So, you dread shopping for a car. Do you even know why? As many as 87 percent of Americans report that they dislike the traditional car shopping experience. Chances are, there is more than one thing holding you back from shopping for a new set of wheels.
In our three part series "Solutions to Your Car-Buying Anxiety," we will explain common problems and solutions for car shoppers who would rather be doing anything else.
Let’s start things off right with a story showing a typical car buying experience from Tracey Lawrence of Grand Family Planning:
"My husband and I recently bought a used car. I wanted a quality, reliable vehicle I could pay for with cash.
I researched cars that were in my price range, under four years old, got around 30 mpg, had 4-wheel drive, preferably a cross-over. And my husband is 6’7”, so it had to accommodate his largesse.
As a AAA member, I have access to their search tools for scanning the inventories of certified dealers. I also looked at CarFax reports.
The model that suited us best was a 2015. We found one with 34,000 miles, no accidents and almost a year of factory warranty left.
The dealership we went to was not as straightforward in their dealings as I would have liked. They played games and tried to add extra charges. But I knew the facts regarding the vehicle, rejected the add-ons and held out for a better price on our trade in (which I knew the value of going in as well).
I then took the car to a dealer to be checked out before making the final purchase."
Most people take about four months to research, shop for, and buy a car. Not everyone will have all of the same specifics, but most people will follow the same steps, starting with RESEARCH. Autotrader found that buyers spend an average of 14 hours and 44 minutes on it. It can be a long, drawn-out process with lots of pitfalls.
Let's tackle a few of the common anxieties people have with the car-buying research process—and that starts with your budget.
Problem 1: I don’t know anything about cars. Where do I even start?
You’re not alone on this one, but you don’t need to know EVERYTHING about cars to feel competent when shopping for a car.
Only about 30 percent of consumers know the exact vehicle they want, when it comes time to buy a car. To be prepared, you just need to know about the model you want to purchase and, if possible, some comparable models, and your trade-in (if applicable).
So, for the majority of Americans, how do we figure out what car to buy and where to buy it?
At this point in the car buying process, you can either pay someone to do the work for you, or get started on your research. If you don’t even want to do any research, but want an expert to help you with your purchase journey, consider hiring a car buying or car concierge service. You can get help whittling down options with a professional car shopper, who then helps to schedule any test drives and does any negotiating for you. Many can even then deliver the car to you when it's ready. This service, of course, is for a fee. Sometimes it is a flat fee. Sometimes, it is a percentage of savings.
If you don’t want to (or can’t afford to) pay someone to shop for you, then it’s time to start the research phase of your purchase.
Problem 2: How much should I spend?
Personal finance guru Dave Ramsey says that the car you choose requires knowing your budget.
Either you are going to pay with cash or you will finance the purchase. If you have saved your money and are ready for the purchase, then your budget is already set. If not, how should you set your budget?
In our article "A Beginner's Guide to Auto Financing," our experts explained the steps to take:
- Know your credit score
- Make a budget
- Explore lending options
Problem 3: What car should I buy?
Once you know your budget, then you can move on to the vehicle selection.
You need to see what your options are and get researching. To what end? You want to figure out what make and model would be best for your situation and budget, and learn about it.
"You can't really rush getting a car if you want to save money," advises Will Craig, Managing Director and CEO, LeaseFetcher. "The more carefully you think about your choice, the less chance you have of being caught out. Draw up a list of the reasons why you want a car and then decide the one factor or feature that you're looking for in it. Do you want a car that looks good? One that's cheap to run? One that has a lot of cabin space? Work out what that one must-have feature is and then do some simple google searches using that phrase – for example, 'best car for [your feature].' This should return multiple cars that you can then pick from."
Sonia Steinway, CEO of Outside Financial, a site focusing on educating consumers about their auto loan options, has this advice: "Our number one piece of advice is to do all of your research before you step into the dealership. Start by narrowing down your list to three to four vehicles you’re interested in. Reputable sites like Consumer Reports, Jalopnik, Edmunds, and KBB can help you decide what vehicles make sense for you based on your needs."
If you have no idea where to start, start by visiting a few different car finder sites and sorting by local vehicles within your budget. If you still don’t know, try the Cars.com Matchmaker to consider different priorities and features.
Problem 4: Where should I buy it?
Timing is key. "Do your homework BEFORE you step foot in the dealership or reach out online," advises MyCarLady.com founder, car concierge, and DMV expert Sarah Lee Marks.
Basically, buyers have the option to buy new or used, public or private. You can find new and used car listings through a variety of websites. The new marketplace TRED even offers used cars sold by private sellers online, with dealer-type assurances.
When you need to choose a dealership, use online ratings and reviews, as well as model availability to find which dealership is best. Dealership ratings are available on many sites, though we like how iSeeCars combines available models with dealership ratings and pricing reviews to show the best deals at the best dealerships.
Jake McKenzie from Auto Accessories Garage suggests focusing on the car you want. He says, "The ideal car buying experience would be finding the value of the vehicle you want, and deciding on a price you are willing to pay before even setting foot on a lot. Then, it’s only a matter of finding a dealership willing to meet your offer."
To narrow down dealership options, David Weliver, founder of Money Under 30 and a former car salesman has some advice:
"When possible, the very best way to buy a car is to email three (or more) dealerships that have the exact car you want and tell them you’re going to buy a car this week, please email you the paperwork with the entire price (including ALL taxes and fees) for you to review. Make sure to tell them that you’ve contacted several other dealerships.
Now, not all dealerships will do business this way. Some will outright refuse to quote you, and others will likely push back. But some will send you their bottom-line price. Once you get a few quotes, you’ll easily be able to spot the best deal. Keep in mind, however, that when dealers quote this way, you likely won’t be able to negotiate any further. They most likely are sending you their best price."
Problem 5: I want to do a trade-in. How much is my car worth?
Trading-in your current vehicle as a part of the purchase price for your next car can make or break your overall dealership "deal" and your budget. You need to know what it is worth and stick to it, just as Lawrence did in our example at the start of this article. She "held out for a better price" on her trade-in. You should too.
There are a variety of resources you can use to follow her example and check how much your car is worth as a trade-in. Here are a few:
- Black Book Value via cars.com
- Galves Accu-Trade Value from TrueCar
- Kelley Blue Book Value
- Edmunds.com What’s My Car Worth?
- CARFAX History-Based Value
Arriving at a dealership prepared, with your research in-hand is the best way to get a good deal. The links above will help you to find the fair market value for your vehicle, so that you can feel more confident. You can even get an instant offer from local dealerships.
Stay tuned for more of our "Solutions to Your Car-Buying Anxiety" series. Next time, we visit the dreaded dealership. Dun. dun. dun. (ominous music plays)
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