It's been five years since I purchased a new car, so when I started looking for a good used car for my wife last month, I was as interested to see what had changed in car buying as I was in the cars.
After scouring the web sites of Delmarva car dealers for nearly a month only to be frustrated, we ended up in Baltimore last week to buy a 2012 Kia Soul+ with just 7,852 miles for less than $15,000.
And it was all possible because of the Internet.
Easy to Compare Dealers
The Internet makes it easy to compare the offerings of car dealers, not just here but the entire Mid-Atlantic region. By the time we finished, we had seen every car in Delaware, Maryland and southeastern Pennsylvania.
We found a Mazda 5, our preferred vehicle, at Sheehy in Waldorf, Md., but we couldn't get our financing in place before the car sold. Back to the drawing board.
After regrouping, my wife saw a Mazda 5 in the wild and decided that up close, it wasn't as big as it looked online. We expanded our car choices, though we still couldn't find a late-model, low-mileage car on Delmarva.
We finally found the Kia Soul at Koons Kia in Owings Mills, Md. The next morning, after deciding it was worth the two trips to complete the purchase to save $2,000, and confirming that our loan was ready, we headed to Owings Mills. That afternoon, we drove the Soul home.
Easy to target the car you want
It's much easier to target the exact car you want now than before.
Most car dealerships are parts of conglomerates, such as Koons, Sheehy, Pohanka, Winner, Hertrich, etc. Rather than sift through cars on their individual sites, we searched the corporate sites for used SUVs, less than 5 years old, below 50,000 miles, and preferably less than $15,000. This limited our options, but also sifted out cars we had no interest in.
During these searches, we found that the Mazda 5 is a rarity. We saw less than 10 Mazda 5s across the entire region. Only three met our criteria, and one of them had been in an accident (virtually every dealer posted the
CarFax report on its site).
Focusing our search on Kia Souls that met our criteria, we found the car for us. We marveled at how in a month we went from a 2008 Saturn Outlook with 101,000 miles to the 2012 Kia Soul with 7,852 miles.
Easy Way to See Car Reviews
Car reviews by "experts" are abundant on the Internet. The experts, though, don't review cars the way the rest of us use them on a daily basis.
I focused on
Edmunds.com and
cars.com because of the reviews from actual owners of the car. It's like having dozens of friends tell you what they think about their car. Try getting that kind of information from walking up to people in parking lots.
There are some useless reviews to be sure, but you can determine pretty quickly which ones are legitimately helpful.
Getting the Best Price
It used to be a given that you would haggle over price. While some haggling still goes on, both parties know that pricing information is readily available on the Internet.
See a price on a car? Check the
Kelly Blue Book site or
nada.com for the latest retail prices. Then you'll know if the price is right or not. Our Kia Soul was priced $2,300 under NADA's Clean Retail value. So I didn't haggle much other than to ask that some minor scratches be repaired.
If you're borrowing, this will also help you determine if your loan will be underwater from the start in case you want to refinance later.
Finding Lending Online
Since it had been five years since I applied for credit, I immediately checked my credit reports for negative and/or incorrect items.
Sure enough, they needed some cleaning. The most common negative items on credit reports are medical bills that the consumer thought had been paid by insurance. This is serious, because 40% of consumers with medical bills on their credit report say those dings lowered their score.
Considering that a difference of 25 to 50 points caused by an incorrect entry on your report can cost thousands of dollars over the loan's lifetime due to higher interest rates, it definitely pays to check your reports from
Equifax,
Experian and
TransUnion before applying for loans.
I got a lot of help on this from
Myfico.com, which is the consumer web site of the FICO scoring company that produces the credit score that the overwhelming majority of lenders use to determine not only your creditworthiness, but the interest rate you will pay.
Myfico.com also has numerous tips for improving your credit score and scams to watch out for. Another helpful site for avoiding predatory lending and sales tactics is
Real Car Tips. Check out its
Ultimate List of Car Buying Scams before you head to the dealer.
Securing a Loan Online
Based on the information on myfico.com, I decided to try the
Digital Federal Credit Union (DCU) in Massachusetts. I was able to get the loan terms I wanted in a 20-minute application process over the phone.
One glitch, however. As I finalized the loan with DCU, the terms changed slightly. When I objected, I learned that the person who took my application recited the loan approval terms incorrectly. The correction cost me about $5 a month on the payment.
Had I insisted on getting the loan approval in writing, I wouldn't have had that issue at the very end. Lesson learned. Still, DCU gave me better terms than anyone else, so don't hesitate to try a credit union.
After finalizing the loan with the lender, I received the loan documents on my SmartPhone. I could have electronically signed the documents and closed right there, but with all that small print on my phone, I wanted my tired 54-year-old eyes to have a fresh look on a computer screen. I read over the documents the next morning, electronically signed them, and got an email that a check to the dealer was on its way to me by FedEx.
The check arrived via FedEx today, and we will deliver it Wednesday when we get the scratches removed.
Overall, the online buying experience was more pleasant than I remember of offline buying, particularly the endless hours sitting in the salesperson's office while the sales manager, general manager and salesperson "fretted" over the sales price and financing while they tried to wear you down.
And you simply can't beat the efficiency of searching for the vehicle you want online vs. dealership hopping in the real world.
