My Story: Buying a New Car

contributed by Jessica C.


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My husband and I live well within or below our means and have always purchased used (usually lease trade-in) vehicles. In early 2006, we were getting ready to purchase a mini-van, as our family was increasing by a third child that summer. I have to give the credit to my husband for the legwork, time and commitment he put into finding our van.

First, he called local dealerships and went online to see what trade-in value we could get for the vehicle we were replacing (a 1999 Jeep Grand Cherokee with 90,000 miles). This Jeep had been paid off for over two years and we would not have been replacing it except that we could not get three car seats across the back seat. We found that our Jeep was only worth $4,000 as a trade-in. We called the insurance company and found that if we kept it on as a full coveraged vehicle it would cost us $400 a year. Therefore, we made the decision to just keep the Jeep and have it as a third vehicle. My husband's vehicle was even older (he uses it mostly to commute to work) and we figured when his went we would be very happy we had a vehicle for him to step into instead of finding ourselves buying something else.

Once we decided we had no trade in, my husband went online and researched every mini-van available until we found the one we wanted, a Toyota Sienna. He went to the closest four Toyota dealerships and test drove them and spoke to salesmen about prices. We went to other non-Toyota dealerships and test drove used ones. We found that a used Toyota was going for around $20,000-$27,000 and had an average of two to five years of use. New ones (in the style we wanted) ranged from $31,000-$40,000 (depending on the dealership and the additional features).

Well, I was not paying that good money when someone else had the first few years of the vehicle's life! Nor was I willing to spend over $30,000 for a vehicle. We turned to the Internet. Within a few days of searching, my husband found a Toyota dealership in a neighboring state who listed brand new Sienna's at Internet pricing. We called them over three times just to question their methods, pricing, etc. as we could not believe our eyes and ears. A brand new Sienna with the features I wanted was $37,000 at our local dealership, but it was $28,000 at this dealership.

After we made the decision to go forward, we had to place a $500 credit card hold on the vehicle we chose, get financing ourselves, get the VIN number to our bank for the check to be released and sent to the dealership, and wait for the check to clear. We then drove five hours to pick up our new vehicle. After that, I had to go to our local DMV to pick up the plates and pay the sales tax (as they could not pay that for us, being a different state).

We saved $9,000 because we had time on our side to look at all of our options and for the above timeline to take place. Had we been pressured to buy quickly, we never would have saved that money. We placed the credit card hold on March 20 and picked up the vehicle on May 19. Additionally, we did the financing ourselves and the DMV trip ourselves, which are all things you pay a place to do and we did them for free (just our time).

A worry of mine was purchasing something so expensive sight unseen. My husband took me to a local Toyota dealer and had me test drive the exact model. He said, "Now, we can spend $9,000 more here or you can get the exact van from the other place and save $9,000." Well, there was no argument there!

As the process went along, we found out more information from the dealer on why they can do this pricing. Simply, they are listing the possible vehicles you can buy online. Those vehicles are not even created yet. We were buying a vehicle that had not been manufactured yet. The salesman explained that this way he had no overhead and could pass the savings along. He did not have to advertise the vehicles, pay a commission for someone to sell them, or pay for lot space to sit the vehicle. We found this out because the bank needed the VIN and we were told it did not have a VIN yet. It had not even been manufactured.

Yes, our vehicle came from a Toyota dealer. Yes, it came with the standard 36,000 mile / 3 year warranty. It had everything we would have gotten locally but paid more for.

The best outcome of this scenario was the financing. Anyone who has purchased a vehicle at a dealership and gotten financing there seems to leave with the sting of somehow being taken advantage of. By getting our own, we were able to state the amount we were borrowing, not the monthly payment. Even doing it online and by ourselves the bank finance person tried to get us to change the terms. Since I knew the interest rate I was getting and the amount we were borrowing, I had gone on Bankrate.com and had our monthly payment number. When his was higher, I stopped him and questioned him. He had added in sales tax, plates, and fees from the bank. I explained we were doing all of that ourselves and were not paying for it in our monthly amount. I was clear we were borrowing a specific amount and nothing more. Who wants to pay interest on things you can pay cash for outright?

If you have time and energy to really research things, you can definitely save money.


"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it by email to MyStory@stretcher.com.

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