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I’ve bought 10 new cars in my lifetime, and I’ve learned a lot in the process. Car-buying may have changed, but the lessons remain useful.

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Are you buying (or selling) a car or, for that matter, anything else? I certainly absorbed a few useful principles en route to my economics degree, but I’ve learned far more in the actual trenches of the free market. You might find some of it helpful.

We’ll start with two basic and general principles:


Like everything else in our economy, new cars (except in rare cases; more on that later) are sold at a profit. Although your mission is to pay less than most people, you must remember that selling cars is work, sometimes HARD work, and no consumer can reasonably expect employees in our economy to work for free... and the wages for sales personnel come out of the mark-up on your car.

In the larger picture, capitalism is a fantastic paradox– ideally, a free market provides consumers with the best possible products at the best possible prices; and yet– in the harshest possible light– a capitalist enterprise tries to sell the worst stuff it can get away with at the highest price it can get away with. And by necessity, producers sell stuff for more than it costs to make it. Does that mean that capitalism is evil? It can be… greed is a powerful motivator that often compels bad or illegal behavior. And yet I’m always mindful of a great quote in one of my old textbooks– “The difference between capitalism and socialism? Under capitalism, Man exploits Man; under socialism it’s just the opposite.” And I’m also fond of telling people that economic growth without capitalism is possible, just as population growth without sex is possible. However, in both cases the primary motivational force is missing. Let’s just say that when it comes to supporting a comfortable middle-class lifestyle for many millions of citizens, capitalism is the second-worst system in human history… with all the others tied for last.


Prior to the dawn of cyberspace, the car dealers had the upper hand in pricing because comparison shopping was intentionally difficult. Now, however, it is easy to figure out what any new car should reasonably cost. Merely googling specific car models will usually take you down a rabbit hole in which you enter your zip code and thereby subject yourself to an onslaught of communications by land, sea, and/or air from every dealer in your area code. I recommend instead starting with reviews by Consumer Reports and the major car magazines (Car and Driver, Road and Track) and especially Edmunds. After doing your due diligence, you will have an excellent idea of the going rate for the car you want to buy.

Armed with that valuable information– from an actual fact table rather than the oily lips of some smooth-talking, cologne-drenched car salesman– you are ready to rock. So buckle up, my friends, because you and DannyM. are about to wipe the greedy grin off this slimeball’s face–

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The single best shopping advice I’ve ever heard– whether buying a business suit or a piece of land– is to PLAN YOUR PURCHASE! In other words, know what you want to buy, how much you are willing to pay for it, and where to find it. While I have my safari jacket on, I’ll share this– by Opening Day of each deer season, smart hunters already have a general sense of the nearby deer population and their habits… along with space in their freezers in case they are successful. Likewise, the smart car buyer already has a specific car, price range, financing lined up, and the monthly payment all figured out before heading to the dealer.


A few years ago, the timing was absolutely right for me to buy my daughter a car. I was making decent money, and she was in starving artist mode while driving a 20-year-old death trap of a Volvo all around New England to her weekend bike races. Even though she's blessed with a far sharper business mind than mine, I suggested that this might be a useful learning opportunity for her.

First we ID’d the right car— a new Chevy Spark. (Other entry-level cars that caught our attention were the Nissan Versa, Mitsubishi Mirage, Kia Rio, and the Hyundai Accent.) Then I did my in-depth price homework and found a dealer near her. “I’m going to buy my daughter a Chevy Spark,” I told the salesman, “and I’d like to buy it from you,” He seemed unaccustomed to such directness; indeed, I had just done 95% of his job for him. He might have been drooling into his phone.

“Ah… GREAT! We have just the right—“

“No,” I interjected. “I don’t need it right now, or a week or a month from now. I’m going to buy it when the end of model year close-outs become available. I have an 800-plus credit score and high enough income to pull the trigger whenever the right deal comes along.” I left him with my contact info. (End-Of-Model-Year Closeouts are great deals because the manufacturer has already made tons of money on the model and just wants to push their remaining inventory out the door to make room for the next version. Getting stuck with old inventory reflects badly on the car, the dealership, and the manufacturer. If you have time to wait for the best deal and can live without getting your favorite color, this is a great way to go.)

Three weeks later my phone rang... same salesman, only he sounded breathless.

“We’re getting three of last year’s new Sparks tomorrow, and we need to blow’em out fast. Three grand below MSRP! I figured I’d call you first.” (With these cars, “three grand below MSRP” meant a hefty 22% discount.) Further conversation revealed that they were automatic transmissions rather than manuals, and that one was black, one was silver, and one was blue.

“Blue” was my one syllable reply. I then instructed my daughter to go to this dealership half an hour before they open and physically defend this car from other buyers by any and all means necessary while I closed the deal from afar. Three days later she was driving a brand new Spark that she nicknamed “Blueberry.” (Women tend to name stuff they really like.) And then she was able to sell it two years later for more than I paid for it. This almost never happens, especially with economy cars.

Aside from the obvious “Do Your Homework,” the biggest lesson from this transaction was–


This advice also came into play when I was selling a two-year-old Hyundai Accent a few years ago. In addition, I learned– on the spot– a new and completely different lesson that has served me very well... how to negotiate by not negotiating.


The dealership where I bought this Hyundai stands out as especially sleazy even among their industry peers along the same “AutoMile” in our city. Two years after my purchase, Hyundai was replacing this version of the Accent with a “new and improved” (and of course more expensive) iteration. This dealership reached out to me, requesting that I come in for a quote because they wanted to buy the car back from me. It didn’t take long to figure out why– the bastards wanted to sell this old car at the new price! So I made a trip to this dealer– but only after checking with two other Hyundai dealers, who were either A) too honest to understand why any dealer would want to buy back such a car; or B) too dishonest to offer me a remotely attractive or fair price.

I walked into my dealership, which is one of those where the salespeople take turns waiting on customers. My assigned salesman was an older man with a thick Russian accent... not a good start. As a Cold War history buff, I am well familiar with the Russian methods of international treaty negotiation– their representatives to this peace conference or that were always authorized to accept concessions, but never to make them. Armed with this background knowledge, I immediately concocted a novel strategy (at least novel to me)-- what I call the “Secret Number Gambit.” The conversation went like this–

RUSSIAN SALESMAN: So… you want to sell car?


RS: No? Then why you come in?

DM: You asked me to. Out of professional courtesy I am giving you an opportunity to buy it.

RS: So… how much you hope to get for car?

DM: Listen– I’m a really lousy negotiator, so I never negotiate. (If they can lie, so can I.) So here’s how this is gonna work– I have a number in my head, and I’m not going to tell you what it is. (Pointing) See that guy at the desk that’s higher than all the others? I’m guessing he’s the boss, and he has to approve everything you do. So go over and ask him the MOST he is willing to pay for this car. You get ONE chance… no back-and-forth, no counter-counter offers or dickering. If I like the number, I’ll shake your hand and give you the keys. If I don’t like the number, I walk out the door and drive away. ‘Cause I’ll be perfectly happy driving this car for the next three years.

The old Russian stared at me for a long moment. I stared back, stone-faced and not blinking. He walked over and had an animated conversation with the boss, then he returned with their offer... which was a thousand dollars higher than my secret number. The big lesson–


(Because you will ALWAYS lose.)

Instead, feel free to use my “Secret Number Gambit,” which I have successfully used several times since. Of course, more and more car dealerships are adopting a “no dicker sticker” approach, so the negotiation (or non-negotiation) is usually about the trade-in allowance. No problem... because here’s another lesson I happily learned–


Get your trade-in car thoroughly detailed before bringing it in for an offer. When I was in the process of purchasing my current vehicle, I spent over $300 on a super-deluxe detail job for my trade-in, a 2015 Toyota Tacoma. I asked that everything that could be polished be mirror-polished, and that every molecule of matter that didn’t come from the factory be removed. When I brought it to the dealer for the appraisal, I did my usual Secret Number Gambit. The dealer, knowing that he could probably re-sell this immaculate, shiny vehicle within 24 hours at full price, offered me a full 25% more than my Secret Number... a difference way bigger than the detailing expense.

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Some other random pointers and lessons learned–


A dealership might understandably be reluctant to buy your decade-old car for resale on its lot, even if it runs well. In such a case they might offer you a token trade-in allowance and then junk it, so you'll likely do much better advertising it and selling it yourself. The upside might mean an extra thousand bucks or more; but downside is rather obvious— you risk having, say, a serial killer meeting you in person for a test drive. (Alas, life is full of trade-offs.) If you do sell your old car directly, make sure you execute all the necessary paperwork and make it clear IN WRITING that you are offering no implied warranty and that the car is being sold “as-is." Take sensible security measures. And do NOT accept a personal check (they bounce) or cash (lots of reasons)… demand instead a certified bank check.


A new car has three huge advantages over a used car– ONE, It is generally 100% reliable… enough so you can count on at least two years of worry-free driving. Remember that people sell used cars for a reason, so when your used car unexpectedly breaks down, you will have an unplanned expense and perhaps miss a day or more of work. TWO, new cars come with a warranty… so if it does break down, you are at least covered for the tow and repairs, and maybe even a loaner. And THREE, new car loans have lower interest rates and longer terms than used car loans, and therefore can be as low as $300/month. And speaking of loans…


Car dealers basically originate loans on behalf of banks… and like the shady mortgage originators in (profanity alert) THE BIG SHORT, they make a hefty commission, one that manifests itself with car loans as an inflated interest rate for you to offset the immediate kickback to the dealership. When my salesman helpfully “found me a loan” with Bank of America for my most recent vehicle purchase, I went to BoA myself and beat his rate by more than a full point. (It helped that I had an active credit card account with BoA.)

And finally,


At the risk of condescendingly stating the obvious (the heart and soul of mansplaining) I'll nonetheless spell this out-- depending on your circumstances, you might be able to adopt a healthier lifestyle AND essentially have safe and reliable transportation for FREE by re-thinking your monthly budget.

Do you buy alcohol in a bar? If so, you’re getting needlessly fleeced by experts. If you must occasionally socialize in public, establish a limit of, say, 1 drink per week unless someone else is paying. And if you have the space, set up a cozy mini-bar at home (or, better yet, a wine rack) and enjoy yourself there with friends or dates. Home bartending is fun, and you get to control the music. Strangers won’t hit on you or spike your drink. Atmosphere? Invest $50 in a potted palm and a dimmer switch at The Home Depot. It doesn’t take much.

Do you dine in restaurants? Cook at home. You’ll eat way better for way less. (We post a lot of restaurant-quality recipes on this site.)

Gym membership? Try Planet Fitness for 10 bucks a month. It’s no one’s notion of a spa, but a treadmill is a treadmill, and 20-lb. dumbbells weigh pretty much the same everywhere.

Do you smoke? A new car is one more great excuse to quit. Not only will you be healthier and wealthier, but also your new car will have a much higher resale value if you haven’t used it for a 4-wheeled ashtray.

What is your monthly cable bill? Phone bill? Hair, nails, eyelashes? If you go halfway natural, you might just start attracting people who like you for YOU. Coffee? Brew your own and save $2/cup, or $40-80/month. Grocery shopping? Walmart is the world’s largest distributor of organics. Unless you’re a celebrity, no one will care that you shopped there, and quality produce can’t tell where you bought it. Bag lunch? Yes.

I could go on and on, but I won't; I'll just conclude that if you adopt only a few of these changes, you might well free up enough money to completely support a monthly payment for a brand-new, trouble-free car.

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Do the aforementioned lessons and principles still apply in the age of COVID? Certainly not like before... the car market, like so many things we've long taken for granted, has fundamentally changed into something unrecognizable. It's a seller's car market right now, so the power has definitely shifted. We'll have to wait and see. In the meantime, the tools for smart buying will surely apply beyond the automobile lot.

And one last tip about successfully negotiating your way to a better and/or cheaper car, or toward anything else that improves your living circumstances– remember to keep a straight face when you get a great deal. Strive to frame every outcome as a win-win, even if it isn't. Gloating or making other people feel defeated invites bad karma.

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