How To Shop For A Used Car

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Partial Transcript

[The following is a partial transcript of this episode of The Scott Alan Turner Show. Listen to the full episode to hear this story, listener questions, money hacks, and inspiring stories of people that are changing their financial lives. Subscribe to the free podcast on iTunes or Google Play]

In This Episode / Listener Questions

  • Introducing the newest members of Team Turner.
  • Car dealer services that aren’t worth the money
  • Tax scams to be aware of
  • Be aware of when other people tell you what to do with your money (Saurav, YouTube)
  • What are some things I can do to to help me with taxes (Geoff)
  • Do I have enough to live on in retirement if I’m 58 and have $200,000 invested (Jana)
  • I’m interested more about the FIRE community (Seth)
  • What is one money trick you use that you may not have talked about (Manual, Florida)
  • How can I teach my kids better (Christine)

Resources/links:

Diane asked How should you shop for a pre-owned car? Or as I still call them – used. And a bold prediction using my crystal ball. Someday the auto industry will find a fancier word so we won’t think of them as used cars – gently loved cars.

Listen to this story out of the WSJ:

Brenda Christensen is considering buying her next car online after a frustrating dealership visit. She showed up at a Kia store in Melbourne, Fla., with a pre-approval letter from her lender for a Sedona minivan. Only to have the general manager pressure her to get financing through the dealership.

After the manager finally relented, Ms. Christensen, 56, was stuck in the finance office for hours.

She said “They delayed the paperwork and tried to push a lifetime transmission warranty. I was just like, ‘No, no, no,’ I think they finally understood after a couple of hours that I wasn’t going to budge.”

Buying a car stresses people out. Because it’s a big decision and big money. Now entire industries exist to take away the hassle. But they take away your money right along with it.

Years ago when I was single I sold my car to get rid of the payment. I had cash to buy a truck. I went to CarMax, and paid $7,000 with no haggling. That’s what CarMax, AutoNation, and Carvana are known for. A couple days later I was looking through Autotrader and found a truck with half as many miles – 35,000 vs. 60,000, for $500 less.

That’s a huge difference in miles. Carmax has a 7-day no questions asked return policy. So I brought back my truck to Carmax. Got my money back. No hassles. And went and bought the other truck. $6,300 I paid for it. I negotiated a couple hundred bucks off.

My experience, is a lesson for you. Shop, shop, shop around. Most people do a little research, end up on the car lot on a Saturday, and get the fever. The FEVER! The new car fever. Saturday night they are posting to Facebook their new car.

Look what I’m driving!
Look, I’ve arrived!
Look what a great deal I got on a trade in!

And I’ve done that too, I get it. That was my story of my first new car. It was a Jeep.

But realize what people who haven’t found The Scott Alan Turner show yet, don’t know is:

Look what the bank owns!
I overpaid on financing!
This extended warranty is a waste of money!

And they didn’t even give me a smelly tree for the rear view mirror.

Where dealers really keep their head up is boosting interest rates from the bank and throwing in products like extended warranties. – Earl Stewart, owner of Earl Stewart Toyota in North Palm Beach, Florida

That’s a dealer saying that!

Here’s what can happen. Person gets into the finance department. They’ve got the fever. Ready to buy. Already committed hours to the buying process. So their brain is not going to let them walk away. Finance person says, your credit is good/bad, whatever. The dealer will mark up the interest rate by up to 2%.

Given today’s 72-month average term to pay back the loan, that’s a Disney vacation somebody just gave away in interest payments. Not good.

Car finances departments are not friends of your wallet.
Car finances departments are not friends of your paycheck.
Car finances departments are not friends of your future.

I want you to remember that.

Car finances departments have one goal – get people who haven’t learned what we teach on The Scott Alan Turner Show into a car for the most amount of profit possible.

Let me congratulate you for being the best and the brightest when it comes to your car buying skills.

  1. Figure out your needs first. What do you need in car?
  2. What do you want? What are some extras?
  3. Visit the car lots on Sunday and look around. There are no salespeople there on Sundays. No pressure.
  4. Go rent the car for a day for $25 or $50 and drive it around. Or find a friend with one and drive theirs.
  5. Get your financing in place first from a local bank, credit union, or online. That alone will save you thousands.
  6. Once you find a car, do all your negotiating with the dealer through email. Get the walk-away price in writing.
  7. Go buy the car, and stand firm.

Your greatest super power is your walk away power. Your greatest super power is your walk away power Use it! Use it or lose it. And by it, I mean your hard earned money.

If you do not use your walk away power, you will lose money.

When my mother-in-law was shopping for her car, we did it a little different because she was buying the car. She was a cash buyer and knew what she wanted. But I was the good son-in-law. We sat at the sale person’s table after the test drive. Mother-in-law had a budget. The dealer would not come down enough on the price. So we left. This was two hours into the process.

Lo! A couple hours later we get a text from the salesperson. Suddenly the car is $1,000 less. Walking away, saved $1,000.

Always use your walk away power. You should walk away anyway and go get a bite to eat.

You’ll clear your head.
You’ll get away from that stress.
Your fever will go down.
And you’ll turn the tables.

The dealer will have the stress now, because they are worried about losing a sale. They’ve already committed a couple hours of their time. And they have nothing to show for it. They don’t like that.

If you want to avoid what Ms. Christensen experienced – being in the box for two hours getting worn down by the finance department – set a time limit. One hour. Then get up and leave.

If you’re like me, you’re probably impatient anyway. Use that! I can’t stand having my time wasted. I’d get up and go. Grab a sticky. Here’s my cell phone number. I’m going to out for dinner. Call me when the paper work is ready to sign and you’re ready to do business.

Remember this – you can add anything on to a car at any time, later on.

The one on the lot may have tinted windows and spinners on the hubcaps. You can add those later.
The one on the lot may be the only on in town which has everything you want and need. You can walk away and another will show up.

You follow those steps, and you will get the car you want, with the features you need, at the best price, with the least amount of stress.

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How To Shop For A Used Car How To Shop For A Used Car

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