How to Buy a Car Like a Dealer

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Most people buy a car from a dealer, paying for a markup in return for various services. Dealers act as middlemen between the consumer and wholesale distributors. Many wholesale distributors sell vehicles in dealer-only auctions for prices far lower than the general public can find at any location. In this wikiHow we'll look at the basic steps to take in order to purchase a car at or near wholesale cost.

Steps

1. Know the difference between a dealer-only wholesale auction and a public, repossession or other retail auction.
   
   • A dealer-only auction requires a car dealer license in all 50 states and is the main way dealerships rotate excess inventory. Unlike public auctions dealer-only auctions tend to offer close to new cars, new cars, recent trade-ins or just off-lease vehicles. In addition, many vehicles are detailed, have existing warranties and are carefully rated as to condition.
     
   • Public car auctions are open to anybody, including savvy dealers, so the prices may not be as low as the hype suggests. You see these advertised all over the place including online and in the backs of newspapers.
     
   
   
2. Decide which car you want, the options you need, and the condition for which you are willing to settle. Be as flexible as you can as you will be buying at auction.
   
3. Use an independent source to determine the wholesale and retail values of your target vehicle. The two most frequently used sources for this are the NADA guide and the Kelly "Blue Book".
   
4. Settle on a budget. Do not forget that your final price will include taxes, registration and other fees.
   
5. Decide that you will not exceed this budget under any circumstances; a key aspect of buying a car like a dealer is not to let emotions cause you to spend more than you decided to.
   
6. Get access to wholesale auctions using one of these methods:
   
   • Locate, research and retain a proxy buyer or proxy dealer who has access to wholesale auctions. A proxy buyer is an individual (sometimes a group) who has a legal dealer license and runs a service where he or she attends wholesale auctions to buy an individual car for you.
     
   • Acquire a dealer license. This is typically a time-consuming and expensive process that is not practical unless you plan to buy and sell cars as a business. States rely on taxing dealerships for income, so there is little or no incentive for a state to grant a license to an individual who does not plan to operate as a car dealer.
     
   
   
7. Research local auctions to find out times, locations and get a list of available vehicles. Once you have found one that has the vehicle you want, make arrangements to attend the auction or have your proxy buyer attend the auction.
   
8. Make any necessary financial arrangements. Each auto auction will have its own terms; verify these in advance make sure that you have the correct payment options available if you win the car.
   
9. Stay in close contact with your proxy buyer while locating the car you want through purchase and delivery.
   

Tips

• Check out the CarFax and recall list for that particular car you are searching for.
  
• Check for the value of the vehicle on websites such as KBB.
  
• Follow the same guidelines you would for buying any new or used car.
  
• Compare proxy-dealer services carefully, including fees, availability of warranty and any other factors.
  
• Buying at wholesale often includes an original manufacturers' warranty. It is a good idea to select this option.
  

Warnings

• Make sure you are working with a reputable proxy dealer who won't disappear after your purchase.
  
• In most states it is a misdemeanor offense to buy or sell too many cars per year without a dealer license. This number varies by state, so be sure to know what your laws are.
  
• Beware of traditional car dealers who offer a wholesale or proxy service. Why would they do this? If something is too good to be true, it probably is a ripoff.
  

Related wikiHows

• How to Become a Wholesale Car Dealer in California
  
• How to Buy the Perfect Car
  
• How to Buy a New Car
  
• How to Buy a Used Car
  
• How to Buy a Used Car from a Private Party
  
• How to Decide Whether to Lease or Buy a Car
  
• How to Buy or Lease a Car when You Have Bad Credit
  

Sources and Citations

• http://www.ThatsMyNewCar.com
  
• http://www.NADA.com
  
• http://www.CarFax.com
  
• http://www.KBB.com
  
• http://www.used-car-find-it.com/used-car-auction.html
  

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Funny Superbowl Commercial

What does that mean?

Invoice Price
This is the manufacturer’s initial charge to the dealer. This usually is higher than the dealer’s final cost because dealers receive rebates, allowances, discounts, and incentive awards. Generally, the invoice price should include freight (also known as destination and delivery). If you’re buying a car based on the invoice price (for example, "at invoice," "$100 below invoice," "two percent above invoice"), and if freight is already included, make sure freight isn’t added again to the sales contract.

Base Price
This is the cost of the car without options, but includes standard equipment and factory warranty. This price is printed on the Monroney sticker.

MSRP (Monroney Sticker Price)
This shows the base price, the manufacturer’s installed options with the manufacturer’s suggested retail price, the manufacturer’s transportation charge, and the fuel economy (mileage). Affixed to the car window, this label is required by federal law, and may be removed only by the purchaser.

Dealer Sticker Price
This is usually on a supplemental sticker, is the Monroney sticker price plus the suggested retail price of dealer-installed options, such as additional dealer markup (ADM) or additional dealer profit (ADP), dealer preparation, and undercoating.

Tips from Mrs. Cheese

Mrs. Cheese is a very shrewd negotiator, a bunch of years ago when she decided to buy a new car, a Volkswagen Jetta she had a great plan of attack. She refuses to pay anything more than $1,000 over MSRP. So how does she do this. She played all of the Volkswagen dealers against each other. She had a starting point where she got one dealer to agree on a price then she would call another dealer and say I got this quote on a specific car, can you do better. She would continue to do this until she got the price she wanted. Who says women can't buy cars? Not me!

Sales people and their one liners

Old and tired one liners sales people like to use on you. It's funny do they all take the same class?

"You're stealing food from my baby's mouth" He/she probably has no children at all.
"Everybody pays this fee" No they don't people who are shrewd and do their homework often pay much less.
"We're losing our shirt on this deal" No they're not if they were they wouldn't do the deal.
"The web sites you got the prices from are wrong." No they're not, if they don't want to do that deal I'm sure you can find someone who will.
"This car won't be here tomorrow" How in the hell would they know that? Are they a fortune teller?
"The bank requires you to buy the extended warranty to get loan approval" That's just pure crap.
"Do you want the car? What will it take to make you sign today?" For you to agree to my price!

New Car Buying Tips 101

DO NOT let Dealer "A" locate your new car from Dealer "B"... Don't do it!
This is where most complaints are made. It is strongly discouraged for car buyers from letting Dealer A get your new car from Dealer B. Sometimes due to geography and lack of dealer coverage while buying a car, you may have no choice. Some dealers routinely locate new cars for car buyers and make them quite happy. But most of the time complaints are made, it is from buyers about this. The complaint ratio is so high that is wise for you to avoid this situation. It's a crap shoot and the house always wins. The suggestion is to find out who Dealer B is and go buy a car from them directly. One dealer's advice is if Dealer A offers to locate a new car from Dealer B, don't sign anything until you've seen the car, or sign a letter of intent that the contract is not binding until you have seen the car and given your ok. I hear a ton of games and scams when dealer A has the car shipped from dealer B, because of towing costs, and dealer A loses the holdback to the original Dealer B. All sorts of fees show up. Even worse, the wrong car shows up and you are stuck buying car you don't want because you put down a deposit! I also get lots of complaints about missing MSRP stickers, which is a felony. You'll eliminate these issues if you buy a car from the dealer who has the car. Search all the dealer web sites for their inventory. Before you give ANY money, be sure you have a written buyer's order from them clearly stating what new car you are buying, the VIN#, the color, and all the options, so there is no doubt what you are paying for. If they give you bogus lip service about "not knowing the VIN# yet", they are lying.

A great resource to compare cars.

I found this great site that helps you compare different types of cars, from top to bottom.

Cars.com