Intro by JL’s Team
Do you love having a new car but hate the buying process? The pressure. The haggling. The hidden fees…
You’re not alone. In fact, massive companies (Carvana, CarMax, and more) have been created just to reduce this pain. The problem, however, is these no-haggle dealerships often add $2,000, $3,000, or even $4,000 to the price of the car for this convenience.
Since May is historically one of the busiest car buying months of the year, we decided to resurface this post from 2019 (originally titled “How we bought our new car”) on how JL eliminated the normal pain of purchasing a new car. How’d he do it?
Keep reading to find out…
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Steve 2.0
A few weeks ago, in the post Why we bought a brand new car, I shamelessly teased you all with this…
“…and (gasp!) we even had to take a loan to do it.”
And…
“…we didn’t buy it from the dealer offering the lowest price, who happened to also be the one closest to us.”
What better time to explain those mysteries, and our buying process, than this Thanksgiving Day?*
Separating the selection and buying processes
While buying a new car is now a much better experience than it was in the “bad old days,” it is still a bit of a hassle. The key to making it as painless as possible is to separate the selection process from the actual buying process.
Our Selection Process
Since we have loved our current Forester, buying another was the default option. I began by researching the new ones online and in Consumer Reports, looking at a few things that were important to us: comfort, visibly, safety, roominess, price, etc. We compared Foresters to similar models, and we gave some thought as to whether we wanted an entirely different type of vehicle altogether.
Once the Forester passed muster on these considerations, we went to a dealer for a test drive, keeping those in mind along with the criticisms we’d read about.
The biggest of those is that, the Forester is slow. At this point in my life, I am a little amazed at how little this matters to me. But I decided to check out the numbers anyway:
0 to 60, takes ~8.7 seconds
The quarter mile, about 17.3 seconds
To put this in perspective, when I was in high school, one of the very fastest cars you could buy was this:
The 1967 Plymouth GTX with the 440 engine did 0-60 in 6.5 and the quarter in 15.2. My pal David, who worked in the same Jewel Foods Store as I did, bought himself brand new a red one just like the picture. (His parents were going to pay for his college.)
I bought college instead, but I lusted for it then. Still do, in case you are wondering what to get me for Christmas. (Red 1967 with the 440 mint only please.)
Anyway, in those formative years of mine, anything that could run 0-60 in under nine seconds was considered pretty quick. So now, in my old age, 8.7 will be just fine, thanks.
Leaving that little bit of nostalgia and returning to the task at hand, this is important:
Be sure to separate your test drive from the buying process.
You are going to want to go home and think about the car after having driven it, and you are going to want to have several dealers competing for your business, not just the one where you happen to test drive the car. We, for instance, test drove the Forester last spring, just before we left for 5 months in Europe. No chance of being seduced into buying then, and LOTS of time to think it over.
Our test drive confirmed that a new Forester would be the car for us. But had it not, we would have gone back to our research and from there test driven others until we found the right one.
Our Buying Process
Once we returned to Kibanda from Europe in early October, we began actively looking to buy the new Forester. Since we would be buying in Wisconsin, where we happened to be, and registering the car in South Dakota where we are residents, I called our South Dakota county office to find out how to do this and what paperwork to send them.
Next, using the Subaru website, I found the five dealers close enough that we would be willing to travel to them to pick up a car. BTW, there is no need to buy a car from the dealership where you plan to have it serviced. Any dealership service department will be thrilled to have your business. With our nomadic life, Steve 2.0 will very likely receive any needed attention from Subaru dealers scattered across the US. He will probably never see the dealer we bought him from ever again.
Once I had the dealership names I went to their websites and sent them each this email:
I would have used that revised email to help standardize the responses a bit, although you should be prepared for dealers not responding as you might hope. This is a process that is good for you and not so much for them.
In my case, four responded and one didn’t bother. Of the four that did, three failed to answer my questions and instead asked questions of their own and encouraged me to come in to talk. Only one, Jackie, attempted to answer my questions directly. The others, though a series of emails, did so slowly and reluctantly.
Turns out, 2020 Subaru Forester standard models with no options are rarer than baptized rattlesnakes around these parts. While a couple of dealers were willing to order one, delivery times were 8-12 weeks, long past when we would be on our way to Colorado, New Mexico and Arizona for the winter. The only alternative was to select from among the available base Foresters with minimal options added. This, of course, made price comparisons slightly more difficult, but nothing unmanageable. It also meant evaluating the value, if any, of the options on a given car.
Eventually, I narrowed my dealership choices to two and took the conversation to the next level and called them. I kept email communication open with the other two just in case the first two disappointed me.
Jackie continued to impress. She was experienced, straight forward and helpful, and her pricing was much better than the others. Plus, as we talked, I became more comfortable with my sense of the dealership behind her. This is important. You can have a great salesperson, but come time to sign the papers you’ll be dealing with the dealership management.
In the end, she managed to find a Forester with only alloy wheels and a roof rack added for an addition $600. Not too bad.
But, Jackie’s dealership was one of the least “geographically desirable.”
Nick, the other person I chose to call, had the most “geographically desirable” location. As he did in the emails, on the phone he struck me as young and probably new to the business. But he was helpful and trying hard. However, his initial price was clearly an opening bid and way too high.
When he got back to me, he said, “My manager says you have to come in to discuss pricing further.”
“Well, Nick,” I said, “that’s not going to happen. Seems your dealership doesn’t want to do business the way I want to do business and that’s entirely their choice. Thanks for your efforts and I wish you all the best.”
There is nothing to be gained in trying to force a person or organization to do business in the way you wish. Just move on to the others who will, and who do so willingly.
“Can I get back to you?”
“Of course,” I said. But I hung up mentally scratching them off my list.
However, the next day Nick was back. He had found a car with the alloy wheel and roof rack package and a package consisting of floor mats, cargo cover, cargo tray and the like for a few hundred dollars more. His price was slightly less than Jackie’s, even with the extra stuff.
By now, unless you remember my opening paragraphs, you are probably thinking Nick got the business. After all, he had the lower price with extra stuff and the more convenient location. Plus, I liked him. But, I had developed concerns about the dealership behind him.
Meanwhile, Jackie had impressed me from the beginning and had offered a very competitive price. She had been easy, and a pleasure, to deal with from the start and I had developed the sense that her dealership would be too.
It wasn’t an easy call, but Jackie got the business. I reminded myself I wasn’t just looking for the lowest price, but for a fair deal that would be as painless as possible. As I say in my Manifesto…
“It’s OK for the other guy to get a deal, too.”
We struck the deal on the phone, put down $500 on our credit card and set up a time to pick up the car. She told us they would accept up to $5000 on the card and I told her we’d add the other $4500 when we got there and cut a check for the rest.
Used properly – as in never carrying a balance and paying interest – credit cards are wonderful tools: Useful reward points and very convenient. I would have put the whole amount on mine if they’d have let me.
“BTW,” I said, “please ask them not to put dealer stickers on the car.”
I hate dealer stickers on my car. If you want me to be a rolling ad for you, let’s first discuss how much you are willing to pay.
“We never do,” she said. Another point for the dealership.
Picking up Steve 2.0
So far, the buying process had gone mostly as I expected. A bit more cumbersome than I had hoped, and a bit more time consuming, but for the most part not bad. But then we went to pick up the new car.
Fortunately, Jackie was every bit as pleasant and easy to work with in person as on the phone. The new car was there and ready to go. We looked it over carefully and took it for a test drive. She sat with us and walked us through the various controls and features. We went inside to do the paperwork, figuring we would be on our way shortly.
It was not to be. I blame myself mostly.
We charged the $4500 to our credit card and wrote the check for the balance. She took it to the office and shortly came back with Mike, and he had bad news:
They couldn’t accept the check.
Now I had bought cars from dealers before with checks, no problem. But this time was different:
- We were SD residents buying in WI.
- We were writing the check on our SD bank.
- We don’t live in WI and so don’t have a WI bank account.
- Our driver’s licenses have an old address on them that, of course, didn’t match the address we had put on the paperwork. (SD doesn’t require you to get a new license when your address changes, so we never bothered).
Not surprisingly, in hindsight, this set off all kinds of scam alarm bells with their accounting department.
But Mike also came back with a solution: We could just borrow the balance.
It was easy, simple and elegant way around the issue. Although it did strike me as odd that they would say in effect “we won’t take your check but we will just give (loan) you the money.” Of course, the risk of the loan was on the bank making it, not them. So there you go.
Anyway, this is why I blame myself for this becoming a very long process. I just didn’t want to take the loan. Irrational, I know. It cost nothing to initiate, we could just pay it off immediately and Mike even offered an additional discount on the car. But I have never had a car payment, ever.
So instead of accepting the obvious and easy solution, I dragged us through every alternative I could think of. I even got the bank on the phone to verify with Mike that the money was sitting there. Mike ran all my ideas past accounting, but they wouldn’t budge. And I get that.
Thankfully, I had never gotten around to freezing our credit reports (as is a very good idea generally). A bit of odd good luck that.
So, now for the first time in my life, I have a car loan. At 2.9%, not a bad one at that. Although we’ll still pay it off.
The numbers
If you are like me, you’ve been wondering what this deal actually looked like once the dust settled. You want numbers! Here you go:
- $25,505 (includes destination charge of $1010)
- $600 alloy wheel/roof rack package
- $26,105 MSRP
- $219 document fee
- -$2500 discount
- -$194 addition discount from Mike
- $23,630 Total
Of course, there are also title, registration and tax. Because we are buying in WI but registering in SD, this is a bit complex and we are still working thru it. So far those look like this:
- $174.50 WI Title & temp plate
- $10 SD Title
- $945 SD 4% tax
Of course there will also be a SD plate fee, but not sure what that will be yet. So, so far…
Grand total = $24,760
Epilogue
We’ve had Steve 2.0 just about a month now and have driven him ~500 miles.
Even as the base model, he is a lot fancier than our 2007 and we are still sorting out how everything works. One thing I really like is the backup camera, although took some mental calibration to sort out the image and the real world.
There is also a bit of autonomous driving tech in place, including a feature that tracks the car in its lane and though curves. It is very weird to feel the steering wheel move by itself under your hands. But I think I’m going to like this feature, especially on our long road trips.
The visibility is great, he handles smoothly and the steering is precise and nicely weighted. The acceleration is fine too. For us anyway.
The ride is comfortable and the cabin is quiet.
So far, he is flawless in build quality. Most new cars have at least a couple of small imperfections that require a return to the dealer to sort out. Given the incredible complexity of modern cars, I find the fact that this one doesn’t pretty remarkable. But then, as I recall, the original Steve didn’t either.
Speaking of Steve, for those of you interested, he has gone on to his new owners and this is the tale of what he cost over the years.
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Is genius the product of inspiration or perspiration or something else?
The Bus Ticket Theory of Genius
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What is going to live to be 5 thousand trillion trillion trillion trillion trillion trillion trillion trillion years old? This guy…
After that…
“Time becomes meaningless.”
A very cool video, if you are into things like this.
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*Happy Thanksgiving!!
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