Get access to the same vehicle valuation tool that dealers rely on. With Black Book, you’ll have insider data to accurately assess trade-in and purchase values—empowering you to negotiate the best possible deal.
Buying a car is no easy task. Buying a car long distance from a dealer can prove even more challenging. For the average person, what to know when buying a car long distance from a dealer can be confusing and complex. Fortunately it doesn’t have to be.
Let’s discuss why you might find yourself buying a car from a dealer in a different region, what information you need to know, and what steps you should take.
Why buy a car from far away?
Let’s address the elephant in the room; why would you even want to buy a car from a dealer that’s not in your area? It’s likely that there’s a car dealership within a few miles of where you are right now. Why would you buy a car from someone on the other side of the country?
The simple answer is that the only car you could find that matches all your criteria is somewhere far away. The more complex answer could be that the non-local dealer offered a better price than the one nearby. Or, perhaps the non-local dealer has a car that has been converted into a certified pre-owned vehicle that actually offers a longer warranty than a brand new car (at a lower price).
For example, I remember one time when I purchased a 6,000 mile retired service loaner MDX that had been CPO’d. I ended up with a 5 year 60,000 mile bumper to bumper warranty, as opposed to the 4 year 50,000 mile warranty that came with it brand new from the manufacturer. Sometimes looking for cars like this can help you save money while still getting what you want (or more).
There are any number of legitimate reasons to buy a car from a dealer that is far away from you, and these are just a few of the most common.
When buying a car long distance from a dealer, get it inspected
I can’t say it enough, get any used car that you are buying from a distance inspected by an independent mechanic. Most franchised dealerships do a great job of inspecting and reconditioning their used cars, and you can (and should) ask them for the vehicles inspection and repair records. However, even with this information, it doesn’t hurt to get a pre-purchase inspection completed.
This is especially true if you are purchasing a car from a smaller used car lot. They may also be less willing to share repair orders with you.
How should you go about orchestrating a pre-purchase inspection when you live in California, and you just found your dream car in Idaho? It’s a lot simpler (and dealers are a lot more willing to help) than you might think.
Google is a wonderful tool when it comes to gathering information. This is undoubtedly true when it comes to finding a mechanic to inspect a potential used car purchase. Since you’ve found your car in a different region, it’s unlikely you know a mechanic that you trust to go over to the dealership and inspect it.
My recommendation would be to Google search to locate a qualified mechanic near the dealership to handle your pre-purchase inspection. Call them and let them know your situation (I live in California, and am looking to buy this car that’s near you, can you please inspect it, etc.)
Once you have a mechanic, and a car you would consider buying, make arrangements with the dealer to take the car to your independent mechanic for the pre-purchase inspection for you. Most dealerships will be willing to assist in moving a car from their lot to a mechanic’s shop to conduct the pre-purchase inspection. Don’t be afraid to ask them to do this.
I do have one note of caution with pre-purchase inspections. Your mechanic will find something wrong with the car. At the end of their day, it’s their job to find something. It could be something minor, it could be a little nit picky, it could be something that you need to take care of ASAP before you buy the car, just keep in mind that they will find something.
How do I actually get the car from a long distance dealer?
Do you go and pick it up? Do you get the car shipped to you? How the heck do you actually get the car you want to buy from a long distance dealer into your garage at home?
This is a matter of personal preference, and how much time (and money) you can set aside for such an endeavor.
During my 42 year career in the business, I had customers who travelled great distances by train and plane in order to pick up their new car to simply have the joy of driving it home. By great distances, we’re talking about several hundred, even up to a 1000 miles.
I also had customers who purchased a car from afar and made arrangements to have it shipped to them. For them, the “thrill” of driving hundreds of miles back home wasn’t worth the time it would take to get to the dealership and back. Many of my customer’s worked with Ship a Car Direct to get their cars delivered to them.
Those are your two options. If you’re unsure how to navigate this process consider letting us help. At CarEdge we’ll help you navigate the car buying process.
More cars are being bought and sold from afar
More and more dealerships are making it easier for you to purchase a car online. As the industry transitions from physical sales to ecommerce, there are bound to be changes in how people buy their cars.
One of the most popular tools that dealerships are using today to help with online sales comes from a company called Roadster. Roadster allows customers to seamlessly complete the entire purchase online. From inquiring about a particular car, to starting and completing the paperwork process, to making arrangements for shipping so that you never have to step foot into the dealership, Roadster provides the software to make it happen.
You could live in Seattle, purchase a specific Lexus that you found at a dealer in Pennsylvania, and do it all from the comfort of your home or office. The business model for how cars are being sold is changing dramatically. As someone once said, “it’s a small world, but I wouldn’t want to have to paint it.”
Keep in mind what we discussed above. What you need to know when buying a car long distance from a dealer isn’t as complex or challenging as you may have thought. Yes, there are a few more considerations, but they certainly aren’t insurmountable.
When it comes to cars, there’s a lot of jargon. So much so, that the already confusing process of buying a car, can get even more challenging for someone who isn’t well versed in automotive lingo. Throw in terms like monroney sticker, window sticker, and more on top of an already confusing subject matter, and you’re bound for frustration.
Fortunately, as with most things in life, these words and phrases aren’t actually as complex as they seem. Feeling confident when you buy a car is a must, and knowing the key words, phrases, and jargon that the dealer may throw around is a necessary step in that process.
Let’s explain the two terms above, the Monroney label, and the window sticker. Fortunately for you (as you’ll see in a moment), the two phrases refer to the same thing!
What is a car’s Monroney sticker?
This is a loaded question, but we have to ask it… Do you trust your average car salesperson?
Odds are, you don’t. When asked, “Rate the honesty and ethical standards of people in these different fields — very high, high, average, low or very low?” Gallup found that only 9% of Americans identify car salesmen as having a “high” or “very high” level of ethical standards. This was by far the lowest rating of all professions (even below “Members of Congress”). Ouch.
Why is this important? Because it is the entire reason Monroney stickers exist. A car’s Monroney sticker presents all of the features, options, and charges associated with every single new car in the United States. Before the Monroney sticker existed, customers had to trust the salesperson at the dealership to provide them with information about what a car included, and how much it cost. The Monroney sticker made that information accessible (and mandatory) for all new cars.
The Monroney sticker applies to all new cars sold in the United States. You’ll frequently also hear it referred to as a car’s window sticker. The two terms are synonymous.
Included on the Monroney sticker are key pieces of information. They include:
where the car was built (this goes so far as to provide the percent of country of origin for parts in the car, with the goal to provide the end user with the true amount of American based content in the vehicle.);
details about the car’s warranty;
engine specifications;
what options have been added (this only includes options from the manufacturer, any dealer installed accessories will be listed on a separate label next to the window sticker);
the Manufacturer’s Suggested Retail Price (MSRP);
the price of each individual option;
official EPA-endorsed fuel mileage data; and
crash test ratings.
As you can see, there is a lot of relevant information packed on the Monroney sticker, and again, with good reason!
Where did the Monroney sticker come from?
I remember the days before Monroney stickers existed… There was a time when Monroney stickers were only mandated for cars and not trucks. It really was like the wild west.
Who, or what is Monroney, and why is their name associated with all new cars sold in the United States? Oklahoma Senator Almer Stillwell “Mike” Monroney sponsored a bill called the Automobile Information Disclosure Act of 1958. This bill would lead to the creation of the Monroney sticker once it was signed into law by then president Dwight Eisenhower.
Monroney was a pioneer for consumer safety. He also sponsored the bill that would eventually create the Federal Aviation Administration.
As mentioned above, Monroney, or window stickers are required to have the following information:
where the car was built (this goes so far as to provide the percent of country of origin for parts in the car, with the goal to provide the end user with the true amount of American based content in the vehicle.);
details about the car’s warranty;
engine specifications;
what options have been added (this only includes options from the manufacturer, any dealer installed accessories will be listed on a separate label next to the window sticker);
the Manufacturer’s Suggested Retail Price (MSRP);
the price of each individual option;
official EPA-endorsed fuel mileage data; and
crash test ratings.
Dealers are not permitted to remove, modify or alter these stickers in advance of selling a car.
How to read a cars window sticker
Now that you know that a window sticker is required by law on all new cars in the United States, you’ll certainly be looking for it during your next dealership visit. Edmunds.com provides a great overview of where to look for each piece of information on the window sticker. Click here to view that article.
Free Car Buying Help Is Here
Ready to outsmart the dealerships? Download your 100% freecar buying cheat sheets today. From negotiating a deal to leasing a car the smart way, it’s all available for instant download. Get your cheat sheets today!
When you go to buy a car, don’t be surprised if the dealer you’re purchasing it from bought the car at an auction. The “ins and outs” of used car auctions remain unknown to many, however they aren’t too terribly complex. Many people have asked me “why do cars go to auction?”
Let’s explore that topic.
The short answer for why cars go to auction is to improve dealership profitability.
Car dealers are in the business of making money, and when they can’t sell a car to a consumer it’s more profitable for them to sell that car to another dealer via an auction, rather than wait for the right consumer to come along. This is an oversimplification, but a good starting point to keep in mind. Generally speaking, dealerships make most all their decisions based off of how it will impact their profitability.
The #1 reason cars go to used car auctions
As pre-owned, and in some cases new car inventory ages (sits on the lot unsold), dealers will often take those vehicles to the auction. Their goal is to turn that “dead” inventory into cash that can be used to buy other cars that they expect to sell faster. But why do dealers do this in the first place? What incentive do they have to get rid of “dead” inventory?
Most dealerships have strict pre-owned aging policies. This means that internal policies dictate how long a used car can stay on a dealership’s lot before it gets sent to the auction. A common practice in the industry is the 60 or 90 day rule.
If a used car isn’t sold within 60 or 90 days (this varies from dealer to dealer) management staff must get rid of the car. They have two options; either wholesale the car directly to another dealer, or more likely sell it at an auction. This is a nonnegotiable policy at many dealerships.
New Cars Sent to Auction
Sometimes dealerships will even send new cars that have not sold quickly enough to the auction. This doesn’t occur often but it happens. The rationale is to relieve themselves of excess new car inventory imbalances or aged new cars, and instead replace them with fresh merchandise that they think will sell more quickly to a consumer. The whole reason cars go to the auction is to ensure inventory balance at the dealership.
Cars go to used car auctions because dealers simply can’t sell them quickly enough to a customer at their storefront. Dealers are incentivized to sell cars sooner rather than later because of carrying-costs that diminish a cars profitability, and pressure from shareholders to show that they’re moving inventory quickly.
It’s important to also understand the pressure investors put on dealers to turn cars quickly. Inventory turn ratios are one of the key metrics dealerships are measured by. In any form of retail you want to “turn” your inventory as quickly as possible. Think for a moment, when was the last time you went to the grocery store and saw brown bananas for sale? In retail you need to price competitively and turn your inventory quickly.
If a dealership isn’t turning their inventory it is a sign to shareholders that they aren’t as efficient or profitable as their peers. With inventory sitting on a lot, the dealer has a significant amount of capital tied up in cars that aren’t selling. That means their money isn’t making them as much profit as it could. Remember, dealerships make nearly all their decisions from this point of reference; how can we maximize profits?
From time to time, dealerships will send customer trade-ins to the used car auction without first waiting 60 to 90 days to see if the car sells. There are a number of reasons for this.
Other reasons
Dealership staff accumulate knowledge and experience over time. With that experience comes the ability to know which makes and models will or won’t sell at their dealership. Prior experience with certain makes and models may have shown that certain cars simply aren’t popular on their lot. Off to the auction they go.
This varies from dealer to dealer. Location can play a major role in determining which cars stay and which cars go. For example, a sports car that gets traded in to a rural dealership will likely get sent to auction.
Mismatched inventory? Send it to auction
Sometimes a dealership will trade a luxury car that is simply too expensive for their taste. Those cars will be sent to an auction that specializes in those types of vehicles.
Another reason why cars go to auction is that after inspecting a vehicle for road worthiness and determining how much it would cost to recondition the vehicle, the dealer may simply deem it too expensive. When that’s the case, off to the auction it goes.
Often times dealerships trade cars that are too old, or have too many miles. When this is the case, a dealer may have no real intention of keeping the car. Instead they simply ship the car off to the auction as soon as possible.
In Conclusion
As you can see there are no shortage of reasons why cars go to auction. Dealerships send cars to the auction to get rid of aged units, because they just want cash to buy something different, or merely to balance their inventories for maximum return of investment. The reasons are as valid as they are varied, and the auctions remain a valuable tool for dealerships to use.
Knowing what to bring with you when buying a car can be one of the most intimidating aspects of the process. You know you’re serious about buying a new car, but you aren’t 100% sure what documents you need to have with you when you step foot in a dealership. That’s a-okay. We’ve all been there before.
What to bring with you when buying a car depends on your situation. Are you trading a car in? Financing your car? Do you have a co-signer? There are certain things you’ll want to have with you when you go to the dealer.
Let’s dive into each of the items you should bring with you when buying a car.
If you’re trading in your car…
If you have a car to trade in, bring the title (if you have it), and make sure the car is titled in your name. A lot of people don’t realize that you can’t trade in a car that isn’t titled in your name. That means if you’re married you can’t trade in a car titled in your wife’s name without your wife being there. The name on the title and registration must match, if they don’t you can’t trade it in.
Also, don’t forget all sets of keys! Most cars have two sets of keys, unless one was lost.
If the vehicle is paid off, bring all the documents to confirm that the loan has been paid, and bring the current registration and valid insurance card. Oh, and don’t forget your driver’s license.
These are your “must haves” for trading in a car.
What to bring for a down payment…
If you plan on putting money down on your new car, bring your checkbook or debit or credit card.
If you’re going to use your debit card for the down payment, make arrangements with your bank beforehand to allow you to access the amount of money you plan to put down. Most checking accounts have daily spending or withdrawal limits. The last thing you want to do is hand your debit card to the dealer for it to only get rejected when they swipe it. Make arrangements with your bank prior to getting to the dealership to ensure the smoothest process possible.
If you plan to use your credit card for your down payment, find out from the dealership the amount that they will accept that way. Since merchants pay a bank fee to process credit cards (2% or more of the amount charged), dealerships will limit the amount they accept from a credit card. In my 42 year career I saw dealerships that only accepted $1,000 from a credit card to go towards a down payment, to a max of $5,000 at some dealerships.
The more complete the credit application, the quicker it is for the bank to make their determination as far as your credit worthiness is concerned. What does that mean for you? If you want to get in and out of the dealership as quickly and painlessly as possible, bring this information with you and have it handy.
Always bring this with you to a dealership
Here is an added bonus that you should bring with you when buying a car. Bring a good attitude.
I know it might sound cliche, and hell, it is cliche, but after doing what I did for 42 years, I can assure you it goes a long way.
When you arrive at the dealership, let the salesperson know what you hope to accomplish together during your visit. For example, if you’re just there for information gathering, tell them that. If you’re only going for a test drive today, that’s a-okay, let them know. You simply want info on incentives and programs? Great, thanks for letting me know!
Don’t be adversarial, buying a car is truly a collaborative effort. Finding the right car and the right terms is a team effort, and the better you work as a team, the easier and more pleasant it will be.
So there you go. It isn’t as daunting as it may have seemed at first. If you bring these few items with you when you go to buy a new car, you’ll have a more pleasant experience. I guarantee it!
“Well, I negotiated over $2,000 off the original price, so I’m pretty sure I made out well. Didn’t I?”
After doing this for as long as I have, it doesn’t take long to burst someone’s bubble.
“Maybe you did… I know when I was managing dealerships I told my salespeople that they needed to be ready to lower the price three time during a negotiation — the customer always likes to win three times, then they’ll buy the car.”
I don’t take pride in bursting their bubble, it just comes with the territory at times.
“So, in your case, that $2,000 you shaved off the price is certainly some hefty savings, but I’d venture it was baked into the price they initially quoted you.”
The look on my son’s friend’s face was starting to sour.
“Don’t fret though, I’m sure they only made a couple hundred or maybe a thousand dollars off your deal, it’s just there may have been more room to negotiate.”
In today’s internet era, you may feel like you know how much wiggle room there is to negotiate on a new car, but at the end of the day, as a consumer, it’s hard to really know. Sure, tools like Kelly Blue Book can help you understand what a car is worth, but KBB and others miss out on vital pieces of information (such as manufacturer incentives, how long a car has been on the lot, and more).
When it comes to knowing how much you can negotiate on a car purchase there are 3 vital pieces of information that I always look for, and if I were you, I’d do the same.
How much you can negotiate depends on the window sticker
The window sticker is the Manufacturers Suggested Retail Price, hence MSRP. What you need to find out is the percent of margin built into that MSRP. For example, for many less expensive cars (Toyota, Hyundai, etc.) the percent of margin (markup) might be very little, as little as only 2 or 3% of the MSRP.
It’s important to understand that the dealer buys the car from the manufacturer at the invoice price, and then lists the car for sale at or near the MSRP price. This is the retail price.
That means a car with an MSRP of $18,000 might only have $360 of profit built into it.
Generally speaking, and as a rule of thumb, the more expensive and luxurious the car, the more margin is built into the retail price. Where an $18,000 car may only have $360 of profit built into it, a $100,000 car may have as much as $10,000 in margin.
How can you determine what the dealers mark up on a car is? Unfortunately, it isn’t an exact science because it changes from car to car and dealer to dealer. However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb.
Regardless of if you’re buying a Kia or a Mercedes, the reality is there isn’t too much room to work with when just looking at the mark up. This is where factory incentives come into play.
Dealer and customer incentives matter too
Dealer incentives (also commonly referred to as factory incentives) are put in place by the manufacturer and allow for greater price flexibility because they artificially inflate the margin on any given car. The percent of margin in new cars can range from a low of 2% to as high as 15%, including all incentives.
The internet is a wonderful tool for finding information on incentives for particular cars. Bear in mind that there can be two types of incentives; customer incentives and dealer incentives.
Customer incentives
Customer incentives range from rebates to special loan interest rates. Rebates can be as little as $500, or as much as $10,000 depending on the brand and the model. Other customer incentives can take the form of recent college graduate programs or active military or retired military and first responder programs.
There can also be hidden incentives based on who you work for or where you graduated college. Always ask the dealer about these types of programs and incentives, because it doesn’t cost them a dime! These programs and offers are usually through the manufacturer, so the dealer has no reason not to assist you here.
Customer incentives are relatively easy to learn about. Manufacturers actively market their recent college graduate programs, and websites like Edmunds.com keep track of constantly changing rebates and incentives.
Dealer incentives
Dealer incentives on the other hand are much harder to know about, and they can greatly affect how much you can negotiate on a new car. Manufacturers have monthly, quarterly, and even annual sales incentives for their dealers.
You need to understand that manufacturers have one objective, and that is to sell as many cars as possible. Many manufacturers are public companies. That means that each quarter they need to share their finance metrics with shareholders. Shareholders want to see that manufacturers are growing and selling more cars.
With that understanding, it’s easy to see why manufacturers put sales incentives in place for their dealers. Manufacturers need dealers to move as many cars as possible so that the manufacturer’s shareholders are excited about the brand’s growth.
Dealer incentives are quite significant. For example, a BMW dealership that hits their monthly sales incentive could receive $50,000 to $200,000 from the factory depending on their sales volume.
Obviously this means the dealer will be happy to lower the price on a car so that they get the kickback from the manufacturer. Use this to your advantage! Always ask the dealer how close they are to hitting their goal, if they need one or two more sales to get there, guess who just picked up some leverage? Yep, you!
How long has the car been on the lot?
The third criteria to know how much you can negotiate on a new car is how long the vehicle has been sitting on the dealers lot. The age of a car, and specifically how long it has been at a dealership can drastically affect a dealers willingness to discount a car.
If you’re looking for the car with the most “wiggle room,” then ask the dealer for the oldest inventory.
The reason for this is quite simple, the longer a car sits on a dealer’s lot the more it costs them (we talk about carrying costs in this post). This increases the dealers incentive to sell the car, and ultimately to save you more money.
By showing your interest in their oldest car, you’ll immediately get their attention. Make it clear you’re willing to entertain the “old” car if they make the price less than a younger (a similar car that has spent very little time in inventory). I can assure you from my 42 years of experience, they’ll be happy to do this for you.
Cars, unlike fine wines, don’t necessarily get better with age. Dealers want “old” cars gone! That gives you leverage, and getting a good deal is all about leverage.
So, now that you have some inside information you should feel more comfortable negotiating your next car deal. However, if you are like the majority of people that just hate to have to deal with this type of negotiation, there is help for you. Learn more about buying with CarEdge. We do the negotiating for you, and have your car delivered to your door.