How To Buy A Car, based on Rob Gruhl’s lecture “How To Buy A Car Without Getting Screwed”

Step 1: Get Your Head In The Game

Let’s get a few quick and dirty things out of the way. Consider these The Penguin’s Golden Rules of Car Buying.

  1. Buying a car is a game

  2. Very few people like to play

  3. Those that like to play, play it well

  4. Unfortunately, those that like to play usually do the selling

  5. You need to be armed with knowledge and patience to win in the game

  6. Be true to YOURSELF and no one else

  7. Look at three (no more, no less) vehicles in detail

  8. You will feel like an ASSHOLE

  9. Just Say No!

  10. Don’t sign until you’re done you’ve won

  11. Objective: Walk away a winner

If you’re like most people you have a lot of catching up to do. You probably have not kept up on all new innovations, the subtle differences between each car company, or really anything at all. UNDERSTAND THAT THIS IS NORMAL AND PERFECTLY OK.

Step 2: Know Thy Self

I know it’s cliche, but we need to amass lots knowledge quickly and effectively. This means we cannot waste any time.

Rather than list attributes, use CarZen’s consultant to narrow down the car for you. This is for new cars, but can be especially helpful in determining used models to look at. When filling out your profile make sure to follow GOLDEN RULE 6: Be true to YOURSELF no matter what. Even if the reasons sound stupid to everyone else, the car needs to work for what you want it to do. You won’t be happy adapting your habits to fit a car that you thought everyone else would like. You want what you want; go get it.


GOLDEN RULE 7 is not a negotiable rule. Your goal is to narrow (or broaden) your horizons to three models. No more. No Less. You will test drive these vehicles. More than three will take too much time, confuse your comparisons, and give you too much to think about. If you do not compare three you will not know enough to make a knowledgable decision. Too many people HATE their “dream” cars because they did not spend their time comparing wisely.

Step 3: Reserve Two Full Weeks

The dealership is counting on you being rushed and uneducated. Do not give them these stupid advantages.

Step 4: Secure A Loan from Your Bank

Unless you plan to pay for your vehicle in cash, you’re going to need financing. Do not wait until you’re cornered in enemy territory to discover what you can afford (actually read, whatever the enemy is willing to offer you).


You need to know the terms of battle going in, and the banks will usually give you the best terms. Your loan amount and rate will be determined from your income and credit scores. How do you know the dealership is giving you what you justly deserve? The bank has little reason to shortchange you. Even if you get a better financing deal from the dealer, get this loan as a baseline or else how do you know what a better deal is? Don’t think you know what the better deal is, make the dealership prove it’s a better deal.

Side Note: Your Old Car?

If you’ve got an old car to get rid of, do NOT trade it in. The dealership already has you up against the wall in this deal, don’t give them an even greater advantage. The dealer will buy the car for x price and turn around and sell it to someone else for x plus 1200 or even 1800 more. Should the dealer profit and you lose? Sell your car on Craig’s List, sell it to a friend, donate it. Anything you can do is better than selling it to the dealer.

Step 5: The Test Drives

You are going to test drive all three cars. Even if you absolutely fall in love with the first car, you are going to test drive all three cars.


There are plenty of websites that will tell you what to look for in a test drive, but the key is in step 2, Know Thy Self. If you see your car as something to get you from point A to point B, ignore the fancy options, or how peppy or how stiff the suspension is. These things are NOT important to you. Perhaps note them for comparison later, but prioritize what is important to you.

If you’re like my best buddy for example, you’ll need to make sure your new car makes it easy to load and unload your bunny stroller and has a safe place for your bunny’s cage. The point is no matter how crazy it sounds, make sure the things you do everyday can be accomplished easilly in the car you’re going to buy.

Note the maintenance schedule and fuel type. If you’re car will require premium fuel, be prepared to use premium fuel. You’ll be told by many, many people that it will be perfectly okay to use regular, and when you do, the car will run just fine. However, if you are planning to keep the car in the long term, you will see the best results in 7-12 years if you followed the recommendations and maintenance schedule exactly.

Side Note: Dealer or Private, New or Used

When I say dealer you can replace it with anyone you’re purchasing from, new or used. In fact, if it isn’t a dealer you may need to be MORE wary. Be sure to run a Carfax report to get the details on the condition of the car, and when you test the car look at and write down the VIN that you see on the dashboard. Then, check the VIN on one of the following places: on the engine; on the door panel; in the trunk). Some people try to fake the VIN to hide an accident or some other misfortune.

Step 6: Go Home

After your test drives, go home. Do NOT buy a car. You will be pressured to, but you shall not do it. Even if you’re absolutely sure you want THAT car, don’t buy it.


First, you need to minimize the emotion and desire from your decision. Second, you need to determine a good price for the car.

The sales people will make you feel like an asshole. GOLDEN RULE 8 is the primary feeling sales people want you to feel because it gets you to make rushed, unwise decisions. Do not let this get to you. You’re dropping a considerable amount of money here on a machine you will be spending a significant portion of your life inside of. Make a good decision. Wait. Learn. Win.

Discuss the insurance implications with your agent. This may be easier with some insurance companies than others. If you’re with one of the bigger (and a little costlier) companies, your agent will be more than happy to sit with you and run quotes for you. Some models may cost hundreds more to insure than others.

Step 7: Make Your List

Now that you have waited and wisely decided upon which model of vehicle to bestow your precious savings, go to the maker’s website and choose the specific trim of the model you want. Pick the options packages and options you want. Look at no other trim, than the one you decided on, but know that the options available on the lot will vary from dealer to dealer.

Step 8: Get Prices

Now everyone knows the invoice price is what the dealer pays for the car, so we should negotiate based on that right? No. Everyone, including the dealer, knows the invoice price, so the dealer adds countless fees to jack up the price: title fees, port fees, stocking fees, inventory fees… you name it, it will be in there.


You need to know how much other people paid for the car:

These sites post the actual price people paid out the door for a certain vehicle. Keep in mind this is anecdotal data and may not even be true, but it will give you a general idea.

Step 9: Shop Around For Your Price

You need the dealerships to battle each other for your business. Free market capitalism only works if there is competition. Call 8-10 different places and tell them you want a competitive bid.


Car guy, Rob Gruhl presents how to shop around perfectly:

  1. You: I’m really interested in buying a car today, can you give me a price? I’m doing competitive bidding.

  2. Them: We don’t do competitive bidding

  3. You: If you give me the best price I’ll come down and buy the car from you TODAY

  4. Them: Let me give you a call back

Why? They actually do competitive bidding.


Now is the key part, they’ll try to sell you on something great like “invoice plus $500” which sounds like a steal, but when you show up the’ll tell you about the fees above. No, you want the “drive it off the lot” price. The amount that is on the check they get with all their crap in there.

Now that everything is set for the car you actually want, make sure they have it. They probably don’t have it, but when you get there they’ll try to sell you something else, something where they get a better deal off you.

Ask for the VIN and ask them to walk you through all the options on the car you’re discussing.

Step 10: Show Up For The Deal

Everything is perfect now. You have the car, you have the deal, you show up ready to buy the car and what are you going to do?



Why? Because I guarantee something will go wrong. “Oh, we’re terribly sorry, someone just bought the car.” or “I made a mistake and it turns out that car has a performance package on it and we need to charge you another thousand dollars.”

You say, “I’m sorry, I thought we had a deal. It’s a shame I’m not going to be buying a car from you today.” You leave.

Back to step 9 and calling around. Maybe you get a call back for the original deal, but when you go back in, they’re going to try to wear you down.

Step 11: Surviving the Gauntlet

You will get every pitch in the book. Bring a friend, bring a game, bring a picnic, bring a book. You will have to survive the gauntlet, and you need to follow the simple sage advice of Barbara Bush: GOLDEN RULE 9: JUST SAY NO!


If something seems weird, it usually is. Maybe they say here, “Sign this ‘as is’ slip” (which means no guarantees and no warranty) or “We can’t write it on the contract because there is not enough space”. If it seems weird, it is weird. Stick to your guns.

They will make you feel like an asshole, “Everyone signs this AS IS slip, what’s your problem?” Stick to your guns, you’ll feel like an asshole, but know that if you feel like an asshole, you’re doing it right.

GOLDEN RULE 10: DON’T SIGN UNTIL YOU’RE DONE YOU’VE WON. They will keep tring to get you to agree to things along the way. They can continue without you signing a single thing (they just don’t want to). Do not sign until the very end when everything is in front of you. They have the terms, the “out the door” price is there, they’ve got the keys, and you’re going to do it. Make sure everything you agreed to is in writing.

Step 12: The Back Room

You’ve got your deal and everything is done, but while they have you there and they’re doing their photocopying and checking with the DMV and whatever else, they will take you into the back room. This is the sinister, evil back room that you’ve been fearing in your dreams since you were a kid. They will take their proven “King-of-annoying-people-to-no-end” and sic him on you.


Everything he offers you, you can get for half price. No kidding. Maybe not half, but certainly cheaper.

Rob notes, “You wouldn’t stock up on candy from a movie theater to go home.”

Don’t buy a single thing (and I’m specifically talking about extended warranties). It’s not worth it.



  • Buying a car is a game

  • Very few people like to play

  • Those that like to play, play it well

  • Unfortunately, those that like to play usually do the selling

  • You need to be armed with knowledge and patience to win in the game

  • Be true to YOURSELF and no one else

  • Reserve Two (2) FULL weeks

  • Secure a loan from your bank FIRST

  • Sell your old car yourself

  • Look at three (no more, no less) vehicles in detail

  • Take your time and decide wisely

  • You will feel like an ASSHOLE

  • Just Say No!

  • Bring support… they’ll help you say no and continue to try to convince you that you’re not an asshole

  • Don’t sign until you’re done you’ve won

  • Walk away a winner