Buying a New Car

My wife and I recently decided that it’s time to get serious about replacing my 1991 Honda Accord. After looking around, we’ve settled on a Honda CR-V LX (with two wheel drive) — a bit more practical than my current car size-wise, yet it still gets pretty good mileage (29 highway/24 city). While I’m well aware of the advantages of buying a late-model used car, I have to admit that I’m one of ‘those people’ that prefers to buy new

One of the big reasons for this new car preference is that we’re a Honda family, and the price difference between new and late-model used Hondas isn’t that great. On top of that, I tend to drive cars for a long time — in fact, if I keep my next car as long as I’ve had this one, I won’t be in the market for a replacement until 2020 (unless the world runs out of gas before then). Thus, the difference in price, when amortized over the life of the car, isn’t that much (yeah, yeah, I know… I’m rationalizing). Anyway, I’ve spent a bit of time in the past week trying to find a good deal, and I thought I’d chronicle the process here.

My modus operandi when it comes to car shopping is to keep the dealers at arm’s length until we find the deal that we want. To this end, I tend to rely on faxes and, more recently, e-mail. In short, I start by soliciting bids from all dealerships within about two hours of here. What follows is an example of the sort of message that I send. You should either direct it to the sales manager, or send it via e-mail to their internet sales person.


We are planning on buying a new car within one to two weeks. We are specifically interested in purchasing the following vehicle:


Over the next three days, we will be taking bids from dealers interested in our business.

Please note that we are not willing to purchase a demo. Rather, we expect to purchase an extremely low mileage vehicle that has experienced nothing more than the occasional test drive. Moreover, we intend to make our purchase within a week after selecting the most attractive bid. Thus, we expect the vehicle to be in stock and available within that timeframe.

If you choose to bid, please provide us with an itemized list of all costs associated with the vehicle detailed above. We will not consider incomplete bids, nor will we consider bids for a vehicle other than the vehicle described above.

Please also note that we will accept no bids after 5:00 PM on *DAY*, *DATE*. The sooner we receive your bid, the better.

If you are interested in our business, please either e-mail (preferred) or fax your bid to us at:




Thank you for your time. We look forward to the possibility of doing business with you.



The key here is to be as specific as possible about the vehicle in which you’re interested. This works especially well with Hondas, as they typically come in just three (sometimes four) trim levels with no other manufacturer options. This makes it especially easy to compare amongst quotes without having to figure out how to compare prices/features between “Luxury Option Package #5” and “Super Duper Trim Package #7.”

As soon as a reasonable number of bids have come in, compare them to each other and then shop the best bid around to the other respondents. Don’t worry about getting a response from everyone — some dealers probably don’t have the car that you want in stock, and others are intent on drawing you into negotiations by responding with a “make your own deal” offer. I’ve had the best luck shopping the best bid to the other dealers one at a time. If anyone beats it, you have a new low bid to take to the remaining dealers. If you have a preferred dealer from which you’d like to purchase, I’d recommend leaving them until last. That way you can go to them with the best price in the market and ask them to match/beat it.

Once you’ve made your best deal, give the dealer a call and iron out the details for completing the transaction. I’d recommend getting the out-the-door price (including tax, title and license) at this point and then informing them that you’ll be writing the check for that amount before you leave home. That way they’ll know that they can’t (or at least shouldn’t try to) play any last minute games with you.

We went through this process about a year and a half ago when we bought our mini-van, and we were able to quickly find the bottom of the market. Indeed, after working our way through the second-chance bidding, we quickly got the price down to a point at which a number of dealers said that they wouldn’t/couldn’t match it even though they had the vehicle in stock. When we finally called up our dealer of choice, we told him that we’d be there in two hours with a check in hand if he could have beat the current low price and have the car ready for us. He agreed and shortly thereafter we were taking a last-minute test drive and inspecting the car before closing out the transaction. All in all, it was incredibly painless (and maybe even a little bit fun).

This time around, we started by contacting the dealership/salesman that we bought from last time and gave him a chance to make the initial bid. We then cast a much broader net by contacting all of the other dealers in and around our area. We were hoping that, by buying late in the model year, we might get an especially good price on a 2005 closeout. After all, if you’re going to drive your car as long as I intend to drive mine, rather than flipping it for a newer model in three years, there’s no real need to get the newest model year. On top of that, the 2006 model is identical to the 2005 model.

The problem that we’re running into right now is that we may have waited too long — a lot of the dealers that we’ve contacted have told us that they’re out-of-stock and don’t have any more in the pipeline. But we have received some pretty good bids. In fact, I thought that we had struck a deal this afternoon when we took the best available price back to the guy that we bought from last time. Unfortunately, it soon became clear that his best price comes complete with a $299 processing fee that wasn’t included in the quote. What?!? I know that this sort of thing is standard practice for car dealers, but… I asked for an itemized quote including EVERYTHING. Besides, this sort of processing fee is akin to a grocery store tacking on an extra fee for the privilege of having them ring up the gallon of milk that you’re about to purchase.

Anyway, only time will tell if this’ll work out. Unfortunately, it hasn’t been quite as painless this time around. Oh well, if things fall apart we’ll just wait until their lots are full of 2006 models and we’ll try again.

Note: Since pricing is often closely tied to financing, this process is far easier if you’re going to either pay cash or line up your own financing.

You’re reading Part I of “Buying a New Car”
Read Part II of “Buying a New Car”
Read Part III of “Buying a New Car”
Read Part IV of “Buying a New Car”

19 Responses to “Buying a New Car”

  1. Anonymous

    Waiting until the end of March (end of first quarter) to buy the previous year vehicle IE a new 2011 in March of 2012 will save you an enormous amount of money. There are all kinds of incentives to move any remaining 1 + year old vehicle. They want it OUT! And it is still brand new with the same warranty. Has worked for me repeated times.

  2. Anonymous

    Just a clarification – I did the same as you did with all dealers within 2 hours of my house. My brother’s deal just happened to beat all the offers I got. That was the deal I took back to the other dealers for a second chance offer, saving the dealer closest to home for last 🙂

  3. Anonymous

    even though you wrote this several years ago, I enjoyed reading it b/c we took a nearly identical approach on buying a 2008 CRV LX 🙂 I, too, opted for new b/c there was only a $1,000 difference in price between a brand new honda and 2 year old honda with 20K miles on it (whether CR-V or Accord)! And I’m like you, I drive ’em forever – I was replacing a 13 year old car that was at death’s door (not a honda)! We also don’t drive very far – putting, at most, 6K miles on each car per year. I had an additional advantage in that my brother had worked in the car industry for 20+ years and was able to give me a tutorial on how dealers operate – he told me to ask about the dealer fee ahead of time. I found that the dealer fee ranged from $200 to $600, depending on dealer. He got a good deal on a brand new CR-V from a dealer that he worked very closely with – but 5 hours from us. He told me to take that deal to my local dealer. He told me the local dealer likely would not match it b/c it was too low for a car that was in very high demand (#1 seller at the time), but said if they came within $500, I should jump on it, unless I wanted to drive 5 hours to take advantage of the deal he got (even though the industry was hurting for business in 2008, the CR-Vs would not remain on lots for more than a couple of days). Much to my surprise (AND to my brother’s surprise!), my local dealer BEAT the offer he got! I picked out my car that was still on the boat in the middle of the ocean, put the deposit on it, and came back and picked it up when it arrived 🙂

    and you’re right about “invoice” price not being true cost to dealer. I also got an offer to buy a brand new acccord at $500 below invoice, but stuck with the CR-V b/c it was the exact same price 🙂

    I hope you are still enjoying your CR-V as much as I am mine. It’s almost two years old and has only 9,500 miles on it – less than the used ones I started out looking at. And the funny thing is, current KBB private party value on a “good condition” 2008 CRV with 9,500 miles on it is MORE than the total (including fees) that I paid for it almost two years ago! (but I’d say mine is still in “excellent condition!”) I love haggling – it’s like a sport 🙂 But I’m glad I won’t have to buy another car for a LOOOOONG time…

  4. Anonymous

    I agree with Rambling News…the Costco buying program for cars is a much better way to purchase a new car. Just follow the steps Rambling News outlined and that’s pretty much it! Oh, and the tips Rambling News has on saving gas is good too.

  5. Anonymous

    Yup, bought 2 cars from Costco. Our Accord was about $900 off MSRP, and for the 2007 models, the Accord was supposed to be about $1200 off MSRP. Best way to buy ever, since you don’t have to negotiate. Check out what I think at my site…the direct link is here. Hope it helps!

  6. Anonymous

    I was a first-time car buyer in the month of May 05- a 2005 Honda CRV AWD LX. I bought a package from and took 15 minutes to email 30 dealers through the Honda website asking them for their best price and got responses from about 20 of them. In 3 days, I called the dealer with the lowest price and we settled on a price on the phone. I got a nice deal (end of the month) at about $1100 below invoice, thats a 4WD for a 2WD invoice! No document fees, rubbish add-ons, etc.

    After a month since I bought the car, I refinanced through my credit union for 4.25% for 36 months. The beauty of the Internet and forums is sharing experiences so that we are well prepared to avoid the shell games of car salesmen and F&I guys.

  7. Anonymous

    I’m kinda late in this comment but just thought I’d mention I’m in the shopping around mode right now for a new car and their tips have been invaluable. The layout is very pre-1999 but there is a ton of info there. I especially liked Top 10 Car Dealer Scams Of 2005 at
    Should be required reading for anyone in the market for a new car.

  8. Anonymous

    Nice post. Another good time which I find makes dealers more willing to bargain is to go is during an extended period of bad weather (even better if this bad weather happens to fall toward the end of the month). Bad weather keeps people away and when there aren’t customers coming in the door, sales people are much more willing to deal.

  9. Anonymous

    Great post! The next time we buy a new car (far from now) I’ll follow these same guidelines.

    I agree with you regarding new versus late-model. We keep our vehicles a long time (10 years for one and the other was purchased brand new 3 years ago). In fact, the last new vehicle we purchased was for my wife and we went into it thinking “ok, what vehicle do I want to drive for the next 10 years?” so that she’d be satisfied. We also bought an extremely reliable Toyota so we know that it will last.

  10. I’ve gone through Edmunds and the like before, but I’ve always found that you can get the price down further if you shop around a bit, as described in this post. In fact, the initial prices offered by most dealers are usually around the Edmunds True Market Value (TMV), and you can usually do a good bit better. And I never look at it as the amount below MSRP, but rather the amount above invoice when I’m evaluating a deal. $2500 below MSRP may or may not be a good deal depending on the price of the vehicle, the extent to which the MSRP has been marked up relative to actual cost, etc. Depending on the demand for the vehicle in which you are interested, you should be able to get very close to invoice + destination (including any dealer ‘processing’ fees) using the method outlined above.

  11. Anonymous

    I used They give you the price the dealers pay for the specific make and model car you are looking for and submit your name and contact info to a few dealers in your area.

    Within an hour I got 3 e-mails back from dealers with quotes up to 2500+ below the MSRP.


  12. Anonymous

    OK, congratulations…this is the single most helpful post you’ve ever had on this blog.

    I am definitely, 100% certain, following this advice the next time I buy a car. I have absolutely HAD IT with the runaround one gets attempting to buy a car from a dealer, and it would be a fabulously refreshing change to be able to walk in the door with a price quote and a check. Maybe that way I’ll be driving off the lot quickly enough that I’m not falling asleep from exhaustion.

  13. Anonymous


    I’m right with you. I was looking into a late model Honda because I love those cars. But the price differential was too low between new and used. I figured it would be worth it to get new, so I was sure I had nothing to worry about but only had to pay a small amount more. Unfortunately my timing meant that I was buying a new 2004 before the 2005s were out.

  14. Anonymous

    I did this TWICE last year and had good success with it. Some things I would add:

    *Get a report on the costs of the vehicle from Consumer Reports. It costs $12 or so but saved a few hundred dollars.

    *Do it at the end of the month (when they’re trying to make a sales number). They get more desperate at this time. 😉

    *End of the year works even better. I bought a car once on the last day of the fiscal year for the dealership and they practically gave it to me.

    *I’ve heard shopping between Thanksgiving and Christmas is a good time to buy since it’s dead in car dealerships and they are willing to make deals.

  15. Anonymous

    Good post. If you aren’t looking for a Honda, then you can see what the dealer has in their exact inventory (I know this is true with all GM and Ford cars). This would be helpful to actually see the sticker of the car (not necessarily helpful if Honda only has a couple of options) they would be referring to and cut out not getting responses. Perhaps it may even show that you’ve done further research, but who knows what they would do with that.

    Besides this bidding process, I have found that using your network to locate someone who knows a dealer manager or owner really helps in getting a great deal without any hassle. But that all depends if that resource is in your network.

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