Buying a Car in the US

Buying a car, no matter in what country you are in, is always both exciting and tedious/exhausting at the same time. At least for me. Some people are probably waking up one day and decide that they want a new car and on the next day they sign a contract somewhere. I can’t do that. I am a thinker and planner and especially when it comes to monetary-heavy transactions like buying a car, I not only think twice, but probably a third, fourth and fifth time about it. So it all can become very time consuming but with regards to that car I just recently bought in the US, I can say that preparing and doing research certainly paid off in the end.

No Car? No Way!

When I moved to Sunnyvale end of January 2009, I already knew that I had to get my US drivers license and then a car in the foreseeable future. Living out here in the South Bay, without a car is…doable, yes, don’t get me wrong. It just takes ages to go somewhere on public transport. You will get where you want to eventually, but it just takes looooonger. A rough estimate I came up with was that it takes about three times longer to take public transportation over here than doing the same using a car. But that is not supported by any evidence, just a guess on my end.

I had to go through the written and practice test at the DMV, which was not a problem after studying the DMV handbook (PDF version) and keeping the pitfalls in mind. And after that, I had to think about which car to get and making up my mind about it.

I have a soft spot for German cars, I have to admit. I have had two cars before in Austria, both of them were VW Golfs (a 1996 in black, and a 2003 in silver), very popular and reliable. But this time I decided that I would like to go with something more sporty. In the end I decided to go with a coupe by BMW. After thinking about the financial impact, I went for a certified pre-owned car from a dealer instead of a e.g. leasing a new one. Also because the whole leasing process is, in general, pretty confusing (at least to me) and so I feared that they might put in some additional hidden fees into the leasing rate that might in the end increase the financial burden.

Buying a car from a dealership and not from a private party was also a decision I made, simply because the risk of getting a not-well-maintained car with some hidden defects is higher buying from a private party than from a dealer. Besides, buying a certified pre-owned vehicle means it comes with original manufacturer warranty, which is another big plus in my mind. Of course, you pay more for that warranty but to me it seemed worth it.

Research

So once I had figured out the model I was looking for, I did some research to see which dealers had one in their inventory. I ended up with finding three dealers (two of the cars were black, one was silver). I visited all three and test-drove the vehicles. Actually I only test-drove two, because at the third dealership they either were unable to find the car on their lot or it was already sold. Whatever.

After doing that, Internet research came into play, because I wanted to be prepared for the negotiation phase. Edmunds.com was a very helpful resource for that. Apart from various guides, articles about the car market and tips about buying a car, it also lets you calculate what they call TMV (True Market Value) of a used car, based on color, mileage, extras and condition. This is very helpful as you can take this amount as a basis for the negotiation phase.

Negotiating

In the end I ended up with a choice between two similar vehicles, black and silver with more or less the same sticker price set. I started by calling dealer A and naming essentially the TMV provided by Edmunds.com minus about a thousand dollars. I was not really expecting from them to meet that offer, but rather drop their sticker price. So they did, by about 300 Dollars. With that in mind, I hung up, saying I have to think about it and called dealer B, doing essentially the same. They dropped the price as well, by about the same amount. Then I repeated the procedure, getting back to dealer A, naming an amount slightly higher than my first offer to dealer A, saying that the other dealer offered me this and asking if they could match it. They would then drop the price again.

Page 1 of 2 | Next page