How to buy a car with no hassles

In the past year, I've had 2 fantastic no-hassle car buying experiences in a row at different dealers and felt I should share my technique.

1.  Do your homework.  Research the invoice price of the car you're looking for at sites like kbb.com  and edmunds.com.  Pay special attention to the dealer incentive and holdback numbers.

2.  Look up as many dealers in your area (and don't be afraid of driving up to an hour to get a good deal) and contact them by e-mail.  Quite often, dealerships authorize their Internet sales "departments" (i.e. one guy who knows a thing or two about e-mail) to give special prices that "aren't available through the general sales staff."  Lies, lies, and more lies!  Anyone can make any sort of deal you want - you just have to show them you're well informed.  People who contact the Internet sales staff tend to be the types of people who do their homework (like you, or you wouldn't be reading this), so the dealers have less leverage to work with when negotiating your price.

3.  Send each dealer a piece of e-mail similar to this:

I am looking for a new 2007 Honda Odyssey minivan in Ocean Mist w/ gray leather interior and RES and would like a quote from your dealership.  [be as specific as you can here about the car you want]  I have done considerable research and know invoice price, holdback, dealer cost and the average purchase price. I'm contacting a number of dealers around the area and expect very attractive offers, as well as a pleasant buying experience. While I know there are no incentives at this time, I'm ready to buy now from the dealer with the most competitive offer.  Please respond with your best final price by e-mail.  No calls please.  I expect to make my decision within 1-2 weeks.

4.  Wait for the replies.  I've found that if I contact 10 dealers, I might get back 2-4 quotes.  That's plenty for the next step, though.   

5.  Pick the top 2 dealers you're interested in working with.  You'll probably base your decision on price, but don't forget to do a little asking around to see if any of your friends or neighbors have anything to say about their experiences with the dealership.  Pit them against each other.  Take the dealer with the lowest quote and mail them back asking if that's their best possible price.  Reply to the next highest price dealer and tell them you have another lower quote (but don't give them the dollar amount) and see if they indicate whether or not they can beat it.  If they're just going to match the price - go with whichever dealer has a better reputation or is more convenient for you to travel to.

6.  Once you've settled on the price and have found a dealer that has your car in stock, ask if they'll take a deposit to purchase the car.  In one case, a dealer let me do this over the phone. In another, they required me to come submit a financing application to make sure I wasn't wasting their time.  Whatever... do what you're comfortable with here.  Most dealers will let you get away with $500 on your credit card as a downpayment.  

7.  Set up an appointment to test drive the vehicle (don't buy it without test driving the exact car you're purchasing!!).   

Using this technique, I've purchased 2 cars with as little as 30 minutes total time at the dealership.  I'm about to purchase another one, and I'm up through step 6 so far with only 15 minutes on the lot.  The rest of the negotiation process happened from the comfort of my couch while sipping a cold beverage and watching back episodes of CSI:Everywhere.

As an extra tip, I've learned that adding on accessories often makes the dealership a little more willing to bargain.  The reason is that they get higher mark-up per dollar for accessories than for the cars.  If you talk them down to a very thin margin on the car, you can show some good faith by letting them install a set of floor mats or a sunroof visor. 

Note - Buying an extended warranty usually happens after you negotiate a sales price, so don't think that it's going to affect the sales price either way.  The finance manager gets credit for those sales, and the sales manager gets credit for the car sales. 

Good luck!  If this recipe works out for you or if you have other tips, leave me a comment to let me know!