Live data from Hacker News

New car buying guide: the algorithm (2021)

github.com

31–40 of 162 posts

Re: New car buying guide: the algorithm (2021)

#31

> You do not want to use financing products that dealerships offer - they are worse than the ones you can shop around for. Get preapproved with your bank or and other bank and get the preapproval letter ready before step 5. That seems unlikely to me, though this depends on which car company you're buying from. Take Ford for instance. A significant amount of Ford's business is banking/financing. Much like how the Deal…

Yup. Car companies (well, sometimes their importers) subsidize financing for dealers through financing subsidiaries.

The caveat is that you usually have to have very good credit to get the top tier rates, which might be why the github user wasn't aware of this.

If the loan is below inflation, the loan is actually making you money...as long as inflation stays higher than the loan rate for the length of the loan, that is.

Re: New car buying guide: the algorithm (2021)

#32
Bought my first new vehicle in fifteen years. Here are the steps that I took.

1. Test drove four different brands

2. Went to six banks and found out the lowest interest rate I could get. Everyone told me that it would be at a credit union but instead it was a brand new bank that apparently was hungry to get new business

3. Emailed every dealer for the brand I chose within 225 miles.

4. You want to do one thing at a time. I wanted the price out the door. I avoided talk about trade-ins or financing. But I did state I was open to financing the vehicle with them if they were competitive.

5. Be very patient. The vast majority of the dealerships in the first round either never answered the email or quoted me over MSRP. I would engage with everyone who wrote me back. I would reiterate that I was ready to buy a new vehicle to whomever gave me the best deal. As time went on I responded with specific price I was willing to pay. There are forums for most brands where people share the prices that they were paying. So I had a pretty good idea what might get accepted.

6. I was getting ready to start shopping for my second choice. It came down to a single salesman who sent me dozens of emails. All the sales guys want you in the dealership where you're on their turf. This guy kept dropping the price $500 at a time. He asked me what it would take for me to visit the dealership. I quoted him $1000 below his last offer - and he accepted! I made it clear that wasn't a price I would accept, just enough for me to visit him. I wanted $1000 more I when visited the dealership.

7. I got a bunch of prices for my old vehicle online so I had an idea what it would bring. They quoted me on the high end of what I would receive but they wouldn't budge on the new vehicle price. Eventually they agreed to add $500 to the price of the trade-in which I wearily accepted. Only to have them give me $400 of free mats so its obvious that I probably could have gotten them lower. However they had factory financing that was 1.25% lower than the best bank rate I received so I financed the vehicle with them.

Going online is the only way to purchase a vehicle. December I learned later is a really good time to purchase.

Re: New car buying guide: the algorithm (2021)

#33

Last time I bought a car, I just messaged my credit union's Auto Buying service with the make/model I wanted. They told me the best price they could find and the dealer drove the car to my workplace once I set up the financing. If your bank offer this service, you still have to figure out which car you want and what the fair price for it is. But those are minor roadbumps compared to haggling at the dealership. There…

Was it navy federal by any chance? I would one day give it a try based on your positive experience if so!

First Tech Federal (WA, OR and CA). The service itself was autoland, which seems to still be around. Not sure if there are advantages to going through your own bank vs directly to them.

Re: New car buying guide: the algorithm (2021)

#34
post #6

Car dealership in US are in their own league. Coming from Europe it is difficult to appreciate at first. But when you see headlines like: "Roma was purchased last month by Texas car dealership magnate Dan Friedkin, who is worth $4.1 billion." Yes, that a Texan car dealership buying the AS Roma (soccer team, Italian capital). When I came in US, I had no car, I saved money, went to dealership (Toyota) and pointed a use…

> Unfortunately I had to leave the car, so they do a final inspection and prepare some papers. I came a week later to pick up the car. I wonder how he would have felt if you had to take the car and keep the money for a week before you could pay.

The thing tho, is that the car dealership aint going anywhere, while the customer (if a fraudster) could just up and disappear with the car with the dealership having no way to track it back down.

Re: New car buying guide: the algorithm (2021)

#35
New cars are built out of plastic and are thus limited to a 10yr life span, fullstop. Every one of them. Then you add electric to the mix, and in 5-10yrs ur gonna need to buy a new one, no matter the brand, because your battery will fail. The lucky ones get a second under warrenty.

I dont know, i stopped buying new cars once computers were added. I own a 95` landcruiser with 300k on the clock and i beleive it has another 300 which will basically mean it will do me for life. And the advantage of buying and old car, and learning todo the maintence yourself, is that not only do you save money from every angle, your car is on the other side of the bell curve where they start to increase in value again. In the 10yrs ive owned it, my car has increased in value by ~40%. Its made of metal, and is held together with bolts not glue. It will not dry rot away, and rust is easily controlled with modern epoxy paints. It will not go out of fashion given the thirst car collectors of the future will have the past.

My plan is to swap a hydrogen motor in i guess once mature the tech and consequently ban diesel.

This is from someone who in 2005 bought his first ~50k$ car over the internet, one click style, without seeing it in person from a used car guy (it was 2nd hand, 10k on the clock, ~10% of retailm had 2yrs warrenty). Thats really the problem with buying a one-click these days though, the people who buy them are too risk adverse to be without a warrenty or buy second hand. So they crash the value of their own investments because the others know what to expect with seconds on a modern car. The reason people sell cars after 1 or 2 years is many, in my country, leasing cars like this is maximises your dollar vs tax.

Any moden car: ~50k outlay, 10yr useful life

vs

i bought a 2002 rav4 with 400k for ~2k, 5~ yrs ago. Ive spent roughly ~500$ repairing different things on it in that time putting on ~40k because they reused the same parts for this car across many different years and models which means CHEAP CHEAP. It means parts have been copied and mass reproduced on a scale that sees me paying $30 for a waterpump and ~1hr to install DIY on the side of the road not $600 ~ $2k labour for a moden car that requires half the car to be dissaembled to even just see the water pump. And since your modern pump is made of plastic, and all the pipes are plastic, and the pipes are have special numbers of propritiy fittings.... well yes, you see why modern cars suck in terms of investment ratio.

let me show you that math. ~2.5k outlay / 5yrs = ~500$ per year total cost. The car is now worth ~10-12k because people are so sick of modern cars and toyotas keep their value.

2nd hand, high milage, reliable cars (toyota/honda) > anything modern made in the last ~15yrs. The morphing from 1 or 2 modules per car, to 20-100 modules per car with tonnes more emmisions gear IMO is the worse thing to happen to cars since their inception. BUT it has given me a retirement plan ... im thinking about becoming a ECU/electronics repairer once i get sick of tech :D All those modules are pretty much the same, they just allow you todo things via comment instead of lever. Once you learn the basics, its like hacking on VB or JS.

Re: New car buying guide: the algorithm (2021)

#36

> You do not want to use financing products that dealerships offer - they are worse than the ones you can shop around for. Get preapproved with your bank or and other bank and get the preapproval letter ready before step 5. That seems unlikely to me, though this depends on which car company you're buying from. Take Ford for instance. A significant amount of Ford's business is banking/financing. Much like how the Deal…

Yup. Car companies (well, sometimes their importers) subsidize financing for dealers through financing subsidiaries. The caveat is that you usually have to have very good credit to get the top tier rates, which might be why the github user wasn't aware of this. If the loan is below inflation, the loan is actually making you money...as long as inflation stays higher than the loan rate for the length of the loan, that…

> If the loan is below inflation, the loan is actually making you money...

Inflation is at most indirectly relevant here. What's important is the opportunity cost, ie what else you could do with your money.

Of course, you'd hope that there are other investments that can at least beat out inflation. But there might be much, much better investments available. (Or on the contrary, sometimes eg government bonds yield less than inflation. Yet, some people still buy them. Though much of that demand probably comes regulation all but forcing certain parties to invest in government bonds.)

Re: New car buying guide: the algorithm (2021)

#37
post #35

New cars are built out of plastic and are thus limited to a 10yr life span, fullstop. Every one of them. Then you add electric to the mix, and in 5-10yrs ur gonna need to buy a new one, no matter the brand, because your battery will fail. The lucky ones get a second under warrenty. I dont know, i stopped buying new cars once computers were added. I own a 95` landcruiser with 300k on the clock and i beleive it has ano…

> My plan is to swap a hydrogen motor in i guess once they get of diesel.

Why?

Re: New car buying guide: the algorithm (2021)

#38

Earlier quoted context omitted.

You grossly increase the chance of a lemon with your strategy. Why would anyone sell a near-new car for 30%+ off *unless* they knew the vehicle is crap? -------- Buying lightly used (~3 year or ~5 year) cars is likely the superior strategy. There's a set of rich buyers who want to keep up with the latest trends. This leads them to leasing vehicles for 2, 3, or so years. Other times, they have enough income that they…

To me this seems to reflect a lifestyle where certain people always want a shiny BMW or Mercedes and have to trade up every 2-3 years to maintain it. Seems like leasing would be a better approach though.

I love leasing! Well, not to lease myself, but the cars returned from a 2-4 year leasing contract are usually great value to buy used directly from a brand dealership, come with guarantees from the manufacturer comparable to new cars and are usually, at least, acceptable milage-wise.

I talk about Germany specifically so.

Once, I bought a car new. Will never do it again, used (somehwere between one and four years) is the way to go.

Re: New car buying guide: the algorithm (2021)

#39

I test drove a few cars and I bought the car I preferred on the dot com of the car manufacturer. I knew the displayed price was the real price. Because I ordered it online, I could even return it up to two weeks after the delivery as the local law mandates.

Unfortunately, in the US most of those sales are still funneled through a dealership, and even a "direct" purchase is still usually subject to dealer markups and similar nonsense.

Yes, it's also the case in Norway. You don't have to buy a car from one of them.
Post reply on HN