11 Ways Women Can Save Money on a New Car
Follow these tips when you're ready to buy your next auto and you can drive home a bargain
Kerry Hannon has spent more than 25 years covering personal finance for Forbes, Money, U.S. News & World Report and USA Today. She is the author of What's Next? Follow Your Passion and Find Your Dream Job in Your Forties, Fifties and Beyond; Great Jobs for Everyone 50+ and Suddenly Single: Money Skills for Divorcees and Widows. Her website is kerryhannon.com. Follow her on Twitter @kerryhannon.
Even better, I’m very proud of the price I paid for my Subaru. I got the car for $4,250 below sticker price, which was the result of my research and dealmaking. I’ll share my tips to help you drive home a great deal on a new car in a minute.
The Truth About Female Car Buyers
I shop for my cars myself, without my husband. That’s actually not too unusual for women. Forget about what you’ve read about how car dealers rip off our gender because we’re incapable of negotiating smart deals. Not true.
(MORE: Best Ways to Save Money and Stay Safe in 2013)
Here’s what is true: Women buy just over half of all cars sold in the United States and take part in 80 percent of all family car-buying decisions. And women car buyers do more research than men, generally speaking.
We’re also substantially more practical in our vehicle choices. Women focus on safety and dependability, according to the experts I canvassed. That sounds a little like the way we approach investing, doesn’t it?
11 Tips for Car Shopping
OK, now onto my tips. Here are 11 ways to get the best deal on a new car now:
1. Time your purchase. As a rule, you can save more by buying at the end of the month.
Auto salespeople generally operate on a quota system, collecting bonuses from the dealership and often the manufacturer if they hit their mark for the month. So if they’re running short as the calendar is about to flip, they’re motivated to get the sales manager to knock down the price of a car when negotiating with a customer.
2. Consider purchasing one of last year’s models. Now that 2014 lines are making their way into showrooms, carmakers are cutting prices on their 2013 stock and are more open to negotiations so they can get them off the lot. You’ll still be buying new, just not new new.
3. The Internet is your friend. It's so easy to research car prices online. I strongly suggest you spend some time trolling the leading auto websites. They’ll tell you what you can expect to pay where you live, right down to your ZIP code. (Side note: You may want to step a little beyond your immediate locale when buying. Urban dealers often offer lower prices than suburban and rural ones.)
Some of the best auto pricing research sites are Autotrader.com, CarsDirect.com, CarGurus.com, Edmunds.com, Kelley Blue Book and TrueCar.com.
When I shopped for my new car, I started at the main Subaru site to see which models and options were available, then I visited the sites of local Subaru dealers to browse inventory. Then I headed to Edmunds.com to get what the site calls the “True Market Value” price (or TMV). That’s the number Edmunds derives by using actual sales figures to reveal the average price buyers are paying in your area.
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4. Request Internet pricing from local dealers. Email a handful of dealerships to get a range of their “best” prices for the car you have in mind. I contacted six dealers online and was surprised to find a $3,000 gap between the highest and lowest price quotes. So I took the lowest offer and e-mailed the other dealers to see if they’d beat it. One did; the others offered to match it.
Internet price in hand, stop by the closest showroom or the one that popped you the lowest figure and take a test drive. Don’t feel obligated to buy there, though.
I felt uneasy with the salesperson who let me go for a spin, but then kept me waiting for nearly an hour while he talked to his manager about the price. As I was leaving, he ran after me, sticking a Frisbee through my car window for my dog, who I’d brought along, asking what he had to do to get me in that car today. Too late. I smiled and drove on.
5. Develop a relationship with Internet salespeople. I exchanged emails with one of mine for nearly three months before I made the final decision to buy — from him.
As I shopped, I’d send him the prices I was being quoted and bounce questions about features, options packages and colors. One note he sent certainly helped me save money. Here’s what he wrote:
Subaru never has rebates, but they have something called “dealer cash” that Subaru gives to all dealerships and it’s up to them to pass those savings onto the customer. So when shopping for a new Subaru, keep in mind that the dealerships have $1,145 to play around with under invoice if they choose to give it to you.
6. Set your number. Figure out what you can really afford to spend and hold to it.
After looking at the Edmunds TMV price and getting quotes from six dealerships, I came up with how much I was willing to pay, including all the miscellaneous fees that would come with the purchase — things like title fee, dealer processing charge, temporary tags and sales tax.
Don’t forget about those related expenses, since they can be substantial (think of them as the closing costs for a car). Mine amounted to about $2,000.
7. Scour for rebates, cash-back programs and low interest rates on car loans. Edmunds.com’s Incentives and Rebates section can tell you about many rebates, cash-back programs and cut-rate financing dealers are offering. At Cars.com, you can find what the site considers the latest top 10 cash-back offers; some are for discontinued 2012 models.
Just keep in mind that auto incentives don't apply to all models. You’ll need to read the fine print online.
Also, your credit must be top-drawer to get a 0 percent loan or other low-rate financing. If your credit is good, you shouldn’t need to pay more than about 3 percent interest for a car loan these days, whether you finance through a dealer, bank or credit union.
(MORE: 4 Signs That Your Driving Skills Are Declining)
8. Before making an offer, contact your car insurance agent to find out what your premiums might be. You might find they’re so steep you’ll want to find an alternative model.
It’s also a good idea to know the cost of car insurance in advance, so you can factor that amount into your purchasing equation.
9. If you’ll be trading in, mum’s the word. Wait until you’ve come to a final price on your new car before telling the salesperson you want to trade in your old one. It’s important to keep these transactions separate. Otherwise, the dealer may jumble the two and lead you to overpay for the new car without knowing it.
For a sense of what your current car is worth, go to the Kelley Blue Book site for a range of its estimated value. Many dealers are paying on the high end of the KBB range now because used cars are in demand.
10. Ask for a deal on service and maintenance for your new car. You may be able to get free oil changes for a year or discounted routine maintenance.
11. Don’t let yourself get pressured to buy extras you don’t want or need. Most car dealers work on commission, so the more you pay, the more they make. That’s why you may be urged to buy things like an extended warranty, road service, wheel and tire protection or rust protection.
If a salesperson learns that you won’t be financing — another source of profit — he or she may then pull out the stops to sell extended warranties and such. Stand your ground if you don’t want them.
I believe in Subarus, I’ve owned three of them, so I politely turned down an extended warranty.
Haggling Isn't Fun
One last thought: The car-buying negotiation process can be grueling. After my purchase was finalized, I didn’t even get a handshake from the finance guy when I left the dealership.
But I didn’t take it personally. I drove away a winner.
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