No More Sticker Shock

Ten car-buying secrets that will save you thousands

We all know that the process of buying a car rates right up there with going to the dentist for most people. But, if you do your research and gird yourself for whatever tricks the salespeople pull, you can make it through all the shenanigans unscathed.

Jeff Ostroff, CEO and Founder of, says the most important thing, when you’re thinking about buying a car, is to do your homework. “We’d hear all the problems people had and we’d work around solutions and strategies to help them overcome all the issues they were facing at the dealer," Ostroff says, "and we developed spreadsheet tools which are really the core of the site.”

So, what are the the top 10 secrets Ostroff has up his sleeve when it comes to buying a new car?

1. Know how much the dealer paid for the car. You can find this information at sites like or which offer a package that lists the invoice price (dealer’s wholesale price ) and the MSRP (Manufacturer’s Suggested Retail Price), as well as the price of every single option installed on the car. Knowing what the dealer paid for the car helps to determine how much to offer the dealer.

2. Research any consumer rebates or factory to dealer rebates that are available. These can happen all year round and most consumers have no idea about them, but they typically happen around early fall when the new models come out. Again, sites like and have intel packages they sell that are updated every couple of weeks, by car model.

3. Know how much you should be paying for the car before you even step foot on the lot. Your homework should have been done already. If you’re thinking about a Honda Accord LX, for example, you should have completed your spreadsheet that tells you, OK, this is how much I should be paying for it, and you should have all your paperwork tucked nicely in a folder when you enter the dealership.

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4. Know your credit score. Dealers use this against buyers, big time. People with bad credit are often low on self-esteem, they’ve been denied everywhere they go and dealers frequently lie to them and tell them that the bank requires them to get an extended warranty to secure a loan. Many people are naïve and fall for it. Don’t forget to print your credit score out and put it in your trusty folder.

5. Have outside financing already in place. Many dealers can’t match the APR, so going to an outside financing company like Capital One is a better bet. Ostroff recommends any source that can get it done quickly and at a nice, low rate. Typically, these online lenders offer lower rates because there is no commissioned loan officer — it’s all automated.

6. Be aware of the tricks of the trade. It’s very important to know all the tricks that dealers and salespeople are going to try on you. They’re going to try to wear you down by bringing in multiple salespeople. They’re going to advertise slashed prices until you discover that the one car that had the low price is gone. Keep all of these things in mind the minute you walk into any dealership.

7. Don’t combine a trade-in with the purchase of your new car. Because there are so many shells already, this gives the dealer an opportunity to play even more games with you. Typically, a dealer will offer you thousands of dollars below market value for your car. If your car is five years old, most dealerships can’t get financing for it because it’s hard to find a lender who will finance a used car that may have a lot of problems.

8. 0% financing is a myth. The only people who qualify for this are people with first-rate, flawless credit. People who have never missed a single payment. Most people find out the hard way that they’re going to have a 15% APR because of late payments, but that big zero gets them in the door.

9. Don’t be a monthly payment buyer. Being a monthly payment buyer means you’re not focusing on the total price of the car — you’re only focusing on that monthly number and asking yourself if you can afford that. A lot of people are shocked to find that a dealer may have lowered the monthly payment but spread the loan out over more months, upping the price of the car. Ostroff recommends: Don’t ever do more than a four-year loan. If you can’t afford payment of a four-year loan, then you shouldn’t be buying a car.

10. Consider using an auto broker if you don’t feel up to the car-buying challenge. Auto brokers have been in the car business for years and typically know all the sales managers and get what is called "fleet pricing." They work with fleet managers or Internet managers directly and, usually, neither of them are on commission. It’s generally a quick, painless process, with the auto broker completing most of the paperwork, so no haggling is involved. Auto brokers usually charge a flat fee of $500 that’s built into the final price of the car. Some of them will even come and take your trade-in for you.