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10 Rules of Buying a New Car Without Getting Screwed — Transcript

by Tyler Gardner · 5,336 words · 773 segments · language en · Watch on YouTube

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0:00Buying a car is not just a consumer
0:03choice. It's a high lever financial
0:05decision that echoes through your
0:07budget, your net worth, and your mental
0:09bandwidth for years. The average car
0:12loan now stretches beyond 70 months. And
0:16for many household, it's their second
0:17largest expense after housing. So, this
0:20isn't just about driving. It's about
0:22designing the next 5 years of your
0:25financial
0:26life. Hello friends, this is Tyler
0:29Gardner. welcoming you to another
0:30episode of your money guide on the side
0:33where it is my job to simplify what
0:35seems complex, add nuance to what seems
0:37simple, and learn from and alongside
0:40some of the brightest minds in money,
0:42finance, and investing. So, let's get
0:44started and get you one step closer to
0:47where you need to be.
0:49Today's episode focuses on something
0:51that impacts almost every single one of
0:54us at some point in our lives. The
0:57buying or leasing of a car and how if we
1:01don't understand the money and power
1:03languages of buying or leasing said car,
1:07we will bluntly get screwed. This
1:11episode will help you take back the
1:12power and learn the financial language
1:15that you need to know. But let's get
1:18something straight right from the start.
1:20This is not one of those episodes from
1:22another financial boomer voice where I
1:25tell you that you'd be a ding-dong to
1:27buy or lease a brand new car. I'm not
1:30here to guilt you into endlessly sifting
1:33through sketchy ads on Craigslist posted
1:35by user 263 Hemi for life or to pretend
1:39you should be thrilled driving a
1:4112-year-old Civic with no backup camera
1:43and three hubcaps. Personally, I love
1:47cars. Specifically, I love new cars. And
1:52because I myself am a fickle ding-dong,
1:55I love leasing new cars. I know, I hear
1:59you all saying this guy can't possibly
2:01be a financial voice who has any
2:04understanding of how finance works, but
2:06I'm just letting you know in advance,
2:07I've spent real money on cars, and I
2:10enjoy them thoroughly. Not because it's
2:13the mathematically perfect financial
2:15move, but because it genuinely brings me
2:19joy. Every time I drive a car I love, I
2:22feel better than when I am not driving a
2:25car I love. Even though I know this is
2:28personal finance sacrilege, including
2:30but not limited to how I'm about to
2:32present this. I believe buying a car or
2:37even leasing a car is a type of
2:40investment. It is an investment in my
2:43experience. I drive every day. I travel.
2:47I take meetings on the road. I take my
2:50dogs on car rides just for fun to get
2:53them out of the house. And driving a car
2:55that is quiet, reliable, and let's be
2:58honest, a little fun and maybe even
3:01fast. Well, that improves my quality of
3:04life in a way that no spreadsheet can
3:06fully explain. It is also one of the
3:08only things in life that I've decided to
3:10spend real money on, so I can usually
3:13get away with it without entirely
3:15breaking the bank. So, it should be
3:16clear, this episode is not about talking
3:18you out of buying or leasing a new car.
3:22It's about making sure you buy it or
3:24lease it the right way with the right
3:28knowledge, with strategy, not emotion.
3:32Because if you're going to spend real
3:34money on something that depreciates, aka
3:37not an investment, even though I just
3:38said it was, you owe it to yourself to
3:41make sure you don't get taken for a ride
3:44in the process. And before we jump in to
3:47the 10 rules that I have created to help
3:49you always get the most bang for your
3:51buck at the dealership and to understand
3:53all of their endless jargon and
3:55nonsense, I have one small favor to ask
3:58of you today. If you've been enjoying
4:00the show, it would mean a lot to me if
4:03you left a quick review. These reviews
4:06help more people find us and they make
4:08this endeavor 100% worthwhile. And if
4:11there's something you're not loving
4:13about the show or you'd like to see more
4:15of, please and always feel free to shoot
4:18me a note directly at
4:20[email protected].
4:23I read every message, even if I can't
4:25reply to all of them, and I internalize
4:28the feedback quickly. Remember, this
4:31show is for you. So, let's make it as
4:34great as we can
4:35together. Buying a car should feel
4:38exciting. For most people, it marks a
4:41fresh start, whether you just got a new
4:43job, you're growing a family, or you're
4:45splurging on a well-earned upgrade. But
4:48what should be a straightforward
4:50transaction, as all too many of us know,
4:53has quietly, well, loudly, become one of
4:56the most financially dangerous moments
4:58in modern consumer life. According to
5:01Kelly Blue Book, the average price of a
5:03new car in the US reached
5:06$47,000 in 2024. That's not a splurge.
5:10That's a down payment on a home, a year
5:12of college, or 10 years of compound
5:14interest gone in one whimsical
5:17afternoon. And it's not just the sticker
5:19shock that gets you. It's the back-end
5:22financing, the upsells, the
5:24depreciation, the insurance products,
5:27and the fine print that is designed to
5:30make you feel like you're getting a deal
5:31when you're actually giving one away.
5:34Today's episode is your defense plan.
5:37And as always, I have done my best to
5:39make this episode about the timeless
5:41principles that will be as true today as
5:44they will be in 10 years. We'll walk
5:46through the 10 most common traps and
5:49slip ups people make when buying or
5:51leasing a new car and how to avoid every
5:55single one of them. From financing hacks
5:58to timing strategies to what never to
6:01say when you're actually on a dealership
6:02lot. This is your guide to walking in
6:05prepared and walking out without
6:08regrets. Because in a game this
6:10expensive, the winner isn't the one with
6:12the nicest car. It's the one who didn't
6:15get screwed. So, without further ado,
6:18the 10 rules of car buying or leasing
6:21according to well, me, Tyler, your money
6:24guide on the
6:25side. Rule number one, never go to a
6:30dealership. Email, email, email. The
6:35moment you physically step onto a
6:37dealership lot, the power dynamic shifts
6:41drastically. They have done this
6:43thousands of times. You haven't. The
6:46salesperson is trained to build rapport,
6:49guide the conversation, and keep you at
6:51the dealership until you have been
6:53grounded down to a fine mess of
6:55impatience and anger until you're so
6:58ready to leave that you will buy
7:00anything they offer at any price just to
7:02get your license and keys back. Trust
7:04me, I've done that. That's why, without
7:08a doubt, and if you learn nothing else
7:10from this episode, the smartest way to
7:12buy a car starts by not going to a
7:15dealership, but by emailing several
7:19dealerships. Why? Because email flips
7:22the power dynamic. It removes pressure,
7:25buys you time, and most importantly,
7:28creates a paper trail. You want
7:31everything from the start in writing.
7:34the VIN number, the out the-do price,
7:38that's including taxes, tags, and fees,
7:41any applicable rebates, and the exact
7:45financing terms. This isn't just about
7:47transparency. It's about leverage. When
7:50it's in writing, they can't wiggle the
7:53numbers later once you get to the
7:55dealership. And here's the real
7:57advantage. Email lets you shop multiple
8:00dealers against each other without
8:02driving all over town or falling for one
8:05hard cell. Here is the template of the
8:08message you are going to send to as many
8:11dealers as you'd like. Hello, I'm
8:14comparing pricing across local
8:17dealerships for insert the exact make
8:20and model you'd like. If you can beat
8:23this price or offer better terms, please
8:25let me know and I will look forward to
8:27working with you. Dealers will respond
8:31to this type of message. And their
8:33response will most likely always be,
8:36"Well, hello. We would love to share our
8:38prices with you and we think you will be
8:40really happy with them. When can you
8:42come in to set up a meeting and
8:44discuss?" Nope. email back and make it
8:48clear that you're not coming in and this
8:50is a transaction that will begin and end
8:54via email and via paper trail. And if
8:57they tell you they don't quote over
8:59email, A, that's not true. B, that's not
9:03your dealership. Oh yeah, and C, they
9:05lost your business. Trust me, I bought
9:07my last three cars by doing this. And
9:10though many dealerships pretend they
9:11won't do this over email, yes, they will
9:14and the good ones do. Those are the ones
9:17that got my business and hence
9:19eliminated all negotiation nonsense when
9:21I went to get the car. The competition
9:25for your business alone gives you the
9:27upper hand. You're no longer the lone
9:29buyer walking into their territory. You
9:32are now the informed customer, playing
9:34them against one another from a position
9:36of strength and from a position of
9:38emotional detachment, which will always
9:41be a good thing when we're making
9:43financial
9:44decisions. Rule number two, never talk
9:49monthly payments. This is the oldest
9:52trick in the dealership playbook. Get
9:54you and keep you focused on the monthly
9:57payment and they control the rest of the
10:00math. As I've said in some of my content
10:02before, if you were to give me 2 minutes
10:04and a financial calculator, I'll have
10:07you out the door paying $1 a month for
10:09whatever car you want, and I'll still
10:13find a way to win because the monthly
10:15payment means nothing. And that's too
10:18bad because most of us don't walk into a
10:20dealership saying, "I want to pay
10:23$37,800 for that car." We walk in
10:26saying, "I can afford $600 a month." And
10:30that's exactly what we end up sharing
10:32with the salesman first. And it's
10:34exactly how we end up
10:36overpaying. According to the Consumer
10:38Financial Protection Bureau, dealerships
10:41frequently manipulate loan structures to
10:43lower the monthly payment while
10:44inflating the overall cost through
10:46extended loan terms, hidden fees, or
10:50padded interest rates. Additionally,
10:52dealerships can and do lower the monthly
10:55payment by asking for a higher down
10:57payment, offering you less for your
10:59tradein or by asking for a higher
11:02residual payment at the end of the lease
11:04term. Let's take a quick look at the
11:06math. A $40,000 car at 4.9% over 60
11:12months costs you about 752 bucks a
11:16month, and you'll end up paying around
11:18$45,000 over the life of the loan. But
11:21that same car at
11:23$650 a month might sound like a deal
11:27until you realize the dealer has
11:29stretched it to $84 months at a higher
11:32rate like
11:34$7.9% and now you're paying over
11:38$54,600. That's about $9,000 in
11:41additional cost all for a lower monthly
11:44payment. And that's literally just
11:47scratching the surface of ways to get
11:48the monthly down. This is why you will
11:52always hear car dealers with the
11:55following question. What are you looking
11:58or able to spend a month? The second you
12:01say that number, they win, you lose. And
12:04dealers love this model. The longer the
12:07term, the more interest they earn and
12:10the easier it is to get you to say yes.
12:12But you're not buying a payment plan.
12:15you're buying a car. Remember, a payment
12:18plan is just a delivery method. Your job
12:21is to make sure the product itself isn't
12:24overpriced. So, keep your eyes on the
12:26total number, not the monthly illusion.
12:30Rule number three, just say no once
12:35you're in the finance room. So, you
12:38think the negotiation is over once you
12:41agree on the out the-do price. Well, it
12:44isn't. It just moves into a different
12:46room. One with lower lighting, fewer
12:50windows, and a job title you didn't
12:53expect. F and I, or finance and
12:57insurance. And hint, there's a reason
13:00that the finance folks at dealerships
13:02are often paid more than anybody else.
13:05This is where dealerships make their
13:07real money. Not off the car, but off of
13:11you and your fear. Once your guard is
13:15down and you believe the negotiation is
13:18over. According to the National
13:20Automobile Dealers Association, FNI
13:22products now account for over 25% of
13:25total dealership gross profits. That's
13:28not a side hustle. That's their business
13:31model. And you're getting taken. Here's
13:33how it plays out. You're tired, you
13:36know, because you made the mistake of
13:37going to the dealership, and now you've
13:39been there for 6 and 1/2 hours. You've
13:41test-driven the car, negotiated the
13:43price, maybe even celebrated a bit
13:45because you finally locked in a number.
13:48Then the finance manager starts sliding
13:50papers with small text across the desk.
13:52Extended warranties, gap insurance,
13:56paint protection plans, theft
13:59deterrence, key replacements, vin
14:01etching, all sold with urgency and fear
14:05tactics. If you think I'm kidding, just
14:07say no immediately and see how quickly
14:10they try to convince you that you're
14:12making the biggest financial mistake of
14:14your life and are going to total your
14:15brand new car on the way out of the lot.
14:18This has happened to me multiple times.
14:21Suddenly, your $40,000 car is $44,000
14:24and climbing. You've walked into a
14:27coffee shop, bought a $4 drink, and left
14:29with a
14:30$1,200 mug. And note, if you truly want
14:34gap insurance, which is the insurance
14:36that covers the difference between what
14:38you owe and what your car is worth if
14:41totaled, which yes, can be a decentsiz
14:44gap due to the immediate depreciation of
14:46the vehicle when you drive off that lot.
14:49Check with your autoinsurer first.
14:52Geico, Progressive, State Farm, those
14:55companies will often offer gap insurance
14:58for a fraction of what the dealer will
15:00charge. But they know most people don't
15:02go in that prepared. The rule here is
15:05simple. If you didn't plan to buy it
15:06before you walked in, you don't need to
15:09buy it now. Say no clearly and
15:12repeatedly. And you're not being rude,
15:14even though they will make you think
15:16that you are. You're being smart. The
15:18FNI office isn't where you protect your
15:21car, it's where you need to learn to
15:23protect your
15:24wallet. Rule number four, buy a car that
15:29is already on the lot. Here's a little
15:32known truth about how dealerships
15:34actually work. And most people do not
15:36know this. Every car sitting on their
15:40lot is not an asset. It's a liability to
15:44the dealership. Because most dealers
15:46don't actually own their inventory. They
15:49finance it through what's called a floor
15:52plan loan, which acrus interest monthly
15:55that they have to pay so long as the
15:58cars sit on their lot. And just like you
16:01don't want to pay interest on your
16:02loans, neither do they. According to
16:05Automotive News and Cox Automotive,
16:08dealers typically pay between 1 and 2%
16:11in monthly interest on unsold vehicles.
16:14That means a $40,000 car could be
16:16costing them $4 to $800 a month just to
16:20let it sit. Think about that. When they
16:23say they just can't find a way to reduce
16:25the car's price by 500 bucks, uh, yes.
16:28Yes, they can. And at the right time,
16:30yes. Yes, they will. That ticking clock
16:33is your negotiating leverage. This is
16:36the same as buying a house that's been
16:38listed for months. The dealership is not
16:41thinking about the same profit margin
16:43anymore. They're thinking about how do
16:45we stop the bleeding. And if that car is
16:48already loaded with options or painted a
16:50less popular color, even better. You're
16:53their chance to move stale and pricey
16:55inventory. So, you can start by asking
16:58the salesperson directly, what's been on
17:01your lot the longest, which VINs have
17:04the most aging days, and do you have any
17:07floor plan inventory coming up on its
17:1090day deadline? Again, if they're good
17:13folks wanting to do good business, and
17:15many of them are, they'll tell you
17:17because they want to move that
17:18inventory. This isn't just about price,
17:20it's about motivation. A freshly arrived
17:23customordered car has no urgency
17:25attached, but one that's been racking up
17:28carrying costs for weeks, that's a deal
17:30waiting to happen. Rule number five,
17:34bring your own financing. But be
17:37strategic about this one. Before you
17:39step into a dealership, and again, after
17:42you've locked in a price via email, get
17:45preapproved for an auto loan. It's not
17:47just about locking in a good rate. It's
17:49about walking into the dealership with
17:52leverage. Without preapproval, you're
17:54flying blind. Whereas with one, you've
17:57set a benchmark and you've done what we
18:00need to continue to do by changing the
18:02power dynamic. You could start by trying
18:05your local credit union or a reputable
18:07online lender. According to bank rates
18:10auto loan rate tables 2024 credit unions
18:13consistently offer interest rates that
18:16could be 1 to two percentage points
18:18lower than national banks and dealer
18:20arranged financing. And here's the quick
18:23math for you to consider. On a $40,000
18:25loan, the difference between 5 12% and
18:287% over 5 years could mean saving 1,200
18:31bucks in just interest. That's just for
18:34showing up with your own financing. But
18:36here's one interesting and nuanced
18:39twist. Once you have that preapproval in
18:42hand, let the dealer try to beat it. Why
18:44not? It's not a trap, it's a tactic.
18:47Dealers have access to very captive
18:50lenders like Honda Financial or Toyota
18:53Financial. And sometimes they're given
18:55incentive money from the manufacturer to
18:58secure financing inhouse. I once had a
19:01dealer ask me straight up if they could
19:04beat my 3 and 12% financing, would I
19:07finance with them? I said, "Yeah, of
19:09course." And they offered 2.9%. And off
19:12I went with my new Subaru WRX when I was
19:14going through my I wish I was 16 again
19:16phase. I told you I love cars. I just
19:20felt a little odd in that one at 27
19:22years old. If the dealer knows they have
19:24to beat your preapproval to earn your
19:26business, they might lower the rate,
19:28knock money off the car, or throw in at
19:31least a couple extras just to win the
19:33deal. You've taken what was once their
19:36leverage and you've turned it into your
19:38own. One key here is to separate the car
19:42price from the financing conversation.
19:45Lock down the out the-do price first,
19:48then talk about how you're going to pay.
19:51Whether you go with your preapproval or
19:53the dealer's offer, you win either way
19:56because you controlled the terms. Rule
19:59number six, do the depreciation math.
20:04Now, here's where we get into some more
20:06of the emotional components behind
20:08buying a vehicle. Most people don't buy
20:10a car. They buy a feeling. that fresh
20:13offthe- smell, the untouched seats, the
20:17upgraded trim package. Trust me, I get
20:20it because I do it every 3 years. And
20:22while that's fine in theory, it comes at
20:25a steep, often invisible cost,
20:29depreciation. Remember, even though I'm
20:32defining the buying or leasing of a car
20:34as an investment in experience, it is
20:36not, by traditional financial language,
20:40in investment because it depreciates
20:42immensely the second you drive off the
20:44lot. Sometimes as much as 20% in the
20:47first year and up to 60% in the first 5
20:51years. So, what does that mean in real
20:53numbers? A $50,000 SUV might be worth
20:56just 20,000 bucks 5 years later, even if
20:59you've taken great care of it. That's
21:01$30,000 in evaporated asset value. And
21:05most buyers never see it coming. They're
21:07too focused on the monthly payment, the
21:10color, or whether Apple CarPlay comes
21:12standard. So, just ask yourself this.
21:15Would you invest
21:16$50,000 into something guaranteed to be
21:20worth $20,000 in 5 years? and if so,
21:24what would make it worth it? Now, this
21:27also doesn't mean new cars are always a
21:29bad deal. Sometimes they make a lot of
21:32sense for people. You get a full factory
21:34warranty, predictable reliability, and
21:37immediate availability of whatever
21:39vehicle you might want, especially in
21:41tight supply years. If those things
21:43matter to you, great. Spending money
21:47anytime and always is about values, not
21:51dollars. Find what you value, name what
21:54you value, spend the money accordingly,
21:56or you're going to die with it. So, one
21:58strategy is you could look for nearly
22:00new models, cars that are 1 or 2 years
22:02old with low mileage and clean history.
22:05That way, someone else has taken the
22:08biggest appreciation hit, and you still
22:11get many of the benefits of a relatively
22:13new car. That's why most finance experts
22:15will tell you that the sweet spot is a
22:18three-year-old car that still runs well
22:20and has low
22:21mileage. Rule number seven, this is a
22:25big one. Separate deals always. Because
22:30here's one of the biggest mistakes
22:31buyers make. Walking into a dealership
22:35and saying proudly, "I'm buying a new
22:38car. I'm trading in my old one and I
22:41need financing." Well, congratulations.
22:44You've just handed them control of three
22:47profit centers at once. The smarter
22:50move, separate every deal completely.
22:54We've already been over the importance
22:56of starting first and always from
22:58negotiating the out the-do price of the
23:01new car. That's the full amount,
23:03including taxes, tags, and fees. And
23:06again, we do that via email. We get it
23:09in writing and we lock it in. Now, even
23:12via email, do not do not do not mention
23:19you have a trade-in. Why? Because just
23:22as we saw with ways they can screw you
23:24by focusing on monthly payments, if they
23:27know you're trading in, they can and
23:29often do inflate the value of your car
23:33to make you feel good and proud while
23:36quietly patting the price of the one
23:38you're buying. or worse, they'll lowball
23:41your trade completely and act like they
23:43gave you a deal elsewhere. It's
23:46literally shell game math and you lose
23:50every single time. So, we want to start
23:52by focusing on one shell at a time. Once
23:56you have the OTD price locked in, then
24:00go get your financing quote and then
24:03finally, if you want, bring up the
24:05tradein. This isn't some dink move on
24:07your part. It's as crucial as PEMDOS was
24:10to your order of operations in high
24:12school or middle school math. I don't
24:15know how smart you are. Whenever you
24:16PEMD dosed last. And what most people
24:19miss is you don't have to sell your used
24:22car to the dealership. The dealership
24:25knows that most people do prefer the
24:27ease of offloading the car immediately
24:30so that someone else has to deal with it
24:32and they capitalize on that. Often,
24:35however, you'll get a much better deal
24:37selling privately or through a platform
24:39like CarMax or Carvana. Even if you do
24:42trade it into the dealer, coming in late
24:45with that information gives you an edge.
24:48It's no longer part of the main
24:50negotiation. It's an afterthought you
24:52can use to your advantage. And if you
24:54ever want to see how true this is, just
24:56realize how few dealerships will
24:58actually purchase your used car after
25:01you've already locked in an out the door
25:02price. they no longer have as much of an
25:04incentive to do so. Remember,
25:06dealerships make money by bundling many
25:09deals together. You protect yourself by
25:12breaking them
25:14apart. Rule number eight, or should I
25:17say myth on this one. The myth is that
25:22leasing is the worst thing you could
25:23ever do with your money. I'm going to
25:25show you why leasing can be fine so long
25:28as you speak the language. Leasing gets
25:31a bad rap in personal finance circles
25:33and often for good reason. It's easy to
25:36get into, harder to understand, and
25:39downright punishing if you break the
25:41rules. But if you're the right kind of
25:43driver and you understand the math,
25:45leasing can actually be a smart
25:48financial move. Here's when leasing
25:51makes sense. You actually drive fewer
25:54than 12,000 m per year. You like driving
25:57a new car every 2 to 3 years. That's me
26:01and I prefer the nocost exchange at the
26:03end of the term versus the hassle of
26:05buying and selling a car every few
26:07years. Or you're using the car for
26:09business and can write off the lease on
26:11your taxes. In these cases, leasing can
26:15give you predictable costs, full
26:17warranty coverage, and no long-term
26:19ownership headaches. But you need to
26:22speak the language. And here are three
26:24terms that you need to know, and most
26:26people don't. One, the capitalized cost.
26:29It's the sale price of the car. They
26:31just call it something different. You
26:33can negotiate this just like a purchase,
26:36and you should. Number two, the residual
26:40value. This is big for leasing. This is
26:42what the car is expected to be worth at
26:45the lease end. It's what I would pay if
26:47I wanted to buy it at the end of the
26:49lease. The higher the value is, usually
26:52the lower your lease payment is. And
26:55number three, and perhaps the most
26:57important to me that really most people
26:58don't understand, money factor. This is
27:02where they get most people. Why on earth
27:04do they use language like this? I'd like
27:06to say I don't know, but I do know
27:08because it's the same in finance to
27:10confuse you into making costly mistakes.
27:14The money factor is the leases interest
27:17rate expressed in pure gibberish. to
27:21convert it to an APR, you multiply it by
27:242400. So, if you're staring at a money
27:26factor of
27:280.0025, that's a 6% APR. Leasing, as I
27:32noted, isn't always a bad deal. In a
27:35high interest rate environment, like
27:37we've seen post 2022, lease deals can be
27:40artificially sweetened by manufacturers.
27:43Automakers even often subsidize leases
27:45through their captive finance arms like
27:47Toyota Financial, Ford Credit, offering
27:50below market money factors or inflated
27:54residual values. That means you can pay
27:57less monthly because they're eating part
27:59of the cost to move inventory. In
28:02contrast, loan rates from banks or
28:03credit unions might sit at 6 to 9% APR,
28:06making traditional financing more
28:08expensive. And if you're thinking of
28:10paying cash, that's fine. But remember,
28:13if the lease is already heavily
28:14subsidized, it might actually be cheaper
28:17to lease and invest the difference.
28:19Especially if your cash is earning 5%
28:21plus in a high yield savings account or
28:23you have a long time horizon and you're
28:25comfortable investing in the markets.
28:27Leasing isn't always a bad deal. It just
28:29requires real math. You need to compare
28:32the total cost of leasing versus the
28:34total cost of ownership. And I hope the
28:36above terms have given you a sense of
28:37how you can do that. Rule number nine,
28:41back to the emotional component. Do not
28:45do not do not buy a car when you need a
28:48car. I know that sounds very
28:50counterintuitive. The dealership, even
28:53via email, they can smell you coming if
28:57you are in the market for a certain car
28:59and only that car and you want it right
29:02now. The moment you let that emotion
29:05take control, you've lost. Urgency
29:08becomes your enemy and the dealer's best
29:10friend. The more desperate you are, the
29:13less they will negotiate. You'll accept
29:15a higher price, a worse interest rate
29:17just to get the vehicle you want. Again,
29:21it's the same in home buying. There's a
29:23reason if you work with a buyer's agent
29:25that when you go into a home showing,
29:27they tell you to shut your mouth. That
29:30is why smart car and home buyers plan
29:33months in advance. You remove the
29:36emotion. I have emails into several
29:39dealers right now. I told you I love
29:42cars. Asking them to let me know when
29:44they can hit a certain price on a
29:46certain vehicle that I want. I don't get
29:48a lot of bites and that's okay because I
29:51don't need a car right now as I still
29:52have a year left on my current lease.
29:55But if I start now, I cast a wider net
29:58and who knows when one dealership might
30:00want to move that one vehicle at a
30:02certain time. I will outweight them and
30:05I'll do it from the comfort of my own
30:07home. Also, keep in mind the car you
30:09want will always come back around. Don't
30:12ever let them tell you this is a limited
30:14offer and you'll never see this model
30:15again. New models roll in, incentives
30:18change, leases get returned. You need to
30:21be able to walk away if the deal is not
30:24right for you. And we finally made it to
30:27rule number 10. don't buy until they
30:32need to sell. We've already touched on
30:35the fact that cars on the lot cost the
30:37dealership money via interest. And you
30:40already know you shouldn't buy a car
30:42when you need one. But here's the second
30:44half of that equation. Wait until they
30:48need the sale. Dealerships don't just
30:50make money on cars. They make money on
30:53hitting certain targets. This isn't a
30:56myth. They do have monthly quotas. They
30:59do have quarterly incentives. They even
31:02have year-end manufacturer bonuses. And
31:05when they're behind on those targets,
31:07the pressure is on from corporate. And
31:09that's when real deals can actually
31:11appear. According to JD P's dealer
31:14incentive calendar 2023, the best days
31:16to buy a car are the following. The last
31:19three days of the month, the final week
31:22of the year. major holiday weekends like
31:26Memorial Day, Labor Day, Fourth of July.
31:29And missing those targets doesn't just
31:31mean less revenue for dealers. It can
31:34mean forfeiting tens of thousands in
31:36back-end bonuses. And if selling you a
31:39car at a break even price helps them hit
31:42their number, they will do it. Again,
31:44I've done this and it works. The key is
31:48don't be in a hurry. Wait until they're
31:51in a hurry. This is when you want to
31:53show up, but again, only after doing the
31:57homework. Start your email negotiation
31:59early. Gather quotes, confirm
32:02availability, then walk in at the end of
32:04the cycle with your preapproval ready
32:06and your trade-in kept to yourself.
32:09Here's a quick closing thought for you.
32:12Buying a car is not just a consumer
32:14choice. It's a high lever financial
32:17decision that echoes through your
32:19budget, your net worth, and your mental
32:21bandwidth for years. The average car
32:24loan, wait for this, now stretches
32:26beyond 70 months. And for many
32:29household, it's their second largest
32:31expense after housing. So, this isn't
32:33just about driving. It's about designing
32:36the next 5 years of your financial life.
32:39And unfortunately, for the most part,
32:42car dealers have maintained the power in
32:44this relationship because most of us
32:47have completely normalized always and
32:50forever having a car payment. So, let's
32:53commit to slowing down, playing the long
32:56game, removing the emotions, and making
32:59sure we learn the language. Huh, that
33:02sounds a lot like investing in finance,
33:04too. Again, I will never tell you not to
33:07buy a brand new car, but I will always
33:10encourage you to spend on what matters
33:12most to you and do it in a way where you
33:14are from start to finish in full control
33:19of your transactions and ultimately your
33:23wealth. Thanks for tuning in to your
33:25money guide on the side. If you enjoyed
33:27today's episode, be sure to visit my
33:29website at tylergardner.com for even
33:32more helpful resources and insights. And
33:34if you are interested in receiving some
33:36quick and actionable guidance each week,
33:38don't forget to sign up for my weekly
33:40newsletter where each Sunday I share
33:42three actionable financial ideas to help
33:45you take control of your money and
33:46investments. You can find the sign up
33:48link on my website, tylergardner.com, or
33:51on any of my socials at social cap
33:53official. Until next time, I'm Tyler
33:56Gardner, your money guide on the side.
33:58And I truly hope this episode got you
34:00one step closer to where you need to be.

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