How To Buy A Car: Start With Some Patience

May 5, 2016

By my count I have helped some 58 friends (including many colleagues in public radio) buy a car. That's sort of funny, considering I didn't buy a car until I was 37 years old and began reporting on the auto industry for NPR.

On Saturdays over the last few years, I have gotten phone calls from friends at car dealerships asking for advice. It's no small financial matter, when the average cost of a new car is roughly $33,000.

So if you are reading this while in a car dealership, do what I tell all my friends: Stand up! Leave the dealership! Do not buy a car today!

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And before you return, take a look at these tips I've gathered from industry experts and public radio friends.

Do Your Homework

"I knew exactly what I wanted," Muthoni Muturi, NPR editor

Your father may have always loved Hondas, and your grandmother may have always bought Crown Victorias.

But it's my job to keep up with the car companies, and I have a hard time keeping track of what's good or bad. (And it's not your father's Oldsmobile, because they don't make Oldsmobiles anymore.)

"Information is king," says Jonathan Collegio of the National Automobile Dealers Association, or NADA.

"Consumers should do as much homework as possible," he says, and "have a sense of the market."

They shouldn't be afraid to go to a dealership, he says, but they should come prepared.

Start with data: Consumer Reports has a list of the best and worst cars. Car company rankings change all the time, and you might be surprised at what you learn — for instance, that Audi, Subaru, Mazda and Buick all rate higher than Honda for reliability.

The Insurance Institute for Highway Safety, or IIHS, compiles safety data by car and make.

Both sites promise unbiased data-driven information about car reliability and safety.

In addition, there are for-profit sites that help with reviews and pricing of cars. Here are just a few: Cars.com, Truecar.com, Kelley Blue Book, CARFAX.com, Autotrader.com, Costco Auto and NADA Guides.

Michelle Singletary, a personal finance columnist with The Washington Post, warns that consumers should not "set one toe in the dealership" before doing their homework.

Do A Thorough Test Drive

"Don't be satisfied with going around the block," Karen Grigsby Bates, NPR correspondent

Five or 10 years ago when you bought your last car you were that much younger. Your body, your needs and your eyesight have changed. That's why a test drive is so important.

Drive the car in the conditions you would use it in — at night on a dark road, for instance, so you can test the lights and brightness of interior lamps.

Rebecca Lindland, a senior analyst with Kelley Blue Book, points out that a test drive can help with dealing with family members who have disabilities.

She also recommends bringing car seats and pet carriers with you. And she reminds shorter drivers to pay attention to sightlines and especially the A-pillar (which is the beam on the windshield to the left of the driver); it can obscure vision around curves.

She also advises would-be buyers to pay attention to something known as the H-point.

"When you stand next to the car with the door open, look at how high the top of the seat is. That's called the H-point — where the top of the seat is," she says.

Where the H-point falls will give you a sense of ease of entry. If the top of a seat hits below your knees, for instance, you'll have to stoop lower to get into the car. If the H-point hits around mid-thigh, it will be was easier to get in and out.

The key is to feel comfortable in the vehicle.

Keep Your Emotions In Check

"A car is not an impulse purchase," Sonari Glinton, NPR business correspondent

At its most basic, purchasing a car is a financial decision that's tied with emotion, and dealers will use tactics that play on your emotions.

I would suggest separating the different decisions.

Test-drive on one day. Figure out financing on another. Determine the best dealer on yet another.

"Remember, their job is to sell you a car today," says Jack Nerad, executive editorial director and executive market analyst with Kelley Blue Book and author of The Complete Idiot's Guide to Buying or Leasing a Car.

"If you don't like the experience of how they are treating you, leave," Nerad advises. "You have all the power. Use it. Walk out the door."

Dealers often will make you feel like the deal you're getting is scarce, says Camelia Kuhnen, a neuroeconomist at the University of North Carolina at Chapel Hill. That will make you feel like you need to buy a car even if it's against your best judgment.

"You can easily survive without that particular car, at this particular dealership," she says.

Bringing a friend who will be dispassionate about the whole process and help advocate on your behalf is a good idea, Kuhnen adds.

Shop Around For Financing, Too

"I was prepared to walk out and did. It was only a couple hundred dollars difference but I got the deal I wanted," Greg Dixon, NPR producer for All Things Considered

"If you can't pay cash for it, you need to be asking yourself why [you're] buying this car," says Singletary, the personal finance columnist. She suggests checking with your local bank or credit union before you go the dealership.

"Negotiate purchase price not the monthly payment," says Lindland of Kelley Blue Book. "You can easily spend hundreds, even thousands of extra dollars by not paying attention to terms."

One final tip from Lindland: Avoid car terms that are over 60 months.

"Longer term loans help keep monthly payments low," says Melinda Zabritski with Experian, the credit agency.

But consumers should be very careful, she says, because "it's easy to find yourself upside down ... dealing with negative equity should they choose to trade it in after only a few years."

Collegio of NADA says "it's good to shop around." He advises that you get a rate from your local bank — the dealer will be able to match or meet it.

His organization has a guide for auto financing at autofinancing101.org.

A Few More Things To Consider

Ask for incentives. Dealers and carmakers often offer cash incentives, preferable loan or lease terms, gifts and even coupons to encourage consumers to buy cars. Check the manufacturer's website for incentives, and be sure to ask your salesperson.

The last weekend of the month is when dealers have the biggest incentive to sell.

If you're interested in leasing, negotiate the purchase price of the car first.

Deal with the trade-in separately, advises Singletary.

Buy less car than you need, and think used (often referred to as pre-owned) to get the best deal.

Once you decide on the car, stick with the decision.

"Don't settle on color," warns Bates, who's a member of NPR's Code Switch team. "Every time I go outside and see that red car, it makes me happy."

When you walk to your car, it should make you happy. And don't forget: You don't have to buy a car today.

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Whether you've got your eye on a $100,000 Tesla or a used station wagon for a fraction of that price, buying that car is likely to be one of the biggest purchases of your life. With the haggling and negotiating, it can be pretty scary. As part of our Money and Life series, NPR's Sonari Glinton has some advice. Don't call him.

SONARI GLINTON, BYLINE: I'm not really your typical car guy. I only got my first car five years ago. I was 37. But, hey, that hasn't kept me from doling out advice. When a friend calls me from a dealership, I say the same thing every time.

ZOE CLARK, BYLINE: Whatever you do today, do not buy. Let me do - actually let me do it like Sonari Glinton voice. It was like, whatever you do today, do not buy a car.

GLINTON: That's Zoe Clark, program director at Michigan radio. We used to share a cubicle. She couldn't resist. The very next Monday she came in driving a Chevy Cobalt. Now, that's a lemon that provoked one of the largest recalls in automotive history.

I gave our other seatmate, Jennifer White, who's now a host at WBEZ in Chicago what I thought was good advice at the time.

JENNIFER WHITE, BYLINE: I can't even say it out loud anymore without laughing. You need to look at the Jetta Sportswagen. And I think you're going to want to...

CLARK: That'd work out...

WHITE: ...Buy the Jetta Sportswagen.

CLARK: ...For you.

WHITE: (Laughter) That's how that worked out.

GLINTON: Which is...

CLARK: So moral of this story actually don't listen to Sonari.

WHITE: Don't call Sonari for advice (laughter).

GLINTON: It was a diesel, the car smack in the middle of VW's unprecedented cheating scandal. Hey, nobody's perfect. Jenn White says diesel-gate aside, she's learned...

WHITE: A car is not an impulse purchase, and that's actually something I've kept in my head. And I have repeated it to other people. So...

CLARK: Wait, so here's a question. Like, where do you turn for advice?

GLINTON: Well, Consumer Reports and IIHS are two nonprofits that score reliability and safety. There's also a gang of for-profit sites that will help you find a car and negotiate the price. There's a ton of options. Even Costco has a car buying program. We have more detailed information about all this at NPR.org.

At the dealership, though, the car salesman's job is to sell you a car today. They like to work on your primitive brain, says Camelia Kuhnen, a neuroeconomist at the University of North Carolina, Chapel Hill.

CAMELIA KUHNEN: You might be told that you could get this one car. There's just one exactly like it may be on that lot. And you can get it but only today and only for this price. And if you don't act quickly, then you're not going to get this amazing deal.

GLINTON: Kuhnen says by spending more time in the car dealership, you grow attached to the car. You know, you touch it, you get in it, you begin to think that it's yours. That's called the endowment effect. Then they tell you it's scarce which makes you want it more because you're under this illusion that you need it for your survival.

KUHNEN: You can easily survive without that particular car at that particular dealership. But you see the brain is wired when it sees something rewarding to make you want to go get it.

GLINTON: Kuhnen's advice, take a strong-willed friend to the dealership, preferably someone who know something about money and somebody who hates debt.

MICHELLE SINGLETARY: I loathe debt. I mean, I loathe debt. I loathe it. And if debt was actually a person, I'd slap it.

GLINTON: Michelle Singletary is a syndicated personal finance columnist with The Washington Post. Her advice is if you can't pay cash for it, you probably shouldn't buy it. Definitely don't lease and if you have to finance, shop around. Now, not just at the dealer, check with your bank or your credit union. And most importantly, don't buy more than you need and pay it off early.

SINGLETARY: Then you've got three or four or five, six or seven years of saving three or four or $500 a month. So you've got to look at it like that, and not just look at the monthly payment.

GLINTON: It's rare that I get to offer advice as a reporter, but I feel pretty confident about this. Car companies make cars. Car dealers make deals. Neither of them are going to run out of deals or cars anytime soon. I told Zoe, and I'll tell you. You don't have to buy a car today, really you don't. Now, say that a couple hundred times the next time you're at a car dealership. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.