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Insider’s Guide to Car Buying

Marquis Willis has seen the underbelly of car sales, and it’s not pretty. After six months in the business, the twenty-four-year-old Florida-based USAA member got out. Now, he’s sharing his experiences to help you the next time you’re in the market for a new ride:

1. Pack your papers.
When customers showed up with printouts listing market values, trade-in values, financing options, rebates, and other information they’d gathered, we knew we wouldn’t make much money off the deal. So, arrive at the dealership with research in hand.

2. Know the score.
Dealers make a lot of money on financing. Being ignorant of your credit score and borrowing options can be like handing them a blank check. A point or two of extra interest adds up over time. When you have pre-approved financing, it shows you’ve done your homework.

3. Look the part.
If you’re dressed too nicely, the dealer might think you have money to burn. Too sloppy? You won’t be taken seriously. Choose something casual, clean, and unwrinkled.

4. Skip the add-ons.
This includes service contracts and extended warranties. Know clearly what you need and want by doing research beforehand—online and on the lot. If you buy an extended warranty, read carefully the sections that include items not covered.

5. Wear your poker face.
To get the best deal, act as if you’re not quite ready to buy. I sold a car to a young engaged couple who both worked. The woman really wanted a new Mustang GT, and I could tell after the test drive that she loved the car. At that point, she lost all her negotiating leverage.

6. Stick to your budget.
A car payment and expenses, including insurance and maintenance, should be 12 percent or less of your take-home pay. New cars depreciate quickly. You may soon owe more than the car is worth (being “upside-down” on the loan). Avoid this by putting at least 20 percent down.

7. Draft a quarterback.
That’s the nickname dealers have for someone who comes along to coach you. The big thing in car sales is building rapport with customers. A sidekick can run interference, and the salesperson can’t be as aggressive.

8. Never believe the sticker.
The sticker price of a car isn’t the actual price. There’s always room to negotiate. I sold a $50,000 Ford F-250 pickup to a couple who paid the sticker price and never even tried to cut a deal. The truck had about an $8,000 markup so I had room to negotiate.

9. Don’t fall for last-ditch deals.
Sales managers sometimes make departing customers an offer so low, no one else can match it. This is usually just a ploy to get them to come back. Call their bluff and you may come out a winner. But if you leave, don’t expect the offer to be there when you return.

10. Avoid trade-in shenanigans.
A customer wanted to trade in a car worth $7,000 for a new car. The dealer discounted the new car but offered only $2,500 for the trade-in. In the end, the dealer came out ahead. Always nail down the new-car price before discussing your trade-in.

11. Avoid yo-yos.
You finalize the purchase with dealer financing and drive the vehicle home. The dealer calls later to say the financing fell through and you need to come back. When you return, the interest rate is higher. To avoid this, arrange for financing before you ever hit the lot.

12. Inspect before you buy.
When shopping for a used car, take your potential purchase to your mechanic for an independent inspection. A good tech will spot hidden problems. Independent inspections usually run from $75 to $100. It’s the best one hundred bucks you’ll ever spend on a car.

Originally published on USAA