Dear John: Six easy steps to buying a new vehicle
Story by John LeBlanc
Every month, a Dear John letter arrives in my email inbox from a reader looking for new vehicle shopping advice, mainly because car shopping is about as much fun as scraping the ice off your windshield on a cold winter morning. However, picking a new car, truck or SUV, and getting it for a fair price, doesn’t have to be a painful experience.
Here are my six easy steps to buying new vehicle:
Step 1: Establish your budget
Before you start trolling the new car websites before you even think of entering a new car dealership to start test-driving your next dream machine, establish what you can afford.
Whether that’s a lump sum cash amount, or what you can handle on a monthly basis — via a loan or a lease — it’s imperative that you nail down your new vehicle budget before you start the car buying process, whether virtual or in person.
And if you need a broad guide as to what’s a reasonable amount, some financial experts I know suggest spending no more than 20% of your monthly take-home pay on a vehicle payment.
Step 2: List what you need your next new vehicle to do for you
If you haven’t been car shopping in a few years, you may find the variety of automotive brands, models and vehicle types overwhelming. So once you’ve established what you can afford to spend on your next new vehicle, make a list of what you need the vehicle to do for you.
From a practical standpoint, how many passengers will you need to carry on a regular basis? What kind of cargo capacity will you need? Do you prefer sedans, hatchbacks, crossovers, minivans or trucks? How many kilometres do you plan on driving on a yearly basis? What’s the breakdown of where those klicks will be driven (city, highway, country roads etc.)? Do you prefer rear-, front- or all-wheel drive?
And from an emotional standpoint, how important is styling to you? Do you want great fuel economy or high-performance? Are there any key safety, luxury or convenience features you want? Are there any particular specific brands or automakers that you’ll want to avoid or gravitate to?
Step 3: Do your homework
Long gone are the days when car shoppers had to walk into a new car dealership and practically beg for any equipment or pricing information. With the advent of a little thing called the Internet, though, new car buyers have more access to more information than ever before.
If you’ve been following my steps, you now have established a budget, and have an extensive wish list of what you need your next new vehicle to do for you. Now’s the time to sit down at your computer, do your homework and come up with three competing vehicles that meet your criteria.
Narrowing your list of potential candidates to three will not only give you some variety but also reduce the amount of time you’ll need for my next step: The test drive.
Step 4: The test drive
Now that you have your short list of three potential new vehicles, it’s time to go test driving.
First off, be clear at the dealership that you’re only interested in test driving the vehicle. You are not interested in discussing or negotiating a price. Also, let them know you have three competing vehicles, as this will also illustrate that you have done your homework and not just a “tire kicker.”
Book enough time so that you can test drive your three candidates back-to-back. This will allow you to compare the vehicles under similar weather and road conditions.
Try and pick a test route that will mimic your next new vehicle’s driving conditions (city, highway, country roads etc.). Also, ask that the salesperson not to accompany you on the test drive. This will allow you to take the time you need to evaluate the vehicle (i.e. see if the seats are comfortable; if the trunk is big enough; if you can see out if the car or if your smartphone connect easily) without getting a sales pitch.
If they don’t agree, simply go to another dealer.
Step 5: Choose your top candidate
For a lot of new vehicle buyers, the toughest part of the test drive is NOT starting the negotiating process immediately afterwards. Even after you’ve test driven all three candidates, and you may have made up your mind on what car to get, the smartest thing to do is take a breath, go home, review all your research and test drive notes, go over some of your preliminary pricing data and pick a top candidate from the three on your short list.
Step 6: Negotiate a final price
Whole books have been written on this, the final easy step to buying a new car: negotiating a final price. But for the purposes of keeping this a simple and easy process, the final step of getting the new vehicle you want for a fair price is relatively easy.
First, go back to the dealer to test drive your final candidate. Get a price estimate on paper, essentially, their “best offer.” Say “Thanks!” Now walk out the door.
Take that offer and start calling/faxing/emailing other local dealers to get a second price. Once you have a price that’s lower than the original offer, take that back to the original dealership.
This may take a few rounds of back-and-forth, but by dealing with competing dealers, you’ll feel more comfortable that you are getting the best deal possible.
Take these six easy steps, and you should have the new vehicle you want at a price you can afford.