The Best Car Deals for Your Money

The best car deals don’t come easily, they take some planning and work, but they can save you thousands of dollars off of new car prices.  A friend recently shared one of the best car deals I’ve ever run across and I asked if he could explain the process so that you could use it to save money when you buy a new car.

There are actually two components to the strategy you can use when buying a new car, auto incentives and dealer bidding.  He only used the dealer bidding approach because car values for the Honda CR-V were high enough the dealers didn’t have to offer incentives. Here is his explanation of how you can get some of the best car deals when shopping for a new car. (Note: The auto market has changed a lot since he bought his car about a year ago so the incentives strategy may no longer be effective.)

Best Car Deals – Auto Incentives

The basic premise is that dealerships often get rebates that are not advertised to the public. The way it normally works is that a dealership will get $1000 per car sold in a given month if they hit a certain sales number…say 100 cars. These incentives are not made known to the public but published in an industry newsletter called Car Buys. Knowing this as the consumer is a major advantage.

The buying process should always occur near the end of the month. As the consumer you don’t the exact number of cars that dealership has sold that month but you can tell them you know about the incentive. They will be much more willing to take a loss on your sale if that gets them closer to 100 car quota which will get them $100,000.

Best Car Deals – Dealer Bidding

In my case Honda was not offering any incentive for the CR-V because they had no problem selling them. However the other half of the process, which is key to getting the best deal, worked really well for me.

The idea is to call prospective dealers (talk only with their sales manager or Internet manager which may take a couple of phone calls) and tell them you will be buying a car in the next few days. Tell them that you do not like to haggle over price so you plan on sending them an email detailing the make, model, trim and color of car you are interested in and that you understand you’ll be dealing with their current inventory.

Explain that they will then email you back their most competitive offer. Make sure to mention that other dealerships are also involved so the most competitive offer should be submitted otherwise they run the risk of not making the sale.

Once all the offers are received (give a deadline) you will call the each dealer, starting from the highest bid, and give them one chance to beat the lowest bid. If they want to participate great. If not, no biggie they just miss out on the chance of making an easy sale.

Dealer Bidding Process

I used a list of dealers within about 150 miles of me. Most had no problem participating and only one wanted me to call him after I had all the bids so he could beat the lowest price…I just told him no thanks.

Once I received all the emails I started making calls. There was a pretty significant difference between the highest and lowest bidder but I wasn’t really pleased with the bids. The best bid was just around invoice. I fully expected the first dealer to just pass on beating the price since there was a big difference in the bids. To my surprise the highest bidder took about two seconds to match the lowest bid.

I eventually talked him into actually beating the bid. I then called the next highest bidder with my new low bid. I even took $500 dollars off that price because the dealerships didn’t want to go too low below the original lowest bid. The next dealership beat that price as well. Each time I took another $500 dollars off the new low bid which really drove down the price.

Getting the Best Deal on a Car

Eventually, I got to the last call, the original lowest bid. Once I told him the new lowest bid he said that it was a “loser deal and the dealership would not make any money on it.” I was more than satisfied with the price so I really didn’t care if he could beat it or not. He said that it was highly unlikely but he would call be back.

When he called back he beat the price by $200…I couldn’t believe how far the price had fallen from the original emails. I asked for an email to confirm the price and wanted to make sure that there would be nothing extra added to the cost when I would go in to purchase. He assured me that would be the final price (tax, destination, etc., all included).

When I arrived they had a salesman waiting for me to start the paper. I asked if we could see the car first (he was surprised by that not really knowing how we came to the price). Checked it out, loved it and spent about a total of 30 minutes in the dealership going over paper work. Easiest way to buy a car while getting the best price.

That’s the end of my buddies description of the process he used when shopping for a new car, hopefully you’ll find it useful the next time you’re in the market for a new car. I asked him some follow up questions after he emailed me the explanation, I’ll share the questions and his answers tomorrow.

Merry Christmas 2009!

When I look back on all the Christmas’s in my life this one will probably be the best!

Christmas time in years past was always a stressful time for me because it was the busiest time of year for my job.  Mixing in the stress of work with trying to coordinate the holidays with our families many times left me, unfortunately, dreading the holiday season.

Finally, a Merry Christmas!

So what’s different about this year? Thankfully we’re finally in sync with my family and my wife’s family schedules so planning Thanksgiving and Christmas visits is much easier.  Plus the company I work for now doesn’t have crunch time in December and January so I actually get to take some vacation days without causing 80 hour work weeks preceding and following the Christmas break.

Kids & Christmas

Probably best of all is that our son has reached the special age when Christmas is a magical time and is excitedly soaking it all in with his big innocent eyes.  His enthusiasm and anticipation are delightful and infectious, making us very happy parents! I hope your holidays are as enjoyable as ours this year and you’re able to spend time with the people you love.

I know you’re probably busy with family and celebrations this weekend but if you have a spare minute or two here are some good personal finance articles:

Holidays

• Great Homemade Holiday Gifts @ Suns Financial Diary
• The Best Cookies Ever! @ Being Frugal

Investing & Retirement

• Rules To Build A Basic Stock Portfolio @ The Digerati Life
• Robert Kiyosaki is Off his Rocker (Again) Is The 401(k) Really the Biggest Scam Ever? @ Generation X Finance
• Using a Solo 401(k) to Facilitate Roth IRA Conversions @ Five Cent Nickel
• Traditional IRA or Roth IRA for Young Investors? @ Cash Money Life

Debt

• Debt Crisis in America & JCR Advertising are Evil @ Lazy Man & Money
• Life After Debt: Is It Easier On The Other Side? @ Frugal Dad

Health

• Your Flexible Spending Account: 10 Qualifying Purchases @ Consumerism Commentary
• My Up Close Look at Health Care @ Brip Blap
• Getting the Most Out of Your Health Insurance Before 2010 @ Moolanomy

Frugality

• Is Frugality a Necessary Evil? @ Get Rich Slowly
• Breaking Down the Numbers on Why Frugality Works @ The Simple Dollar

Financial Education

• Do Young Entrepreneurs Need To Go To College? @ Erica Biz
• Your Take: Default on Underwater Mortgages? @ Bargaineering
• 6 Mistakes of New Earners and How to Fix Them @ My Dollar Plan
• Financial Pet Peeves @ Million Dollar Journey
• How to Get Consumer Reports Online Access for Free @ Free Money Finance
• 7 Things that Make Good Financial Cents for Managing Your Finances @ Good Financial Cents
• What’s your biggest financial fear? @ Budgets Are Sexy

PocketSmith User Review

PocketSmith user Hugo Vitorino was actually the first person I contacted for a PocketSmith review but due to life events he wasn’t able to offer his feedback on the new online personal finance software and you heard from the New Zealander Sam Law.

Hugo was also a member of the original beta test group and his home country of Portugal gives a taste of how international the user base is. Hugo finally got a chance to send me some answers to my questions, here they are:

1) Tell us more about the beta test group and the role it’s played in adding functionality to PocketSmith.

All ideas that I had and saw that could make PocketSmith a better financial site, I would take it to discussion so everyone could see if the idea was doable and what could be done to improve it and/or make it possible to achieve. I’ve always felt that everyone had an active voice, so being part on the Beta test group was a great feeling, because I had the chance to see some ideas gaining live on a active and live site as PocketSmith

2) What features of PocketSmith do you tell your friends & family about?

The biggest feature on PocketSmith that I tell to my friends & family (and everyone else too) is the ability to forecast the accounts on a daily basis for a full year, allowing me to really see how my savings will be on such a long date. Another feature that’s quite neat is the ability to synchronize PocketSmith with my Google Calendar and Outlook, meaning I can always see what income/outcome just like an appointment, making it really easy.

3) What feature could use some improving or enhancing?
I think PocketSmith should do three things to increase is popularity with the masses.

• Translation: Everyone would rather having a website on their natural language, and I truly believe that is something the PocketSmith team should go for ASAP if they intend to get to more people and get more subscribers;
• Up-to-date transactions: Despite not being a big fan of this feature, I do believe it’s a great idea and the general audience likes it. 
• Products Recommendation: This one is a bit harder but should be a really nice feature to get.

4) Pocketsmith has three different plans: Free, Premium, & Super. Which one do you use? Have you been in the same plan the whole time?
Well, I started with Free because back then there was only that one 🙂 At the moment I have a Super account and I don’t plan on dropping it, since I consider it worth all the cents it costs.

5) Have you tried some of the other tools, like Mint.com and Wesabe.com?   How do they compare to PocketSmith?

Yes, I’ve tried other tools like those you mention, but none of them felt as comfortable to me as PocketSmith did just because of the forecast system (which was mind blowing to me).

I do believe each one of them has their qualities and people should use the one that adapts to their needs, but never the less people should try out PocketSmith forecast for some time and then decide. Unfortunately I wasn’t able to use all the features given by some since I’m from Portugal, but like I said, nothing like trying and deciding.

6) Have you used any of the mobile functionality like the mobile app, twitter updates, and text messaging?
Yes, I’ve tried the mobile app but not the twitter updates (I’m probably one of the 10 people that don’t use twitter). All of them are great add-ons since until Up-to-date accounts isn’t implemented, people can update their accounts on the fly and do like me and not update because it gives too much trouble 🙂

7) Any final words for people that are considering giving PocketSmith a try?
Well, like I’ve been saying, there are other tools that have the same financial purpose, but I still haven’t seen anything like the ability to forecast your accounts. Try it for some time and I bet you’ll fall in love with it.

Thanks to Hugo Vitorino for his review of the PocketSmith personal finance software! If you’d like to check out the free version click here.

Starting an Investment Club

Starting an investment club is an option if you rule out joining an investment club based on clubs whose investment strategies or investing goals are incompatible with your own.  Of course starting an investment club is no small task, there are a whole checklist of things necessary to start one up.

Here are some of the things you’ll have to figure out or do if you can’t find a club you like and want to start your own.

Meeting times. All members should agree on (1) the days and time that you’re going to meet (most investment clubs meet once each month), (2) the place that you’re going to meet, (3) the length of the meetings (most meetings last about two to three hours), (4) the organizational format that each meeting is going to take.

Number of members. Agree on the size of the investment club. Studies show that a good size for an investment club is approximately 12 to 15 members. When you limit the size of the club to this many members you’re still small enough to hold meetings in member’s homes.

Investing education program. There is a lot of good information available for members of the National Association of Investors Corp, NAIC, on investing education.  The education program is typically headed up by some combination of the vice and education officer.

Meeting place. You might want to come up with alternative meeting places, such as local library or café, to use as an alternative meeting choice.

Investment club software. If your investment club is going to use software to keep track of stocks, profits, expenses, and other administrative information the secretary can purchase this software and have it installed. Remember to keep in mind that if more than one member of your club is going to use the software program on their computer that you’ll have to purchase multiple copies of the software or buy multiple licenses for more than one user.

Investment club name. You’ll want to come up with a name for your investment club. You don’t need to make this decision on your first meeting but members should come to the second meeting ready with several ideas to share for a club name.

Registering your investment club. Once you have a name you can register your club’s business entity with the state. When the paperwork returns, the Secretary of your investment club should make sure that the paperwork is filed and that members of the club have access to the information.

Investment club accounting. The newly elected treasurer should head up selecting and setting up the accounting system.  You’ll want to have this set up at least by your second meeting.  One of the most popular club accounting systems is probably Bivio, some clubs prefer Club Accounting Online.

Tax ID Number. This is the time to file the information that is required to obtain a Tax ID Number. The Treasurer will now be able to open up a banking checking account for your club as well open a brokerage account. If your investment club hasn’t decided on what brokerage to use this task will have to be delayed until a later date.

Research Items:

• partnership agreement forms
• preparing a mission statement
• banking information
• legal forms, such as tax information
• broker information
• member management software

This post on starting an investment club is part of an investment club series that also covers joining an investment club , investment club mentors , and other investment club tips .