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Guide to Buying, Selling, and Trading EVs
If you’re looking for a new car, you might be tempted to investigate a new or used electric vehicle (EV). An EV is powered entirely by electricity that charges your battery at charging stations. There are a number of unique factors that must be considered as a result, such as the lifespan of the battery and the location of charging stations.
There are many aspects to consider when you’re looking into buying, selling, and trading EVs. Today, we’ll take a look at everything that you’ll encounter as you start shopping around for electric vehicles.
Is Owning an Electric Car the Right Decision?
Buying an electric car might be the right purchase for you, but it’s also not for everyone. Instead of simply heading off to the nearest Tesla dealership to check out the latest models, it’s important to take some time to consider a few unique factors that will bring entirely new variables to the car buying equation.
Just like buying a traditional car, buying an EV requires plenty of time and research before you head to the dealership. In this electric car buying guide, we’re going to go over some of the prime factors that you need to consider before you buy this type of car. We’ll cover home charging, the importance of range, and whether an electric vehicle really saves you that much money.
Is Home Charging an Option?
One of the biggest perks of an EV is also its biggest downside: No gas. While this does mean that it will have a cheaper cost-to-own, it also means that you can’t fill up on your way to work in the morning when you need a boost. You will need to be able to charge your car either at home or somewhere that’s conveniently close to your home.
If you are on a standard 120V electric circuit, it would literally take days to charge your vehicle. These breakers aren’t even rated for the number of hours it would take to charge your car fully. Instead, they are most commonly used to run your standard appliances and electronics in your home.
The other option is a 240V electric circuit. On these breakers, you can have a Level 2 charging station installed that will most likely fill you up — or at least get you close to full — every single night. Your electric oven, dryer, and central AC run on 240V.
Either option comes with a home charging setup that can be purchased and installed by a number of companies. Exact prices will vary, but as a general rule for this electric car buying guide, set aside about $1,000 to $2,000 to install a home charging station.
How long do EVs take to charge? The exact answer will vary based on the vehicle, charger, and amount that needs to be charged. On average, most vehicles take about eight hours to charge fully.
The latest and greatest charging stations put out enough power to easily stop a heart. Keep in mind that your car has an inherent charging capacity that will restrict how much power can flow between the charging station and your car. This can matter greatly when you’re buying an electric car.
You need to keep electricity rates in mind for your home, as well. Electric vehicles are measured in kilowatt-hours per 100 miles, notated as kWh/100 miles. In order to figure out how much it’ll cost to have a given car charge at your home, multiply your vehicle’s kWh/100 miles rating by the rate you’re charged for electricity at the times that you’re most likely going to be charging.
Does Range Matter to You?
In reference to EVs, range is used to describe how far a car can go on one charge. For quite some time, the lack of a comprehensive charging network was a large deterrent to the adoption of EVs. While it will certainly depend on your area, this problem has been resolved for much of the country.
You’ll need to consider where you usually drive if you plan to charge at home. You will also want to consider how often you take road trips to decide if the range limitation is even an issue for you.
For anyone looking for a nice easy daily-driver, the range might not be that big of a deal. Even people who take regular road trips should look up the network of charging stations before being deterred, since the network has grown substantially in recent years.
Electric Car Buying Guide: Cost to Own an Electric Car
Some people are drawn to EVs for their environmental friendliness. You won’t be chugging gas every time you head to the grocery store, so many people also assume that this will directly translate into saving money. However, with other maintenance purchases taken into consideration, does this assumption hold true?
Consumer Reports recently found that the average EV owner saves over $800 to $1,000 per year on fuel costs over an equivalent gas-powered car. We assumed there’d be some savings in this arena!
Maintenance and repair were also found to be about half of the amount necessary for gas-powered vehicles, with an average savings of approximately $4,600 over the life of the car.
Depreciation has traditionally hit EVs harder than gas-powered cars, but newer reports are indicating that the new lines of EVs are on par with gas-powered cars for depreciation. Teslas also tend to hold their value well, making a strong case for buying a Tesla.
Ultimately, the true cost of ownership will be different for everyone. There will be variance in how quickly your car depreciates, what you can expect costs for repairs and maintenance to be, and fuel costs.
Based on Consumer Reports, the cost to own an electric car is generally lower than a gas-powered car; however, that isn’t necessarily true of all-electric vehicles. You’ll need to research your exact cost and be satisfied with those prices before you buy an EV.
Our electric car buying guide wouldn’t be complete without mentioning that insurance rates for electric vehicles are often higher than their gas-powered equivalents. This means you need to remember to get insurance quotes while you’re shopping around.
Should You Buy a Used or New Electric Car?
Deciding between a new or used EV is a tough choice to make. Much of the traditional advice applies here, such as obtaining a pre-purchase inspection and considering a CPO if possible.
One of the main unique aspects to consider is the life of the electric battery that powers your entire car. Replacing this battery is akin to replacing an engine in a gas-powered car. This means that when you buy a used EV, you will often have fewer miles on your electric battery.
EV cars also have the potential to make you eligible for a $7,500 tax credit. Assuming that you are eligible for this credit, this can significantly offset the cost of a new EV. Only 200,000 credits were given out to each manufacturer to provide as an incentive for buying a new EV. However, many of these credits have already been awarded, and the number of credits available will need to be increased at the federal level.
Depreciation is also a factor to consider. The value of new cars depreciates once they trade owners. If you buy a new car, you’re guaranteed to lose money on depreciation, but the trade-off is that you’ll get a brand-new electric battery and the latest technology in your vehicle.
There’s a great opportunity for a flexible buyer in the used electric vehicle market. After three years or so, many electric vehicles are traded in or sold out of the desire to buy something new. Many EV owners want the latest and greatest cars out there, especially when they know they’ve been piling up mileage on their batteries. As such, there is an excellent market of used EVs available.
Leasing or Buying an Electric Car
We can’t talk about buying EVs without bringing up leases, too. There are two main points that need to be addressed when you’re considering leasing or buying an electric car.
Drained Batteries
EV batteries can cost about the same as a new engine when they need to be replaced. As such, never having to replace them can be quite advantageous. This is a major benefit of leasing a vehicle over owning an electric car. Once your lease is over, simply trade it in for a car with fresher batteries.
Outdated Technology
This point is technically true for any lease, but the technological differences that EVs have between model years are more significant. A few years of EV evolutions could greatly increase charge speed, expected distance of travel on a single charge, and battery life. Leasing to constantly have the best technology in each of these categories is well worth considering.
Look Beyond Buying a Tesla
Tesla didn’t invent electric vehicles, but its impact on the marketplace cannot be understated. Their success launched EVs into the spotlight, and now, there are EV options from many major automakers.
Let’s take a quick look into the ways that major automakers are adapting and evolving with their EVs:
- General Motors: Aiming to sell one million EVs by 2025, GM has gone all-in.
- Ford: This automaker already offers a handful of EVs and continues to keep developing more.
- Nissan: With over 500,000 Nissan Leaf EVs sold since 2010, Nissan is still pushing to sell one million EVs by 2022.
- Honda: Honda is looking to have two-thirds of all of its auto sales become electric by 2030, including hybrids, plug-in hybrids, and EVs.
- Toyota: They got an early lead on the hybrid market and they’ve carried it over to the EV market with a goal of 5.5 million EVs by 2030.
- Volkswagen: Over the next five years, this automaker is going to spend $85 billion in EV development.
- BMW: With a few EV models currently available, BMW aims to have EVs account for 15% of its sales in the coming years.
- Hyundai: This automaker has goals to sell 1 million electric vehicles by 2025.
- Kia: The goal for Kia Motors is to have EVs make up 25% of global sales by 2029.
With plenty of money being invested into EVs and a large amount of these vehicles currently in operation, we expect to see EV sales soaring throughout the next decade.
While Tesla is more like buying an iPhone, other manufacturers sales are similar to their gas-powered counterparts. See our guide to buying a car in 2021.
Is an EV Right for You?
Is buying an electric car the right move for you? As with many questions that relate to the car buying experience, the answer is: It depends.
As you’ve seen in our electric car buying guide, there are unique factors to consider at every step of the way. While many aspects of buying an electric car are the same as buying a gas-powered car, there are some unique points to consider. Put in plenty of time into researching charge locations and electricity prices, along to your standard car research if you plan to buy an EV.
Myths That First-Time Car Buyers Believe
Car-buying myths seem to be just as common as urban legends. Nobody knows how these myths get started. We’re willing to bet they get started when someone misunderstands the terms of a deal or when they misunderstand car buying in general. First-time car buyers can start their experience off right when they don’t let these common myths get in your way!
We’ve gathered five common car-buying myths that you may have heard at some point in your life. We’ll take a look at each myth and pull it apart to find out why it’s incorrect. Let’s get started.
Myth #5: Buying a Car in the Rain
For some reason, buying a car in the rain has become a rock-solid piece of car-buying advice for some people. Every first-time car buyer beware: The rain has no impact on car sales! This idea is based entirely on the belief that car dealerships will be slow on rainy days, so they’ll be desperate for sales.
In truth, this myth has been around for so long that some car dealerships have reported being busy on rainy days. Let’s put this myth to rest and stop flocking to car dealerships when it rains.
Myth #4: Buying Cash Will Get the Best Price
We’ve all heard that “cash is king,” and while that’s true in some areas, car buying is not one of them. This myth implies that you’ll receive a better price if you walk with a briefcase full of $100 bills and offer to buy your dream car using cash.
It might seem like a car salesperson would be all over that, but in actuality, you may get a worse deal than the next customer who is financing their purchase.
When you finance a car, the car dealership is able to bake in some profit into your loan. Financing is one of a dealership’s main profit streams. As such, dealerships are more motivated to make a deal with someone who is going to finance their car than someone who is going to pay in cash.
Learn the dealer lingo. Check out our F&I office glossary of terms.
If you want to pay for a car using cash, finance it at the dealership and make sure there is no prepayment penalty. Then, pay it off in full a few weeks later. It’ll work in the same way as it would if you had bought the car with cash, but you’ll receive a better deal.
Myth #3: Buy Now or the Deal Will Disappear
One of the main pieces of car-buying advice that we always tell first-time car buyers is to walk away if you don’t feel comfortable with a deal. As strange as it may seem, buyers can get stuck in the mentality that walking away means they’ll lose out on the car. That’s why this car-buying myth has been around for so long!
Yes, walking away from a deal will mean that you won’t get that specific deal. But next week or next month, chances are that you can get an extremely similar deal. That’s why we always recommend talking to multiple car dealerships.
The only exception to this myth comes when you’re after a limited make and model. If there’s a chance that the dealerships will run out of the car you’re after, then this myth may actually be true for you.
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Myth #2: Buying Used Will Save You Money
One of the most popular car-buying myths is that used cars are the best way to buy. The idea comes from the fact that the value of the car has already depreciated, so you’ll be buying a car that’s closer to its true value.
While there is some truth here, you shouldn’t rule out buying a new car in total. You also need to consider the cost of maintenance and upkeep that comes with a used car.
Most importantly, you’ll have far more lending options if you go for a new car. Because dealers are incentivized to reduce the time on the lot for new cars, they may be more willing to negotiate on the price of a new vehicle.
Myth #1: I Don’t Know Enough to Negotiate
Some first-time car buyers think that negotiation is a matter of knowing specific key phrases that will turn the tide in their favor. While knowing what to say and when to say it does help, knowing the value of the car that you’re buying and being confident and firm is actually the thing that is the most important.
There’s no knowledge threshold to keep you from being a skilled negotiator. Use our member solutions to determine how much you should be paying for a new or used car and confidently remain within the realms of the deal that you’d like to land.
Unraveling common car-buying myths can help you to win in negotiations. While some of the myths have nuggets of truth in them, others are legitimately bad advice. Stick with the sources that you can trust for quality advice about how to score a great deal.
Ford Invoice Prices & Ford Employee Pricing (Updated for 2021)
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Whether you’re buying a Ford F-150 or a Ford Explorer, knowing the invoice price that a Ford dealer paid for the vehicle is important for negotiations. Knowing the Ford employee pricing plans can also be valuable. Car dealers make the most money on customers who are ill-informed. Well, here at CarEdge we’re determined that make sure every customer is informed. That’s why we’re excited to share our repository of all Ford invoice prices for 2021.
If you have an invoice from a Ford dealership and you want to submit it to be added to this page, please email me directly: zach (at) yourautoadvocate (dot) com. Please put “FORD INVOICE” in the subject line.
Now on to the fun stuff …
How to read a Ford invoice
Ford’s dealer invoices are relatively simple to comprehend. There are four things we want to look for on a Ford factory invoice:
- The markup from invoice price to MSRP
- The dealer holdback amount
- The floor plan assistance amount
- The advertising association amount
Those are the four critical pieces of information you’ll want to know before negotiating a deal on a new Ford. The spread from the Ford invoice price to the MSRP can be calculated by looking at the middle of each dealer invoice. The dealer holdback is labelled “HB” at the bottom of the invoice. Floor plan assistance is labelled FPA. Advertising association assistance is AA.
Ford employe pricing (A & Z plan, D plan, and X plan) are all listed on the invoice as well. The A & Z plan pricing is what a Ford employees (and retirees) pay. For X plan pricing is what you’d get if you went through Costco, or another affinity group. D plan is what dealership employees pay.
2021 Bronco Sport Invoice Price
Click here for the 2021 Bronco Sport invoice.
2021 EcoSport Invoice Price
Click here for the 2021 EcoSport S invoice.
Click here for the 2021 EcoSport SE invoice.
2021 Escape Invoice Price
Click here for the 2021 Escape invoice.
2021 Explorer Invoice Price
Click here for the 2021 Explorer Limited invoice.
Click here for the 2021 Explorer Platinum invoice.
Click here for the 2021 Explorer ST invoice.
Click here for the 2021 Explorer XLT invoice.
Click here for the 2021 Explorer Base invoice.
2021 F150 Invoice Price
Click here for the 2021 F150 2WD Supercrew XL 2-7L invoice.
Click here for the 2021 F150 2WD Supercrew XLT 5L invoice.
Click here for the 2021 F150 4WD Supercrew Lariat 3-5L invoice.
Click here for the 2021 F150 4WD Supercrew Lariat 5L invoice.
Click here for the 2021 F150 4WD Supercrew XL 2-7L invoice.
Click here for the 2021 F150 4WD Supercrew XLT 2-7L invoice.
Click here for the 2021 F150 4WD Supercrew XLT 3-5L invoice.
Click here for the 2021 F150 4WD Supercrew XLT 5L invoice.
Click here for the 2021 F150 4X4 Crew XLT 7-3L invoice.
Click here for the 2021 F150 4×4 Supercrew King Ranch 3-5L invoice.
Click here for the 2021 F150 4×4 Supercrew Limited 3-5L Hybrid invoice.
Click here for the 2021 F150 4×4 Supercrew Platinum 3-5L invoice.
2021 F250 Invoice Price
Click here for the 2021 F250 4×4 Crew King Ranch 6-7L invoice.
Click here for the 2021 F250 4×4 Crew Lariat 6-7L invoice.
Click here for the 2021 F250 4×4 Crew Platinum 6-7L invoice.
Click here for the 2021 F250 4×4 Crew XL 6-2L invoice.
2021 F350 Invoice Price
Click here for the 2021 F350 4×4 DRW Crew Lariat 6-7L invoice.
Click here for the 2021 F350 4×4 SRW Crew Lariat 6-7L invoice.
2021 F450 Invoice Price
Click here for the 2021 F450 4×4 Crew Lariat 6-7 invoice.
2021 Ranger Invoice Price
Click here for the 2021 Ranger XL Supercab invoice.
Click here for the 2021 Ranger XLT Supercrew invoice.
2021 Transit Invoice Price
Click here for the 2021 Transit Connect XL invoice.
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3 signs you should walk away from a car deal
Undoubtedly, buying a car is one of the most challenging purchases you’ll ever endure (the key word here is “endure,” because it really can be a test of wills to buy a car). For many, purchasing a car, truck, or SUV is the second largest expense they’ll ever have, second only to buying a home. You’d think that spending such a large amount of money would be a happy and joyous occasion … The reality of buying a car couldn’t be further from that aspiration.
Buying a car is certainly a lot different than when I first started in the car business in the 1970’s. We’ve seen a lot of changes that are for the better (and quite a few that are for the worse), but no matter how you look at it, buying a vehicle is still one of the most frustrating things we have to do every few years. I sold cars for 43 years, and even I think the buying process is annoyingly aggravating.
That being said, there is a difference between getting annoyed, and getting taken advantage of, and my goal today is to help you avoid the latter. There are a few telltale signs of a shady car deal, and my hope is that you never experience any of them. That being said, there’s a strong likelihood that you will, and in an effort to help you protect yourself, I’ve written this guide.
Without further ado, let’s dive into the three signs you should walk away from a car deal.
The seller won’t show you a CarFax or reconditioning report
Regardless of if you’re purchasing from a private party or from a car dealership, if the seller of the vehicle won’t show you a CarFax report or the reconditioning repair work, that’s a sure sign that you should walk away from the car deal.
When car dealers buy used cars (either as trade-ins or from auction) they inspect them to make sure they are in good condition for sale. Typically this entails some “reconditioning” work. Reconditioning is the industry term used to describe the process of getting a vehicle “showroom ready”.
If a dealer won’t show you the repair order for the reconditioning work that’s a telling sign that you should walk away from the car deal. It begs the question “What is the dealer trying to hide?”
The same thing goes for when you buy from a private party. If they won’t share previous service records and an up to date CarFax, that’s a red flag and clear sign that you should walk away. Poorly maintained vehicles can be a seemingly endless money-pit, and you don’t want to be the one paying for a laundry list of future repairs simply because a seller didn’t maintain their car well or disclose to you issues it had that would be apparent on a CarFax.
This rule applies to purchasing vehicles from rental car companies as well. It’s well known throughout the automotive industry that the CarFax reports on rental cars can be lacking in detail. This is because CarFax collects information about every vehicle from their network of data providers. Rental car company owned repair shops are not a CarFax data provider, meaning CarFax is “in the dark” when it comes to a lot of the history of a rental car. That being said, it’s of the utmost importance that the rental car company shares with you the service records and reconditioning repair work done on a vehicle.
Another thing to recognize as a “red flag” is if the dealer adds an erroneous “reconditioning fee” to the selling price of the vehicle. The dealer’s cost to recondition the vehicle is already factored into the selling price, so an additional “reconditioning fee” is simply an attempt to make extra profit off of you. Again, this is a sign to walk away from the deal.
They won’t let you get a pre-purchase inspection
If the seller of the vehicle won’t let you get a pre-purchase inspection completed on the vehicle, this is a tell tale sign that you should walk away from the deal. Again, it begs the question “what is there to hide?”
Obviously if you are purchasing a new vehicle you will not get a pre-purchase inspection completed on a car, however for any used vehicle (even a certified pre-owned) you should consider a pre-purchase inspection, and if the dealer or seller won’t allow it, you should walk away.
Recognize that not every car dealership will allow you to drive a car to your mechanic’s shop to inspect the vehicle. This is different from them not allowing the inspection to take place at all.
Some dealerships have policies that restrict their willingness to move vehicles around to a mechanic’s shop for pre-purchase inspections. That being said, they should allow you to have the mechanic come on site, or be willing to take the vehicle to the mechanic’s shop if you put down a refundable deposit on the car. Some dealerships are nervous that if they take a car to a mechanic’s shop for a pre-purchase inspection they may miss a potential customer who is interested in buying the car while it is away.
During my 43 years in the business I never had an issue allowing a customer to get a pre-purchase inspection. I gladly endorsed it. Typically we would have one of our lot attendants drive the car to their mechanic’s shop to make it easier on the customer. If a dealer is unwilling to support your pre-purchase inspection desires, again, that is a sign to walk away.
They offer you different prices depending on if you finance with them or not.
This tactic, to offer two different prices that are dependent on you financing your vehicle with the dealership, is not only unethical, but counterproductive to being customer-centric. Advertising a price that requires a customer (you) to finance through the dealership so that the dealership can make extra profit is not illegal, but it’s certainly close to the line!
It’s well known that car dealerships make most of their money from the “back-end” of a car deal. This is where they sell insurance products (like an extended warranty), and originate loans. If the dealership where you are looking at buying a car wants to charge you more for the car if you have your own financing, to me, that’s a red flag.
This also applies to other insurance products (like extended warranties). Let’s say you’ve negotiated a price with your salesperson and you’re now in the F&I (finance and insurance) office. The F&I manager tells you that you can get an extra half of a point off of your interest rate on the loan if you buy their extended warranty. What do you do? You get up and walk away!
Tactics like these are simply signs of car dealerships that are looking to take advantage of their customers. Again, they’re not illegal, but they certainly toe the line.
Bonus fourth reason to walk away from the car deal: they charge ridiculous fees
Buying a car is the polar opposite of any other purchase we make. When you go to the grocery store and buy some cereal you pay the price of the cereal and sales tax, that’s it.
When you buy a car you pay for the price of the car, and then a laundry list of fees (some of which are legitimate, many of which are bogus). As a car buyer, how are you supposed to know what’s fair and legitimate, versus something that is purely dealer profit?
I’ve written about legitimate and illegitimate car dealer fees in the past, but it’s worth restating them here. Specifically stay away from dealers that try and charge you any of these fees:
- Nitrogen fees
- Reconditioning fees
- Additional destination fee
- Cash up-charge
How Do I Know If I Got A Good Deal On a Car?
Buying a car is extremely confusing. There are add-on offers, sales prices, the out the door price, special rebates … The list goes on and on. By the time you finally agree to the numbers, you’re left wondering, “How do I know if I am getting a good deal or not?”
And then, after the arduous task of negotiating and agreeing to a selling price with your salesperson, you’re hit with even more numbers, products, and offers in the finance and insurance office.
Answering the simple question, “Am I getting a good deal on a car?” Is comparable to rocket science! It’s truly ridiculous!
Here are our suggestions for how you can answer the burning question: How do I know if I am getting a good deal on a car? If you prefer to watch instead of read, simply click on the video above.
Let’s dive in.
Are You Getting a Discount off the MSRP?
Generally speaking, no one should pay full price for a car. Nobody. Unless you’re buying the most in-demand vehicle on the planet, you should really get some sort of discount off the MSRP.
Speak the same language as the car dealer. Read more: The Car Buyer’s Glossary of Terms, Lingo, and Jargon
MSRP stands for Manufacturer’s Suggested Retail Price. It’s the dollar amount that the manufacturer tells the dealership that they should charge for a new car. New is an important word here … You’ll never pay the MSRP for a used car, but many times car dealers will try and sell new cars for their MSRP price. You shouldn’t pay that much.
One of the clearest ways to answer the “How do I know if I am getting a good deal on a car?” question is to look at the discount you’re receiving from the dealership. How much are they deducting from the MSRP? Finding this answer can be challenging, and that’s why we always recommend asking for an itemized out the door price quote from the dealership (something like what you see below), so that you can clearly see the dealer discount.
If you’re like most car buyers (who buy a car once every few years), it can be hard to determine how much of a discount you should be receiving from the dealership. This is exactly why we built the Market Price Report, to help you understand what a “good deal” looks like for the chosen vehicle. Getting $2,000 off the MSRP might be asking too much for your future car, but it could also be asking too little. Enter a VIN and see what the suggested offer is.
Do your research before you head to the dealership. You should have a sense for how much of a discount you can receive before stepping onto the lot. If the dealer won’t give you any discount off the MSRP, leave and try another dealership. They likely aren’t the only dealership selling that car within 100 miles, and it’s worth shopping around for someone who will work with you. If you’re buying used it can be a slightly different experience, but the same principle applies; you should be able to get some discount from the selling price.
Are You Paying for Anything You Don’t Need?
When you buy a car, be prepared for an avalanche of add-ons and accessories. Car dealers have found new ways to make extra money, and adding all sorts of ancillary products into your car deal is one of the most common tactics.
Are you prepared to say no? Or do you actually want what’s being offered? This is one factor to examine when asking, “How do I know if I am getting a good deal on a car?”
Let’s break down the common offers that you’ll receive at most car dealerships:
- GAP insurance. If you’re financing your car, you better believe that you’ll be offered GAP insurance. Short for Guaranteed Asset protection, this is a special type of insurance that we hope you’ll never have to use. If your vehicle is totaled in an accident, your normal car insurance will give you a payout based on the market value of your car. But what if you still owe more than the market value? That’s when GAP insurance steps in; it’ll cover the rest. Understanding whether or not you actually need it depends on how much equity you have in the car when you drive it off the lot. If you put $500 down and financed the rest, you need GAP insurance. If you put 50% down, you probably don’t.
- Prepaid maintenance plans. These plans cover all the standard maintenance that your new car will need for the duration of the agreement. This means oil changes, air filters, and maybe a belt here and there, which can actually save you money since dealerships discount their service rates to ensure your return business. That’s right, these plans are pretty much dealership retention tools. They can be a win-win though, depending on the price. Since they discount their service rates to keep you coming back, you could very well end up getting the cheapest oil changes in town.
- Vehicle Service Contract (VSC). Colloquially known as an extended warranty, a VSC provides longer coverage than the manufacturer’s warranty. We tell everyone to never buy these at dealerships (at least not at list price). Not only are they marked up substantially, but they begin when you buy them. If you’re buying a new car you’ll already have a manufacturer’s warranty, which means you don’t even need it until after the three years or 36,000 miles. (There is still a reason to buy one on a new car, but don’t expect dealers to explain this to you). You also need to consider if you’re going to keep the car past the included warranty, or if you want to get rid of it in a few years. Keep in mind that you can add a VSC to your car several years down the road; you don’t have to do it when you buy the car. How do I know if I am getting a good deal on a car? If you’re buying the VSC at the dealership, the chances are that you are not getting a good deal.
Prepare yourself for each of the above offers; you’ll be seeing them. Make sure that you come ready with your answers. Be firm and confident with your decisions, and don’t leave any room for overcoming objections.
You should also feel comfortable pushing back on unnecessary and egregious fees. We explain what fees you should and shouldn’t pay for in this article.
Are You Getting a Discount On F&I Offers?
Agreeing to the selling price of a vehicle is only part one of your car buying saga. Part two comes when you enter the F&I office. That’s where you’ll receive the offers we discussed above.
Let’s say you actually want some, or all, of their ancillary products. Do you simply say yes? Of course not; you need to negotiate! How do I know if I am getting a good deal on a car? Discounts on ancillary products are a pretty clear indication.
The VSC (a.k.a extended warranty), GAP insurance, maintenance plan, and anything else they offer you are all negotiable. Don’t accept their numbers at face value (especially when they’re rolled into your monthly payment). Let them know you’re interested in each offer for X amount or not at all. Play hardball with them; you can bet they’ll do it with you. Use everything you’ve learned about negotiating to your advantage and get the deal you deserve.
If you’ve already purchased your car and think that you could’ve gotten a better deal on some of the F&I products, check your agreement. Most F&I products have a cancellation policy where you can get your money back if you cancel within a set period of time.
One of the most important things that we can teach you is that you always have the most powerful negotiation tool in your back pocket: you can choose to walk away. There’s nothing keeping you at the dealership and nothing making you go through with a deal that you don’t feel comfortable with.
Are You Happy with The Deal?
A good deal is a state of mind. We can talk numbers and discounts all day long, but if you’re not happy with what’s being offered, it’s not a good deal.
If you are happy, and the dealer is happy, it’s a good deal for everyone. Sometimes, it’s as simple as that. You don’t need a 50% discount and a free extended warranty to brag about your amazing deal. You only need to be happy with the car you bought and the terms of the agreement.
How do I know if I am getting a good deal on a car? It boils down to your state of mind when you drive away in your purchase. If you feel remorse, it was a bad deal. If you’re happy, it’s a good deal. If you haven’t made your purchase yet, imagine how you’d feel with X price versus Y price. Which number should you shoot for to seal the deal and drive away with a smile?
At the end of the day buying a car is really difficult, and we empathize with you greatly. By taking the time to even read this article you have educated yourself more than 99% of all car buyers. The likelihood that you’ll get a good deal has increased exponentially thanks to the fact that you have researched and informed yourself about the car buying process.
