How to Buy a Brand New Car in Under 2 Hours

Carlo D’Agnolo via Unsplash

I recently had the pleasure of purchasing two brand new cars within 3 weeks of each other. I bought my first car at the end of May, and it was declared to be a total loss in an accident within two and a half weeks of the the purchase. As I recently moved to an area with limited public transit, I decided to purchase the exact same vehicle within a few days of the accident. Thankfully, my total loss settlement appraised my car at a higher market value than what I negotiated the price down to, so I ended up having more than enough money for a second down payment. Being a personal finance freak, this was a huge relief for me.

While money wasn’t an issue in my second purchase, I was worried about the amount of time that I’d have to spend at the dealership. The average time an American spends at a car dealership is four hours, and I didn’t want to whittle away my precious weekend/ weeknight after a long day of work. Thankfully, I had read, listened, and researched for weeks prior to my first car purchase so my two car buying experiences were palatable. The amount of time spent at the dealership during my second purchase? 1 hour and 30 minutes.

If you’re a first time car buyer during the pandemic (and/or in life), I hope the step-by-step tips below help you. If you get nothing else out of this article, the one key takeaway is to limit the amount of face time at the dealership by negotiating beforehand. Here’s a quick infographic of purchase details.

Step-by-Step Details for your Next Car Purchase.

1. Decide on a Type, Make, and Model of the Car.

This is arguably the most important step in your purchase journey. There are thousands of combinations of car types, makes, and models out there, so there is bound to be a few that will fit your needs and wants. It’s important to create a prioritized list of what you’re looking for in a car because it’s going to be one of the priciest investments in your life. If you decide to go for a car for reasons that don’t meet your personal needs and wants (e.g. trendy car that don’t fit your needs, good price point but you hate the look and feel of the car), you’ll most likely end up regretting your decision, and even end up trading it in for a car that you truly needed or wanted.

Something that helped me a lot in this process is not only the online research (through Kelley Blue Book and Edmunds), but also visiting different used car lots (e.g. CarMax) or dealerships with lots of different types of cars to see some of the cars in person and sitting in them. If you go to a used car dealer that takes multiple makes and models like I did, it may be easier and less time consuming rather than driving to separate dealerships that specialize in one brand. Of course, these comprehensive dealers may have lots of different types, so I suggest only going in person after doing thorough research beforehand and narrowing down your choices to a handful of makes and models. Remember, the key is to decrease as much face time as possible (and stay safe during the pandemic!) I personally took one 1-hour visit to a local CarMax after browsing their inventory through their app, and found a make and model that I wanted to pursue.

2. Research What People Are Paying for the Car (not MSRP).

You’ll see the term “MSRP,” or “Manufacturer’s Suggested Retail Price” listed on various car websites. This is the price that the manufacturer recommends the vehicle to be sold at, but it is rarely the case that the car is sold at this price. Unless you’re looking for a specialty car with very limited availability (e.g. a vintage car that is not being manufactured anymore) that calls for a mark-up, most people pay below the MSRP. The best way to check for what people are paying is to go to TrueCar, customize the vehicle make, model (you can customize all the way down the trim, color, and any optional add-ons) as well as the Zip Code. The result will give you a range of what people paid for your vehicle — your goal should be stay within the “Great Price” range, which will likely be below the MSRP. For example, in the screenshot below, you can see that my car had a MSRP of $20,385, but sold for an average of $18,669.

My TrueCar Report.

3. Reach Out to Multiple Dealerships Near You.

Once you have a price range that you’re comfortable paying for your vehicle based on research, reach out to dealers via email. You can call them if you want an answer faster, but you’ll likely receive multiple calls or texts from the dealership. An email also ensures that there is traceability in your conversation, and if you receive a price quote, you can always reference back. The way to ask for a price quote is to ask for an “Out the Door” quote (“OTD” quote) of the vehicle. This is a term that includes total price of a vehicle with all of the necessary fees factored in (e.g. registration fee, taxes, accessories). When you ask for the OTD quote, it’s important to provide your Zip Code so the representatives can calculate your sales tax amount. Getting this quote is advantageous not only because you’ll get a rough estimate of what you’ll pay, but also because you’ll be able to identify hidden fees or unnecessary accessories that you can hopefully opt out of. Below is an example of a standard email I sent to multiple dealers.

Example of email to dealer asking for OTD quote.

Once you receive a few OTD quotes (some are more willing than others to provide over email — it’s important to remain firm in that you need to receive an OTD quote in writing before coming in to save hours of negotiating time in person. Remember, there are multiple willing dealers you can do business with), you can start leveraging your offers to negotiate a lower rate with other dealers. Here’s an example of an email I sent to one dealer, with proof of a lower offer from another dealership. Make sure to research any special deals that the particular dealership you’re reaching out to is offering! It’s always good to get a confirmation that they’ll honor the special deal.

Email example to beat offer.

4. Go into the Dealership in Person with Email Proof of OTD Quote.

When you’re happy with the OTD quote and customer service of a dealer you’ve interacted with, you’re ready to go in person to make a deal. Make sure to bring the email proof of the OTD quote with you. During my first car purchase, the dealer called me as I was on the way to make the deal, and tried to increase my purchase price by $4000. I immediately turned around, and went to another dealer with the next highest offer (there was only a $45 difference). This was an extreme scenario, but it might be good to have a couple of good OTD quote confirmations as a fallback plan.

At the dealership, you’ll likely just have to confirm the OTD quote (they’ll print it out on a price breakdown paper for you), view/ test drive the vehicle if you wish (I suggest you do, at least around the block— it’s going to be your car and you want to make sure there are no glaring functionality issues), and then move onto financing. To save even more time, I had a backup financing offer from my local credit union in case my dealer financing special didn’t work out, and set up my insurance plan prior to the visit, meaning that I’d only have to add my VIN once the exact inventory was confirmed. After doing all the prep work, the majority of the 1 hour and 30 minutes was spent in the financing office signing paperwork to make the deal official!

I hope this step-by-step walkthrough helped. If you want additional financial details of the deals I made, or my experience throughout the process, please leave a Comment. I’m also happy to connect personally to discuss more personal finance topics!

Life philosophies: ambition, diligence, and selflessness. Daughter, immigrant, and consultant dedicated to becoming her personal best, while elevating others.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Times are Improving for Landlords

How do i really get a free credit report?

Wealth Formula Episode 213: Ask Buck Part 2

NFTs? I don’t get the hype

Survey Finds Nearly Half of Americans Lack Plans for Their Lives, Finances, and Deaths

What It Takes to be a Dividend Investor Millionaire

5 Ways To Save Money + Dress Better

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Jackie Kim

Jackie Kim

Life philosophies: ambition, diligence, and selflessness. Daughter, immigrant, and consultant dedicated to becoming her personal best, while elevating others.

More from Medium

Here’s how to stop procrastinating on your financial goals!

Americans are Doing “Very Well” When Saving for Retirement

Can you buy a house in this market without competing?

Lifestyle Can Kill Your Life in The Future

https://www.kindpng.com/imgv/bRhiwR_saving-money-cartoon-png-transparent-png/