additionally, you can calculate what the dealership will make off the deal.  If they don't show the invoice, I wouldn't do business with them.

5) Do your research on the front end.  As hard as it may be, make a list of things you wish the car had that it doesn't.  Use these talking points as collateral.  Now this may backfire for a quick minute as it did for us.  For example, in our experience, our the manager said, "well maybe this isn't the right car for you."  In which case, my friend said, "Well, my lady here doesn't love it, but for the right price, I think she could love it."

6) When the sales guy comes back with the new offer get everything and I mean everything in writing.  First, based on Covid-19 the Gentleman's handshake is out the door.  But, I'll share a quick story.  When I lived in South Carolina, I left a job to take a job with a small firm because they offered more salary, but most importantly they offered full benefits after a 3 month probationary period.  After my three months were done, I came to the owner to ask about starting my benefits when I heard, "What benefits?!"  So, from then on out, I don't ever rely on a verbal contract (even though in contract law it's as iron clad as a written contract, it's still your word against theirs.)  And, in all honestly, if someone is truly on the up and up, they'll never really have any issue with putting anything in writing.  So never feel bad about asking for this.  Also, we are very visual people, so seeing an offer is very different than hearing it.

7) If you feel you can't get anymore movement off the sticker price, start going in for upgrades.  For example, we got $600 worth of all-weather mats added to the deal + a clear coat that prevents paint damage from flying rocks or any damage caused by off-roading.

8) Definitely check the service agreement package and the warranty package, as there may be some bargaining/negotiating room there as well.  A BMW is considered the ultimate driving machine; however, they do break.  On average, a BMW owner is looking at $4,000 in repairs a year, on average.  So Warranty packages DO matter.

9) See if they'll throw in a little merch.  Let's face it, merch = free advertisement for them.  It never hurts to leave with a trucker cap and a key chain.

10)  If you feel rushed at all, or they are telling you someone else is coming to buy it, then call the bluff.  I like to use the phrase, "well I guess it wasn't meant to be."  In our case, the salesman told us to let him know as soon as possible since the loaner department wanted the car back soon.  My friend looked at me, and I said, "maybe we head on down the road then and look at some other options."

11) This is an educated consumer move.  In this day in age, there is so much technology to use and not just for cat photos.  You can basically have a computer in your hand at all times fact checking.  Use that!

12) Interest rates are contingent on your credit score.  So if you're not well qualified, then it's not the dealer's fault, but if you have a 750 or higher and not getting a .99% interest rate, you may wanna throw out that Mercedes Benz is offering 0% financing right now.

13) When you buy a car that is $65,000, please know that is a bad investment.  So please ask to look at the cost of leasing in comparison.  When you're buying a luxury car and plan to keep it for only a couple years, it just makes more sense to lease due massive depreciation when you drive off the lot.  There are such great lease deals out there, and you have more options at the end and even during your lease.  Additionally your GAP insurance and warranty is included throughout the term of your lease.  This website is called Edmund's and shows the nitty gritty on car ownership depending on make and model and depreciation.

14) If they ask "how much can you pay per month," NEVER answer this question.  I have known people to get screwed and got all sorts of additional things added they did not need.  Always say that it's contingent on the value you're getting, and leave it at that.

15) One of the more detested professions in America is a car salesman.  So, while it's okay to allow the sales person to chat you up, don't let your guard down, because it's all a big poker game.  Never show your full deck.  

Now in this day in age, the consumer is more control than ever due to the information at our fingertips.  I really wanted to end on #10, but per usual I get a little long winded.  But, that concludes our car buying 101 experience.  I hope you maybe take some of these tips and they "werk" for you!  Best of luck, and may the force be with you!