Ignite Video: Tips For Buying A New Car

Here is a 5-minute, 20-slide talk from a 2007 Ignite conference in which John Gruhl shares his tips on buying a new car from a dealer. It’s gotten over 250,000 views on YouTube, and includes a lot of the same tips you may have heard before but in a slightly difference package.

Here are the major bullet points to recap:

  1. Obtain financing separately (I would add, or pay cash!)
  2. Set aside two full weekends for buying a car.
  3. Get competitive bids from several dealers.
  4. Walk away if the deal changes.
  5. Don’t buy any extras.


  1. I came across this video last spring when my wife and I were looking at new cars. Of all the research I did online, this little thing was the most helpful and informative. It helped us get the best deal possible.

  2. Tip #1: Buy used

  3. I bought a new car recently and did almost the entire process by email and it worked great. Several dealerships have an “internet sales department” or something similar. There were 3 dealerships in the area for the brand of car I was buying. I emailed all 3 of them and said “I want to buy this car with these options in this color in the next 3 days, what is your best price?” I took the lowest price and emailed the other 2 and said, “If you can’t beat this price I am going to go there and buy it today”. I then got a lower price. I did the same thing again and the 2 dealerships said, “I can’t beat that price”. So I went and bought the car.

    This video is so true about being pressured to get the add-ons. When I told them I didn’t want any of them they said, “really, we’ve never had someone leave without at least buying some extra protection. What if your engine goes out?” Textbook high pressure sales tactics. They do try to make you feel like a jerk for not buying anything.

  4. Edmunds.com also has a great article by a journalist who went undercover as a car salesman. It’s a fascinating view into the world of car salesmanship.


  5. To Jonathan’s “pay cash” (which I agree with, if at all possible- after your first car, you should never finance a car) I would add: Don’t tell them you are paying cash. Don’t talk about financing at all until you have a solid deal. Even at that point, I usually listen to their financing offer, then politely tell them I have made other arrangements.

  6. I just recently purchased a new car (never thought I’d do that again, but hey, life changes). There are a half-dozen dealerships in my area. I used email to have them bid against each other.

    I only accepted hard offers (if they stated they’d beat anyone by XX dollars, I said I need a firm offer and that without one they would not get my business. At first they were all within a $100 or so of each other. Then they started trying to throw in the mostly worthless stuff such as paint sealent, scotchguard, etc claiming it was worth hundreds. I said I didn’t plan to purchase that stuff and that its value to me was minimal.

    As the close of bidding got near (I gave them 5 days), real offers started coming in and I got the car I wanted under TMV pricing from edmunds. When it came time to pick up the car, it was simply a matter of showing up, doing the paperwork and driving off.

    I financed though I could easily pay cash. Hard to beat 0.9% financing and given I’m making about 1% on the money in my account, financing is about a wash.

    Stress free and easy. The internet changes everything — internet sales departments didn’t exist last time I bought a car….

  7. Gotta agree- buy used.

    Cars are lasting longer than ever before. An off-lease car at 2-3 years old will be 40-50% off MSRP, even with CPO coverage.

    If you must buy new – use the internet only. Don’t ever set foot on a lot. in fact make them deliver the car to you. Yes, you can do it. i’ve done it before (in addition to getting a car in europe – which was a giant splurge and quite fun).

    Edmunds TMV is a sucker’s bet. It’s totally worthless. Find out about incentives and if there’s anything on the vehicle then the car, no matter what it is, should be invoice minus incentives. If you fall for Edmunds TMV then you fall into the trap of trying to get the average sale price. Nonsense. let the the next sucker pay that price. You want the dealer to bleed.

  8. John Gruhl is spot on. The key is to “pre-negotiate” everything before getting to the dealership. And when you pre-negotiate, make it a competitive process. Car price, financing, insurance….there’s multiple sellers for everything.

  9. I have to agree that the internet sales team is the way to go. You never have to deal with the “car salesman” and you can get several quotes in a short amount of time!

  10. “Don’t buy any extras” – well, that’s a tough one. I, myself would be very much tempt to put in some bells and whistles to “personalize” my new car!

  11. Hi. Great video! Thanks for sharing. I wanted to point out that Mr. Gruhl’s first name is Rob, not John.

  12. I’d change #1 “buy used” to: #1 Don’t buy a car from a dealership.

    That said, last I bought a car in 2005 we took the dealership financing (they knocked off $500, or about 5% of the cost, for us doing so) and then we turned around and paid it off immediately. Honestly, the fine print said they would charge us a bit more for that, but in the end they didn’t charge us anything but a few days of interest. (Either way, was worth the $500 saved). Since we have always paid cash for our cars, I told our insurer we intended to pay it off immediately, and they never asked for proof of that or asked for the lender info. It was easy peasy.

    I wouldn’t say whether I was paying cash or financing (we pay cash for vehicles), but if they’d give me a discount to do one over the other, I would take it, after that experience. I would read the fine print very carefully, that said.

    I would presume that cash would get you more in the current economy.

  13. P.S. I am sure it is possible to keep mum about your method of purchase, but seems like it would be really hard to do.

    Every time I have been to the dealership the conversation immediately goes into getting you to finance as much as possible.

    Me: I want to look at something in the $10k range.

    Salesman: I have the perfect car for you. This one over there ($20k price tag) is only $200 per month.

    Me: Sorry, but I don’t want to spend more than $10k.

    Salesman: But it’s only $200/month!

    & so you go round and round. I think it’s pretty obvious that anyone with a tight budget is intending to pay cash. & that is apparently a rare thing, because it really tends to fluster and piss of car salesmen. I would hope in this day and age they would be a little more hungry for cash, but it’s been a while since I went car shopping.

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