Off topic, but I don't want to deal with the dealers, and need suggestions of a good buying service out there (online or not)? In Northern Cali.
I just bought a new car. I used the AAA service which worked out great (I also got quotes thru the Consumer Digest site but there was no difference in prices quoted). The price was $400 above "manufacturers invoice". (Of course we all know that this does not represent the actual cost the dealer paid.) Another advantage of AAA method is that you avoid the gangs of sales people. If you are replacing a car then it might be best to sell that car separately. And don't forget the new federal tax laws re sales tax deduction vs state income tax deduction if you buy a new car (there are also tax incentives for buying cetain high milage cars such as the Prius).
I have purchased my last 4 cars on line through various services. I didn't like AAA - perhaps because of the attitude of the CSR (AAA has sure changed in the last 5 years). I would go through several including Vehix, Cars.com, Autofinder, and others and find out an average price for a given vehicle. Then request a quote and go for the best price. Forget about the dealer fluff (where they say it is important which dealership you buy a car from - beleive me - there is no difference - a Ford is a Ford in Sunnyvale and in Fremont). Instruct the dealers to only bid on cars they have (they won't tell you one way or the other most of the time). Play hardball - go one against the other. I believe the tax incentives for buying a Pruis have expired. The extra cost (A Pruis was $26K for the same type of car a Matrix cost of around $14K) - Run the numbers - unless you drive over 25K a year it would take you several years to recoup the extra costs of the Prius. Always play to win. A dealer can sell at below invoice cost and still make a substantial profit in the form of holdbacks, etc. Personally, I always start at $2G below invoice price and work from there. MSRP is only for cars in demand (Prius, etc) - 99% of the vehicles don't fall into this catagory.
Never buy new Buying a new car and then losing 20%-30% of your money as soon as you drive it off the lot is insane. You can get a 1 year old car with low mileage and let somebody else take the depreciation hit. With the current glut of used cars you can get as much as 40%-50% off the original price on a car that is one year old if you shop right. It should still have a warranty but there are good aftermarket warranties out there to supplement it. My last (and first but not the last) one actually saved me more than it cost. It is a no brainer if you buy a premium car with climate control systems running $600+ dollars. I purchased a 6 year 100,000 mile premium warranty on a Cadillac for about $1000. It has already paid for itself. With cars going 100,000+ miles these days without any major problems it is crazy to buy new. Buying from a dealer you are comfortable with and sticking with them is a good thing. Mine wouldn't for one minute think of screwing me. He knows I have a lot of cars left to buy and he doesn't want to lose that business...
Re: Never buy new In the case of the car I just bought it is a new model with few used ones on the market. I usually buy new cars in September/October when they are replaced by a newer model. The funny thing is that they can be bought for less than a used car of the same model and year. Another factor is financing; when you factor in finance charges the total cost differential narrows or disappears. If you are financing get pre-approved from a credit union. If you paying cash do not volunteer that fact until negotiations are complete.
In response to another poster, I usually buy used cars myself - depending on the model. I just bought a 2003 Matrix with 40K miles for only 11G. This is merely my commute car. (60 miles a day - whew!) I plan to buy a 2006 Mustang GT convertible (red of course) late next year. This will of course be a new car because usually used high performance cars are abused (my experience). What type of car did you or are you buying Han? Oh - another great pricing service is Carsdirect.com
I just bought a new Jeep Liberty. 0% financing and $2000 back. I don't care too much about the depreciation. I traded in my last Jeep when I bought it. It had ~250,000 miles on it.
