019 Stewllenium Radio - Buying A Car I

[Music] This will change your life. [Music] My people, welcome, stupidly am radio, Jonathan Stewart. Today I'm going to talk about buying a new vehicle. This is going to be the first of three episodes that I'm going to dedicate to this topic. We're going to focus on trying to keep more of your dollars in your bank account and out of the bank account of the car dealer, or even worse, their finance company. If you are near a computer, I'm going to direct you to some websites, but if you want, that's no problem. I'll tell you what you need to know, and you can check it out at your convenience. So here we go. Hammer down. Let's talk about buying a new vehicle. [Music] So you were thinking about buying a new car and you want to save some money. Well, my friends, you've got the right podcast in your ears. Today I'm going to give you several tips and pieces of advice to help make buying a new car a more enjoyable and cost-effective experience for you. How's that sound? Very nice, huh? Assume you've decided you want to buy a new vehicle. Here's my first and probably best piece of advice. And you can write this down if you like. Don't do it! You are probably better off financially to just drive what you have right now. It's just transportation. If what you have right now is still getting you from point A to point B, stick with it. You're still a good person, even if you drive a hoopty. But I realize some people, for whatever reason, will not be able to take that advice. I've said my piece. I won't be the dead horse. But don't do it, man. Walk away. Step away from the dealership. Drive what you own. Okay, so you've ignored my passionate plea. You are going to buy a new vehicle. I need to point out some facts. First, you buy a new vehicle once every several years. The person you buy that vehicle from sells them every day. Okay, Pop Quiz. Who has the informational advantage? The seller. So you need to do your homework and be careful. If you walk blindly into a dealership and expect someone else to have your best interest at heart, you are going to be disappointed. You need to have a plan, my friend. So today, I'm going to give you a framework that you can build your plan around. One of the most important things I can tell you about buying a new vehicle is that there are several important decisions to be made. And you need to make them separately and in a logical order. The big three questions, according to Stuart are, number one, which car are you going to buy? Number two, what is the price of that car? And number three, if you are financing some of the purchase, what is your interest rate? Got it? Number one, which car? Number two, what price? Number three, what interest rate? Now, this is of the utmost importance because the person you are purchasing the vehicle from may try to mix these questions together or change the order. But you aren't going to fall for that. One, two, three. Which car? What price? What interest rate? Alright, let's focus on question one. Which car? How do you decide which car? Well, the safest way to start is on the internet. I like to use the manufacturer's website as well as Kelly Bluebook's website. That's kbb.com or Edmunds.com. I also like consumer reports and MSN.com. Now, let's imagine that my wife, the lovely and talented Mrs. Stuilinium, said, "Oh, look how cute! Every time we drove by a Volkswagen Beetle." For example, I could run down to the dealership and start checking out a bug for her. But that would give the dealer a chance to work me over. And I want to avoid that until the last possible minute. I get on kbb.com and price the vehicle in the color and with all the options that my wife is most interested in. Once I enter exactly which make, model, color, and etc. that I want, the website provides me two prices. The MSRP and the invoice price. The MSRP stands for the manufacturer's suggested retail price. Most of the time, this price isn't that useful to us. The invoice price is the one that I want to look at. This reflects what the dealer pays the manufacturer for the car. Basically, there's a caveat to that statement that I'll hit in the next episode. But for now, think of the invoice price as what the dealer paid for the car. Now, I'm glossing over a lot of things for the sake of time, but you really want to do your research and figure out which vehicle you want. Specifically. Now, once you have picked out that vehicle, do you go to the car lot? No, sit down. Don't do it. It is time to work on number two, which price? First, you want to solicit bids from dealers. I like to email all the dealers who carry that brand of vehicle and are within driving distance of where I live. Maybe 100 or 120 mile radius. Why do I do that? I'm comparison shopping. Vehicles are a commodity. We sometimes feel like they are a luxury item because we buy them infrequently and they are expensive compared to most of our day-to-day purchases. But they are a commodity, like rice. There are thousands of cars just like the one you want. Our goal is to buy one of those at the best price that we can negotiate. So, I email all the dealers within a certain area and I tell them exactly what I'm looking for and ask them for their absolute lowest rock bottom deal of the century price. And then I wait. And that is another critical part of the strategy. You must be patient. If you are in a hurry to buy something today, you absolutely can. But you will likely pay more than you needed to. If you are patient, then time is on your side. It isn't a bad idea to call the dealership and confirm that they received your email. This lets them know that you are serious. Now they will ask you to come in and visit them, but don't do it. Politely ask them to email the quote and tell them that you hope to visit them someday if their quote is competitive. Alright, we decided which car and we are working on the price. We emailed several dealerships and received some bids. Now it's time to go to the dealership to continue the negotiation. Now I don't typically wear my suit and tie to the negotiation. I'm likely to wear jeans. Maybe I'll mow the lawn before I head down there. I personally don't want to send any signals that I have a lot of money to throw around. I walk around the dealership and wait for someone to help me. If I've dressed down enough, this might take a while. Finally, someone will come and ask me if I need help and I'll tell them that I've been working with Joe by email. And with any luck, they will go tell Joe that I'm there. Now if we've done our homework with Joe, then that's going to save a lot of time and headaches moving forward. He has emailed you a price and you have a place to start. If you haven't done this, things can get ugly. I remember shopping for a car several years ago before email was widely used. I was walking around a car lot and this salesperson comes up to me. We start talking and not long into the conversation, he says, "So what kind of payment are you looking for?" Now I want to be as kind and gracious as possible, but this question really aggravates me. It's like if you were playing cards with someone and they say, "Hey, show me all your cards." Would you do that? Of course not. So don't answer the payment question. Actually, here's how I like to answer it. I say, "Well, it depends on what kind of vehicle I buy. If I buy a really nice vehicle, I'd expect a higher payment." Hey, why are you asking about the payments? Are you going to make my payments? What? No? Oh, okay. Well then, you show me the cars, I'll make the payments. Hopefully that conversation sets a better tone for us moving forward. I've talked to car salesmen and they tell me that they call the person who will answer that question, a payment buyer. If you tell the salesperson that you can afford $350 a month, I will be shocked if you leave with a payment less than that number. Prices out the window at that point. All the salesperson has to do is find some car you sort of like and sign you up for $350 a month. We don't want to buy a payment, we want to buy a car. Don't answer that question, keep your car to yourself. Alright, back to Joe. Joe shows me the vehicle that he gave me the quote for and I double check that it is, in fact, the vehicle that I want to purchase. If it is, then question 1 is answered. We know which car. Now to finish up question number 2. Joe offers me a soft drink and we sit down at a table. I tell Joe that I thought his bid was getting close but I came in to ask him what he can do to lower that price. I am aiming to buy the car at or below the invoice price if possible. Now if you are paying close attention, you may be thinking to yourself, "Store, how could I ever hope to buy the car for less than the invoice price? Isn't that what the dealer paid for the car in the first place?" Right you are my friend. I'll explain that one next time but right now Joe is about to make me a better offer. Joe takes a piece of paper or a notepad and he writes a new number on the second sheet and slowly slides it across the table. I don't know why they all do it this way, maybe it's law, but I'm glad that they do because it gives me a chance to pull this move. I slowly peek under that first page and then when I see that number, I do something that I actually practiced at home earlier that morning. I squint my eyes and wrinkle at my face just like I ate something foul and I say, "Noooo!" Like someone belly punched me. Then I smile at Joe, stand up and start heading for the door. Thanks for your time Joe. You've got my email address. If you decide you want to sell that thing, you let me know. Now Joe is going to start begging and pleading with you to come back and sit down. Don't do it. Go home. Have a bottle of water. Wish more in the grass. Read a book. Do your homework. When you get a chance, check your email. Oh, look, email from Joe. There might be another number in that email and it is likely lower than the one he's slid across the table. So be kind about it, but walk out. Go home. You'll save yourself money because when you take that number back in to continue your negotiations, you'll end up with the right car at the right price. Time sure flies when you keep in your money in your pocket. I hope you find this information to be useful the next time you go out to buy a new vehicle. I'm out of time so I've got to call it. But next time I'll talk about other incentives and closing the deal. I really appreciate you tuning in today. If you have any questions, requests or suggestions for future shows, you can email them to me [email protected]. Also check out my website stuillineum.com. Until next time, Johnathan Stewart. Stuillineum Radio. [Music]