Is Buying a Car a 2-Person Job?
Sure, it’s fun to support your friend when they go car shopping. You get the vicarious thrill of a big purchase and a whiff of intoxicating new car smell.
But do you have what it takes to actually help — not hurt — your friend?
Before you assume this role, you should know that the stakes are high, especially now, when there is a shortage of vehicles and prices are inflated to historic levels. Walking away from a car has consequences; there may not be another to buy. But so does paying thousands over sticker.
After being a car-buying advisor for dozens of my friends, I’ve found that it requires being equal parts a car guy, psychologist and financial advisor. But there’s even more to it than that — as I’ll describe later.
Strength in numbers
Former car salesman Mark Chevalier often had customers who brought along a friend to his Washington D.C.-area dealership. Facing two shoppers definitely changed the dynamics, Chevalier says, making it difficult to know who was making the decisions.
Now a professional photographer, he recommends bringing someone along to the dealership “because I know what happens behind the scenes.” But choose wisely, Chevalier says, since all too often he saw car-buying duos arguing over which car to buy.
“Not just anyone will fill the bill,” writes Ron Montoya, Edmunds.com senior consumer advice editor. “The right person … can help you spot any inconsistencies in the deal, fend off potentially pushy salespeople and create leverage in your negotiations.”
If your friend is purchasing a vehicle from a private-party seller, you can help them stay safe and be an extra set of eyes to inspect the car.
The right person for the job
So are you up to the task? Here are five questions to help you decide whether you would help or hurt your friend.
1. Do you know the automotive market?
When your friend asks, “Which car should I buy?”, the best response often is, “Well, what cars are you looking at?” Usually, they already have at least one car in mind, maybe something they saw in a TV commercial or social media ad. Their answer helps narrow the field considerably.
Once you have a starting point, encourage your friend to consider other cars in the same segment, for example, midsized SUVs. Using a car finder tool found on most automotive shopping sites and car-buying apps, like Edmunds or Autotrader, you can quickly review the specifications and features of competing vehicles.
If your friend isn’t sure about how much car they’d need — maybe they can’t decide between a van and SUV — help them talk through what is appealing to them about each car, then discuss potential downsides. This could help them determine the best fit.
Lastly, you’ll need a time frame. Can your friend wait a few weeks for a car to come in? A few months? If they need a car today, you’ll need a long list of backup candidates — and the budget to pay the premium price an unclaimed car on the dealer’s lot can bring.
2. Do you know the best way to finance a car?
Many shoppers don’t think about financing until they are at the dealership and have fallen in love with a new car. Big mistake.
First, they’ll need to determine if they plan to buy or lease the car. Next, as their friend and advisor, encourage them to determine how much they can afford to put as a maximum down payment and how they will pay for the car before they contact a seller or set foot in a dealership.
To gain an understanding of all of their finance options, encourage them to check their credit score and apply for a pre-approved loan. Once they know what interest rate they qualify for, they can put the information in a car loan calculator and estimate the best down payment and loan term.
In the end, you need to have a number that represents their buying power, their maximum out-the-door price. You will need to decide many things at the dealership, but what your friend can afford to spend is not one of them.
3. How are your negotiating skills?
The internet has opened an easier route for negotiating by using car-buying sites and apps. These sites offer databases of vehicles at your local dealerships and private sellers, depending on the site. You can suggest that your friend solicits quotes from multiple dealerships to find the best price in your area — or you can even pull some quotes for your friend.
But internet negotiations may not be possible these days. In fact, you may need to move quickly and in person to get the car your friend wants. You can help in several ways:
- Agree ahead of time on an opening offer and a maximum price to pay.
- Write down the numbers as the negotiation goes back and forth.
- Check figures on your phone’s calculator.
- Remind your friend to ask for an out-the-door price that will reveal add-ons and extra fees.
- Urge your friend to leave if they exceed the previously agreed-on maximum price.
4. When was the last time you were in a car dealership?
Your friend asked you to come with them to the dealership because they are afraid of being pressured and outnumbered. But you need to be more than just a warm body. You should know the general flow of a car deal and where there are potential pitfalls.
Usually, dealerships tell their salespeople to follow this general process:
- Test drive one or more cars.
- Negotiate a sales price with a salesperson.
- Arrange financing and close the deal.
After each step, try to speak with your friend in private to make sure they are comfortable with the way the deal is progressing. If they feel pressured or unsure they’re making the right choice, ask them if they want you to step in or see if they’d like to leave.
5. Do you know the most important word to say in the finance and insurance office?
That word is “no.” And you have to remind your friend to say it over and over in the finance office. The most common upsells are for extended warranties and theft protection products.
On the other hand, some dealers simply won’t sell a car that doesn’t have at least some of these extras included. If your friend doesn’t buy it, the next person will.
Don’t be afraid to ask for a moment to discuss these options. That maximum budget you talked over before coming to the dealer is your guardrail — but in the end, the decision is your friend’s, not yours.
If they decide to proceed, compare the finance paperwork to those discussed during the negotiating process. The numbers don’t have to match to the penny, but if there is a major discrepancy, look in the contract for added fees or other extra charges.
The article Is Buying a Car a 2-Person Job? originally appeared on NerdWallet.