One of the things I really dislike is the idea of buying a new car. Scratch that, I just really dislike dealing with car salesmen because with the exception of one or two, you are surely going to get suckered, you just don’t know how much and most likely you will never find out. It’s different from buying anything else in my opinion (even a house) as it can be researched a lot easier and you can arm yourself with all the needed information before going into a store.

With cars there are just too many unknowns that you simply cannot find out (for mortal people at least) before starting the process, hence that uneasy feeling of “wonder where I rank in the list of people this guy suckered” feeling just won’t go away. The car industry would sure benefit from more transparency as I don’t mind dealerships making a living/profit as long as I am paying very similar to what the other 20 people who bought the same car and that just is not the case.

Anyways, we needed a car for the next many years that we can use as the kids grow up, so we decided to go with a mini-van (which is another post by itself) and Honda Odyssey seemed the natural choice. Next came the buying part. We decided to not trade-in to give the sales person one less parameter they can milk more profit from. This is the story of how we tried our best to minimize the risk of overpaying for the car.

In short, it came down to the following steps (we happened to get our car right towards the tail end of this year’s model and in fact only teen nr of odysseys of the model we wanted remained in our vicinity as one dealer looked it up):

1. Know the EXACT car you want, brand, model, down to options, exterior and interior colors.
2. Find out how much the MSRP price & invoice price (e.g. from truecar.com), how much the holdback is (usually 2 or 3%) and if there are (marketing) incentives offered to dealers/consumer by the manufacturer (typical ahead of next year’s model to get rid of last inventory of the current year)
3. Calculate what price you should be paying based on this info e.g. invoice price minus holdback minus incentives (this is as far as you can get with arming yoruself with the info)
4. Get a list of quotes from internet (e.g. from InvoiceDealers, Cars.com, Yahoo!Autos, Autos.com, Edmunds.com, MyRide.com and CarsDirect)
5. Get a list of all dealers within a readius of X miles from your house (ie as far as you are comfortable to drive to get the car if you get a good deal) from yellowpages.com
6. Start calling the farthest one.
7. Important! Ask for the fleet manager or internet sales (fleet manager is someone who is on a fixed salary vs sales people that get commission based on how much they sell)
8. Tell the person you are looking to buy a car today (don’t lie if you are not planing on this) and are calling a few places to get the best price and go in and close the deal. Then ask them what they can offer if they have the car in stock.  If they are savvy they will ask what price you currently have and you can share the lowest price you have and ask if they can beat it. Here is where it gets tricky. When I did this, a lot of them would just say thats a good deal, you should order it from the internet then. Don’t waste time and move on to the next one as if you want to wait, you can always order it from the internet site.
9. Make sure to confirm that this is the *bottom* line price (usually including everything but tax) as otherwise you will be surprised how much other fees they will try and insert in there. Some will refuse to give a bottom line price over the phone saying you will use it to call the next guy for a lower price. Again, don’t waste time, you started by telling him/her you are looking to buy a car today and if he is not trying to work a deal, chances of getting a good deal from this person are next to none.
10. If they do, ask to call back, call the next dealership closer to you and repeat the process until you get the price closest in step 3.
11. Go and buy the car!

Common comment from sales person : I am giving you the car at invoice and not making any money. Well, they may have paid the price of invoice to manifacturer yes, but then they get different rebates and holdback, so in reality that is not how much they paid. Example: if you buy a watch for $20 and you get a mail-in rebate for $8, your invoice was $20 yes, but you actually paid only $12.

How did we do? After buying the car, it turned out one of the parents whose kids are in the same age group as our daughter and we have seen each other a few times works at a dealership and when I told him about the price we paid for the car, he said he would look into it and told us later that we got a really good deal, as good as it pretty much can get for this area.

and here is a very comprehensive site about buying a new car.