How to buy a new car

The Internet is your best friend when it comes to new car shopping

I bought two brand new cars in the last three years paying lower than the asking price and working deals without leaving my home office. Here's a step by step guide to how I did it and how with some research and thoughtfulness, you could get the best deal without countless hours haggling in the car sales office.

1. Decide on the type of car you want to buy. You can do your research on Kelly Blue Book,, or read car magazines, consumer reports, and by talking to friends about cars. Once you've selected the car you want, decide on the absolute specifications you would like the car to have. The details such as color, model, features, etc. are all information you will need to give the internet sales associate.

2. Go to consumer reports to enter all the details of the car you want. In the report, you'll get exclusive access to what the car cost the dealer to get, the "hold back" which is money dealers get from the manufacturers for selling a car, and the bottom line price you should be paying for the car you want with all the specs you lined up. You will have to purchase a subscription to consumer reports to get the information, but that's about $30 which is more than you'll save without the report. You can go to Kelly Blue Book to get a suggested retail value price for free, but they don't provide information on what the dealer pays for the car.

3. Print out the detailed report and keep it in your records. Now that you have an idea of what the car of your choice should cost, decide how much you are willing to pay above the dealer's cost of the car. You'll be lucky to pay just 3% above the dealer cost.

4. Locate all the dealerships in your area. I searched a 60 mile radius. I then wrote to each of the internet sales associates from each dealership. My letter included the exact car details I wanted and the price I was willing to pay for it. You can copy and paste the letter to each dealership.

5. Within two days I had 3 offers for each of the cars I bought. Of course there are dealerships that will say, "no, we can't offer that price to you." But there will be dealerships that will say yes. If not, you may need to raise your price a little and see if there is a dealership willing to meet your new price. At least you're not driving from dealership to dealership to negotiate the price (which takes at least 2-5 hours each!). You can even ask the dealer for a lower price by saying you have an offer for less, but it's further away than you'd like to travel and see if any are willing to go even lower.

6. Once you have a written deal with a dealership that is willing to meet your price with the car of your choice, print out all conversations and the final price, including the taxes and fees (out the door price). This will save you more haggling once you get to the car dealership. Yes, they will continue to squeeze you at the dealership even if you come with the documented conversations you already had.

7. If you plan to finance the car, find out your credit score rating and get the local bank's auto finance interest rate for your credit score. This will help you decide if you want to finance the car with your local bank or with the car company. It will also give you leverage. Once I presented my bank's offer, the car dealership gave me a lower interest rate. It helps to put some money down, but not always so find out if that makes a difference to your interest rate. Your car may already have special financing. Just beware that the dealership will try to slip in extra costs (extended warranty, etc.) and you won't know it because they'll simply calculate it into the monthly financing. It would be smart to figure out on your own before you visit the dealership how much the monthly payments should be based on the final price you accept at the interest rate you are qualified for. The sales manager slipped an extra $30 dollars per month for the second car I bought. I caught it right away and he said, "oh, you didn't want the warranty?" after I had clearly stated I didn't want it just 5 minutes earlier.

8. Go to pay for your car. Make sure you have the name of the person you had already set the price with on paper along with the price you would pay. Bring your printed copies of the online conversation you had with the internet sales person. While at the dealership, they may try and sell you additional options, extended service guarantees, or accessories. If you don't want any of these things, tell them upfront. Tell them you only have an hour to finish this process and you have to go. Don't be afraid to walk away from the deal if it's not what you agreed on. We did this for one of the cars and once we got into the parking lot to leave, they said they would give me the car at the price I had originally agreed on.

9. If you're a student, many companies offer student discounts that can be up to $5000. Bring this up after you've settled on the price so that you could take the discount off the settled price, not the retail price. You may need to present a certificate of graduation within 6 months of the date you are purchasing the car.

10. Good luck! Feel free to add your suggestions in the comments below. Thanks for reading! I hope this was helpful.