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I’m not a professional car shopper, but I have my own system that has worked very well, and has significantly reduces the drama in buying a new car. I want to share my thoughts, and hopefully these tips will help you with your car buying experience.

Though you may be looking for a truck or minivan, I’m including all automobiles into “car” for the sake of this article. These tips include how to get the best price for the car you want.

1. Define your budget.

This is a step that is often skipped, but shouldn’t be. You need to determine what type of car you can afford. And you want to buy a car that won’t put you in debt for the next 7 years. Be cautious with your money. Determine what you can afford on a monthly basis. For our example, we will use some real numbers, let’s say we can afford $500/month towards our car.

2. Unless this car is for your business, DO NOT LEASE.

Leasing introduces a number of fees that significantly increases the cost of car ownership. It lures you in with low payments, then socks you with high up-front acquisition fees and zero (sometimes negative) residual value. Many people lease expensive cars because they can’t afford to purchase them. If you lease, you will be paying a monthly car payment FOREVER! Do not fall into this trap. I have very smart friends who have.

3. Once you know your monthly payment, do the math and determine the cost of car you can afford.

We used a monthly payment of $500. For every $100, you can afford $5,000 of car. That’s rough math, but it works out very well. So, for $500, we can afford a $25,000 car. If you are trading in a used car, you may use that money to determine which cars you can afford. For us, if we have a car that is going to trade-in with a $7,000 value, we can really afford a $32,000 car. Make sure though that the dealer is really going to give you $7,000 for it. Many people are surprised how little the dealerships pay for your used car today.

4. Find three (3) cars within your budget that you want.

For example, maybe you want an all-wheel-drive sedan. I know there are many AWD sedans in the $30,000 range, so I narrow my list of 3 cars by looking on websites, visiting dealership show-rooms, and maybe going to the local auto-show. Let’s say I narrow my list to the Ford Fusion ($29,000), Mercury Milan ($29,000), and Subaru Impreza ($22,000). Narrowing your list to 3 cars is a huge task, but the next task should settle you into the one (1) car you want.

5. Look at Consumer Reports, Edmunds.com, and other websites for auto reviews on your 3 cars. Ask friends too.

Consumer Reports has car-crash ratings, independent reviews, and customer satisfaction ratings for many vehicles. You may find 1 or 2 of your cars has terrible ratings. This should help you eliminate a car or two. If you still have cars left, ask friends who may own these cars and ask them if they are satisfied.

6. You should now know which car you want, but we don’t know how or where to buy it yet.

It is important to know that buying a car is half a) deciding what to buy, and half b) actually buying it. We are now moving into the “buying phase”. Hold on, it’s about to get interesting!

7. Find the precise model, package, options, accessories, and colors you want on your car.

Still be conscious of price here. For our example, we decided we want a Ford Fusion. Go to the manufacturer’s website, ford.com, and “build-your-car”. Every car manufacturer has a website, and each of their websites has a “build-your-car” option that helps you configure your exact car. Choose the model, package, accessories, options, and color you want. Make sure your final price MSRP is near your budget. If it isn’t, return to step 4.

Once you’ve “built-your-car”, print out the details of your car.

8. Call 5 dealerships and talk to the Internet Sales department.

Do NOT drive to any dealerships. All of this work can be done over the phone. And actually, it’s more effective doing it over the phone, as you won’t fall into many auto sales traps.

Car dealerships have created “Internet Sales” department which specialize in the competitive marketplace of buying cars on the Internet. Dealers have learned that most Internet users know how to get the best deal, and have conceded most of their profit in hopes of getting a quick sale. Because of this, you should have done all your homework to know exactly what car you want in the steps above.

9. Give your car specs to all 5 dealers to quote.

Tell the Internet Sales person that you know what car you want and are ready to buy. The Internet Sales person is your friend, so you don’t need to be mean to them. They are trying to help you. But on the flip side, don’t let them run you over. Provide them with the car specs you printed out earlier. Tell them you want them to quote that exact car, even if it’s not in stock. You are trying to determine which dealers provide the best Internet pricing.

Make sure your quotes include documentation fees, but not taxes and title. Also be sure to ask your dealer if they have any other fees to purchase the car.

10. Review the 5 quotes and determine which offer you will accept.

Your 5 quotes should have the same auto configurations, but bottom-line pricing will probably be different. Remember that any Ford dealership can maintain your Ford Fusion — you do not need to buy from your local dealer. Buy from the dealer with the most competitive price. Also, you don’t need to worry about the county tax-rate of each dealership, as taxes are calculated based on where YOU live, not the dealer’s location (at least in Ohio that’s true).

When you purchase your car, make sure the dollar figures on your quote are the same as your purchase order.

Because dealers cannot stock every car, they trade between each other. This is also called “locating a car”. Dealers can look across the entire country to find your car, and will often send a porter to drive up to 300 miles away to another dealer to swap cars and bring back your new car (likely after you sign the purchase agreement). Just because the exact car you want is on only one dealer’s lot, ANY dealer can competitively quote that vehicle and “locate it” for purchase for you.

That’s it!

Good luck on your car buying journey. With a little luck, your car buying should take about a week and provide you with the absolute lowest price available. And if you can, use the extra money you saved to pay down any debt from your new car purchase. Enjoy your new car.