Car Buying Guide: Start Your Search For A New Car

June 17, 2010

Readers are encouraged to send in their questions about the car buying process. Get answers from an industry insider!

Question: What is the best way to start looking for a new car? Should I begin online or visit my local car dealer?

Answer: When I was Internet Manager for a major car dealer, I discovered that there are two kinds of new car buyers:

  1. Those who begin their vehicle search by walking through the front door of the local dealer
  2. Car buyers who contact the same dealership’s Internet department to work out price and other factors prior to stepping onto the sales lot

Why the difference? Dealers assume that if you’re emailing their Internet department, you are comparison shopping, or contacting other dealers for the lowest possible price. They assume--usually correctly--that if they don’t quote the lowest price they’ll lose your business. Among dealers, this can become a game of chicken (who can go the lowest!) resulting in wildly fluctuating Internet prices that vary day to day, and dealer to dealer. One week any given dealer is quoting the lowest price in the area, the next week that same dealer's prices are among the highest. It can be like the wild west.

This compares to someone walking in the front door asking: “What’s your best price?” There is no reason for dealers to discount the price at this point, so most don’t. A car buyer’s job is to give the dealer valid reasons to quote the lowest price possible. It’s tougher--though not impossible--to do that by walking in the front door instead of contacting their Internet sales department.

Which Price Do You Want?

The question is: Do you want to begin the negotiating process by starting out closer to MSRP or invoice?

The answer is obvious. You’ll keep more money in your pocket if you begin negotiating as close to the invoice price as possible. This means you should not begin your car buying process by walking in the front door of your local dealer. Instead, begin by contacting them by email and ask for the best price on the exact make and model you want.

Is it better to call the dealer instead of emailing? Should you contact other dealers in your area? What about the other items that adds to the cost of a car? Can you pre-negotiate those, too? Stay tuned to for answers to these questions next.

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