As a follow-up to yestereday’s discussion, if I had decided to get a new car — which isn’t the case — I would have had to face the daunting Car-Buying Process: the haggling, the scheming, the underbody protection. This can be intimidating. The game feels rigged against the buyer. Lifehacker recently unearthed a five-minute video that explains how to buy a new car without being screwed.

For those of you without video capability, here’s a brief summary:

  • Obtain financing from your bank or credit union in advance.
  • Allocate two full weekends to purchasing your vehicle.
  • Phone 8-10 dealers for competitive bids on the FINAL price.
  • Walk out if the deal changes.
  • Don’t buy any extras.
  • Sell your used car separately.

We’ve discussed a variety of car buying methods before [1, 2, 3, 4], but this is the only one that I’ve used first-hand. It works. In 1995, Kris and I used this technique to purchase a new Honda Civic (but we faxed dealerships instead of phoning them). We sent out a letter that looked something like this:

My name is John Roth. I would like to purchase a white Honda Civic with option A, option B, and option C. What is the best price you can offer me on an in-stock Civic that matches this description? I am faxing this letter to every Honda dealer in the Portland/Salem area. This weekend I will purchase the vehicle from the firm that offers the best deal.

Some dealerships refused to participate, but a few responded with competitive pricing. The one we chose offered a smooth, hassle-free transaction. It was awesome!