Yesterday was our first day out on the car shopping adventure. Kyle and I were both pleasantly surprised with the experience so far.
Based on the initial research we did, we’ve decided there are 4 car makes that we find acceptable for our needs. So before we start price negotiations we’ll need to visit at least 4 dealerships. We went to Dealership #1 where we asked to test drive two cars. The salesperson was helpful and knowledgeable and addressed us both equally. That made me quite happy. We only ended up test driving one of the cars after realizing that when we sat in the second car it made us feel claustrophobic. It was kind of like when I drive a client by a house and they say they don’t want to go in because they don’t like how it looks from the outside or where it’s located.
Drawing other parallels with real estate, I realized that houses can be a lot easier to customize to your needs in some cases, while cars have some limitations. You’re limited to what’s on the lot or what the dealer can source from another dealer in their network. If I go into a house and the layout is acceptable but I don’t like the bathroom, I can remodel it. If I find a car I like but want it in a certain color but without the climate package, I’m somewhat restricted by the available inventory. I’m probably not going to change the color of the car or rip out the climate package. So I need to make compromises, much like I would in a house hunt.
While at Dealership #1 we had them look at our trade-in and give us a value. This is similar to when an agent gives a seller a market analysis on the value of their home or when a bank appraiser issues their report. The value they provided was just about what we expected, fairly close to the Kelley Blue Book amount. We also visited another Dealer where we would only consider having them purchase our car, not actually buy a car there. They gave us another (higher) value. With our existing car we’re going to need to decide if we just want to directly trade it in to the dealer or sell it on our own. Typically you’ll get more if you resell a car on your own because a dealer will take your car, resell it to a wholesaler who will then resell it to another dealer. You get less for your car because the dealer that ends up with your car needs to pay a middleman.
Selling your car on your own is somewhat similar to a For Sale By Owner listing. The owner of the house needs to price the home on their own, do their own marketing, meet with prospective buyers and negotiate an acceptable price. We’re not sure what we’ll do regarding our current car. Our negotiations on price for the new car we purchase may end up influencing that decision. We’ve sold cars on our own before, but we’ve also traded them in because it ends up being easier. Sometimes the cost differential that a dealer would pay is offset by the time and effort it would cost us to do everything on our own.
Three more dealerships and 6 more test drives to go before we decide on acceptable options and start price negotiations. In this respect the search is nothing like house hunting. With houses you never have much visibility to what will be available and when, so it’s more of a waiting game. You could look at 5 houses or 50 houses before you find the right one for you.
Now, back to work and showing more houses for the next few days.