Ray and Zach Shefska with CarEdge MINI
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Deal School 2026

Ray Shefska's complete car buying playbook — updated for the 2026 market. Check off each lesson as you go.

Created by Ray Shefska — 40+ years as a car dealer, now America's most trusted car buying advocate — and his son Zach Shefska, CEO of CarEdge.

This free car buying checklist walks you through every step — understanding 2026 market conditions, finding the right new or used car, negotiating out-the-door pricing, and surviving the finance office. Check off each lesson as you complete it.

1.1

How the New Car Market Has Changed

  • Feb 2026 average transaction price: $49,353 — up 3.4% year over year (KBB/Cox Automotive)
  • Average sticker price (MSRP): $51,440 — 11th consecutive month above $50,000
  • Average new-car loan rate: 9.41% sales-weighted average (Cox Automotive, Jan 2026)
  • Incentives are rising: 6.9% of ATP in Feb — dealers are motivated, use this to your advantage
  • 25% tariffs on imported vehicles remain in effect — expect $2,000–$6,000 in added cost

    1.2

    How the Used Car Market Has Changed

  • Wholesale used prices up 4% YoY — Manheim Used Vehicle Value Index: 212.3 (Feb 2026)
  • Average used-car loan rate: 14.03% sales-weighted avg (Cox Automotive)
  • Black Book: wholesale prices are appreciating significantly faster than past years
  • Good news: lease returns rebounding + tax refunds running 10% higher this year (Cox Automotive)

    Pre-tariff inventory (imported before April 2025) = potential savings

    1.3

    How Much Car Can I Afford?

    Ray's 10% rule: car payment should never exceed 10% of monthly gross income

  • At today's rates (9.41% / 60 months, Cox Auto), a $35K loan = $733/mo
  • 58%of borrowers now have negative equity — an all-time high (Cox Auto, Feb 2026)

    29.3% of loans are now 72+ months — also a record. Longer terms = much more interest paid

    Gas prices spiking: national avg hit $3.48/gal (AAA, 3/9/26) — up 58¢ in one month. Factor fuel costs into your budget!

  • $5,000/mo income = $500/mo max | $8,000/mo income = $800/mo max | Know your budget BEFORE shopping
  • 1.4NEW 2025

    NEW: Auto Loan Interest Tax Deduction

    Under the One Big Beautiful Bill Act, you can deduct up to $10,000/year in auto loan interest

  • Effective for loans originated after 12/31/2024, through tax year 2028
  • Key Qualifications

    • NEW vehicles only — used car loans and leases do NOT qualify
    • Vehicle must have final assembly in the United States (VIN starts with 1, 4, or 5)
    • Personal use only — no business or commercial vehicles
    • Phases out at $100K income (single) / $200K (joint filers)
    • Available even if you take the standard deduction (no itemizing required)
    • You must include the Vehicle Identification Number (VIN) on your tax return
  • Source: IRS.gov — One, Big, Beautiful Bill Act (Public Law 119-21, signed 7/4/2025). Consult a tax professional.
  • 2.1

    Know Your Needs Before Buying

    Buy what you need, not what you want — the savings over time are enormous

    Gas prices are spiking: $3.48/gal nationally (AAA, 3/9/26), up from $2.90 a month ago. Factor fuel economy into every purchase decision.

  • Is it worth the extra cost and fuel for a larger vehicle you'll rarely use fully?
  • EVs aren't for everyone yet — think about charging infrastructure, range, and speeds
  • Consider TOTAL cost of ownership: fuel, insurance, maintenance, and depreciation
  • 2.2

    How to Find the New Car You Want to Buy

  • Configure your ideal car on the manufacturer's site — know which options are flexible
  • If it's not available, shop lot inventory or vehicles in transit — cars on the lot = leverage
  • As a last resort, factory order your car
  • 2.3

    How to Find the Used Car You Want to Buy

  • Search for key data: CarEdge Target Discount, Fair Price, Days on Market, Price History
  • Credit access is at a 3-year high (Cox Auto, Feb 2026) — more financing options available
  • Subprime share hit 17.5% — lenders are loosening, which means more risk for you

    ALWAYS get a Pre-Purchase Inspection (PPI). No PPI allowed = walk away.

    3.1

    Prepare to Contact the Dealer

    Negotiate the out-the-door price, not the monthly payment.

  • OTD includes everything taxable: selling price + fees + add-ons
  • Expect OTD to be about 10% higher than the listed selling price
  • Example: a $30,000 car is likely ~$33,000 out the door
  • If a dealer only talks monthly payments, they're hiding the real cost

    You can do ALL of this remotely via email. If a dealer requires you to come in just to get a price, find a different dealer.

    3.2

    Who to Contact at the Dealership

  • The most direct way to do business is with the sales manager
  • Salespeople and internet departments don't have authority to negotiate like a sales manager
  • Use email, not phone calls — you get a paper trail
  • Avoid 'phone tag' even if the salesperson pushes for calls
  • If a dealer won't negotiate remotely, find one who will — use our Dealer Transparency Index

    3.3

    Setting the Tone

  • Be very specific with what you need — no fluff
  • Establish control from day 1 by getting everything in writing
  • Stay in email/text — paper trail + time to think
  • Contact 3–5 dealers simultaneously and let them compete

    You should never have to visit a dealership to get a price. Do it all from your couch.

    4.1

    Negotiation Fundamentals

  • Use your leverage: competing offers, days on lot, market data
  • Show what you know — dealers respect informed buyers
  • Negotiate with respect, while understanding market conditions
  • Never reveal your maximum budget to the dealer.

    4.2

    Show What You Know

  • "I see invoice on this vehicle is $X. Can you work toward that?"
  • "This car has been on your lot for 84 days. What can you do on the OTD?"
  • "I have 3 quotes from other dealers. What's your best OTD price?"
  • "I'd like everything in writing — selling price, fees, and add-ons itemized."
  • 4.3

    Negotiating a Used Car

  • Know your local market conditions before negotiating
  • Days on lot + similar vehicles nearby + price history = your leverage
  • If a dealer won't let you get a PPI, don't do business with them.

    4.4

    Trading In Your Car

    Come prepared with multiple offers from online car buyers (Carvana, CarMax, KBB Instant Offer)

  • In most states, a trade-in lowers the sales tax on your new car
  • Think of your trade-in as a separate transaction to stay focused on the deal
  • Tax savings example: $35K car with $10K trade-in = $25K taxable. At 7% tax, you save $700.
  • 4.5

    The Test Drive

  • Insist on a longer test drive — highways, rough roads, parking
  • It's not a deal until you get an independent PPI

    The two most important Deal School takeaways: (1) OTD price (2) Always get a PPI

    4.6

    Final Negotiations

  • Use your leverage to negotiate OTD further — it won't always work, but try
  • State your target clearly: "I'll close today at $X out the door"

  • An extra $500 off is often reasonable — many dealers will do it to close
  • "Dealer B offered me $X. Can you do better?" — your strongest move
  • Your happiness matters — but don't overpay. Know your walk-away number before going in.
  • 5.1

    The Purchase Order

    It's not over yet. The finance office is where dealers make much of their profit.

  • The finance 'back-end' is where add-ons and rate markups happen
  • You'll complete a credit application here if financing
  • Read EVERYTHING before you sign — every line item, every fee

    5.2

    Welcome to the Finance Office

  • The finance office is where deals get done — or undone
  • The finance manager closes the deal, not the salesperson
  • Think smart and stay patient. This is round two.

    5.3

    Credit Applications and Interest Rates

    Never give your SSN until you're ready to apply for a loan

    Ask about the buy rate — the finance manager will know you mean business

  • Credit in the 600s? Ask if a tier bump is possible for a better rate
  • The buy rate is the lender's actual rate. Dealers mark it up for profit.
  • At today's average of 9.41% (Cox Auto), even a 2% markup on a $35K loan costs ~$1,800 extra
  • "What's the buy rate?" — This one question signals you know how the game works.

    5.4⚠ High Risk

    Negative Equity: What to Know If You're Underwater

    58%of borrowers now have negative equity — an all-time record (Cox Auto, Feb 2026)
  • Negative equity means you owe more on your current loan than your car is worth
  • If you trade in with negative equity, that balance rolls into your new loan — making it even larger

  • This is how people end up owing $40K on a $30K car. Avoid this trap.
  • What to do: pay down your loan before trading, make a larger down payment, or wait until you're right-side up

  • Fair/poor credit? You can still demand the buy rate. A co-signer may help but isn't always necessary.
  • Check your credit for free at AnnualCreditReport.com before the dealership
  • 5.5

    Outside Lending and Paying Cash

    Credit unions often beat dealer rates — shop around first

  • Come prepared with a pre-approval letter showing rate, term, and amount
  • Dealer financing incentives (like 0% APR) may beat your outside rate — compare both
  • Paying cash? Ask what payment methods they accept (no credit cards)
  • If the auto loan interest deduction applies, financing a US-assembled new car may save you more than paying cash

    5.6📱 Use in Finance Office

    The F&I Menu Products

    Every product on the menu costs you — remember your base payment

    NEVER let them tie your interest rate to a product. That's non-compliant.

  • Always take home a copy of every contract
  • The finance manager needs YOUR deal for their paycheck — they're willing to negotiate

    Tap any product to see Ray's verdict