Our Car Buying Experience - Part Three: 5 Lessons Learned to Reduce Stress and Cost

Read Part One: The Negotiations and Part Two: Financing and the Trade-in.

After we bought our car, I thought about the things that worked well and things I wish I'd done a little differently. Here are the lessons I came away with:

1. Negotiate by email. Whether your email communications start with a car buying program as I discussed in Part One of this series, or you initiate the communication via the dealership's web site, negotiating by email is the way to go. The dealership can't strong arm you if you're not in front of them, and you don't waste a lot of time sitting in their little room waiting for the salesman to get back from consulting with his manager. Email negotiation also gives you the opportunity to price match - we bought our car from a dealer that agreed to match another dealer's offer of $500 under invoice. Finally, once you've agreed on a price, ask the dealership to email you a breakdown of the taxes and fees you'll be expected to pay so there aren't any surprises when you go in to close the deal. (This will also give you a chance to look up any suspicious fees.)
2. Make sure the car is on the lot. Five years ago, Marc and I found ourselves at a Mazda dealership waiting for a car. After we'd completed all of the paperwork, we were told that although the car we wanted was listed in their computer system, it appeared that it had been sent out for customization and the closest car they could offer us was $800 more. We were mad. It was classic bait and switch, as far as we were concerned. Not only did we walk away from Galpin Mazda, we will never do business with the entire Galpin family. This time around, we made sure the car was on the lot before we went in (well, after a little hiccup).
3. Mention any trade-in only after you've agreed on a purchase price. Otherwise, the salesman might try to recoup the trade-in value on the purchase price. For more on this topic, see Part Two of this series.
4. Plan your financing before you go in. Knowing how you are going to pay for the car is at least as important as negotiating a good deal. If you are going to finance the purchase, make sure you find the best loan available to you. Know what deals the dealer is offering on financing, and what the restrictions are. In our case, Nissan was offering a $1,000 rebate with 3.99% financing or a $1,250 rebate with no financing. Since I knew we'd be paying off the car quickly and we were able to get a 4.99% rate with USAA, it made sense for us to take the extra $250. But if we'd planned to make payments for the full five years, it would have made sense to go with Nissan's financing. (For example, a $20,000 loan at 3.99% for five years results in $2094 interest paid; $20,000 at 4.99% results in $2640 interest paid, or $546 more.) Also, if you know you don't want or think you might not want dealer financing, then get preapproved with a different lender and take proof of the preapproval with you when you buy the car.
5. Finally, always be prepared to walk away. If you ever feel that the deal isn't right for you, walk away. Marc and I were prepared to leave when the dealership offered us a mere $2300 for our trade-in. This is obviously easiest to do when the car purchase isn't urgent, but even if you do really need a car, it's not worth closing a deal that will make you miserable as soon as you walk out the door. Tell the dealer that you need to think about it some more and leave. If you have to, you can always start over with another dealership. But getting out of a contract once you've signed it is, at a minimum, a huge hassle - and at worst, might not be possible.