 Getting
a good deal on a car with cash
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 Dear
Dr. Don,
My husband and I are planning on buying a car next summer. We should
have about $15,000 to devote toward the purchase, and we plan to
buy without financing. Knowing that we plan to pay cash, and that
we also do not have a trade-in, what advice would you give us in
dealing with car salesmen, in terms of getting the best deal? I
know they will hold back special offers if we divulge the above
information too soon. Thank you!
-- Lauren Limo
 Dear
Lauren,
It's a nice change of pace to hear from a reader
who is saving up to buy a car versus planning to finance the purchase
through a loan or lease agreement. I'm assuming you're buying new,
but most of what's written in my reply will also work if you're
considering a used vehicle.
In one sense, you're right to be concerned about getting
a good deal as a cash customer. The typical car buyer is negotiating
three items: the price paid for the new car, the price received
for the trade-in and the financing package. That gives the salesperson
and the dealership three different ways to profit on your business
-- as well as giving them a little flexibility on any one of the
transactions.
Your cash-on-the-barrelhead, one-transaction deal
keeps the dealer from making any additional profit on financing
or a trade-in. You could try stringing that salesperson along about
whether you'll be financing the vehicle, but if you go into the
dealership as a well-informed consumer, you don't really need to
play games to get a good price on your new car.
What's a well-informed consumer? Well, at a minimum,
you should know the dealer invoice price on the vehicle, the amount
of holdbacks paid to the dealer by the car manufacturer and any
special promotions being offered by the car manufacturer.
From my experience, it's hard to beat the level of
price information you can get from Consumer
Reports. For $14 you can learn all the price information about
the car you're considering. That's money well-spent. I had a salesperson
in a dealership once tell me that the Consumer Reports numbers were
all wrong, only to then have to eat crow when he pulled out his
invoices and they matched the Consumer Reports numbers to the penny.
Take a look at some of the free sites, too. I like
Edmunds.com,
especially for its "True Cost to Own" feature that estimates
what your annual expenses will be with the car over the next five
years. The site provides invoice numbers, as well as a column listing
"what others are paying" for that car. Kelley
Blue Book is also worth a look and provides much of the same
information.
Take these steps and you'll be able to spot
value and know when you're getting a good deal. The auto
channel on Bankrate also has a host of car-buying tips and features
to get you comfortable with the whole process.
To ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "financing
a home," "saving & investing" or "money."
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