How I Bought My 2010 Malibu LT1 for Less Than $14,600!

I had been considering the possibility of buying a new car now for months. A week ago, as my 2003 Saturn Ion started signaling upcoming transmission problems (along with a myriad of other smaller problems of an annoying nature), I decided it was time to upgrade to a new vehicle. There were several cars that I chose to consider, but in the end, I focused on the 2010 Chevrolet Malibu.

Without taking a single penny directly out of my pocket, my total for a 2010 Chevrolet Malibu LT1, including all miscellaneous fees, taxes, tags, registration, etc., came to an astoundingly low $14,560, with a loan of 3.72%

How I did it was a through a combination of doing research on the internet, finding the best car-buying program I was eligible to participate in, shopping for the best loan before ever stepping into a dealership, and by hitting a triple crown of manufacturer rebates, including taking advantage of manufacturer loyalty programs.

The Malibu comes in four available trim lines. After some consideration of readily-available information on the internet, I decided that I would price the LS trim line, which is the base trim line. I was also considering moving up to the LT1 trim line, but, since I'm on a budget like most folks, the chance to move up to the LT1 trim would depend on the deals I might be able to find.

At the time that I purchased (June 2010) and extending at least into July, Chevrolet was offering a $3,000 Manufacturer's rebate on any 2010 LS, so I knew I would be entitled to at least that. I checked in with special car-purchasing programs offered both by my credit union and by AAA, and found that the AAA program would be better. Through the AAA program, I found a dealership about a half-hour away that was offering any Malibu at $1,100 under the dealer's invoice.

Considering that the LS model, without options, has an MSRP of $21,825 and an invoice price of $20,734, then starting at $1,100 under the invoice, meant I was already at a price point $5,191 below MSRP when including the $3,000 manufacturer's rebate. In addition, I was eligible for another $1,000 rebate for owning a Saturn as a loyalty reward.

Armed with this knowledge, I checked at a couple of other Chevrolet dealerships. I was hopeful that the dealership closest to my house - a mere 1.65 miles from my home - would match the price of the dealership about 30 miles away. Unfortunately, when I asked for their best price, they told me that the best they could do would be about $200 above dealer's invoice, which was $1,300 above my lowest price before rebates.

I mentioned that I was looking into the AAA program, and the salesman tried to dissuade me, saying that it would be a waste of my time, that no one would be able to do better than a couple of hundred above invoice. I thanked the salesman for his time and left. While I personally prefer to do business locally when the prices are at least close, I was unwilling to pay $1,300 more for the privilege of using the closest dealer. Although I did not choose to buy from the nearest dealer, I know now that their staff either is not particularly well informed about how competitive they are (or are not, as the case turned out to be) or that the staff deliberately lies in an attempt to keep the sales prospect on the lot. Consequently, I will think twice before I consider using them to service my new car that I eventually purchased elsewhere.

I am aware that some dealerships quote a low sticker price, but then back-load the deal with "required" dealer add-ons, such as advertising fees, dealer prep fees, etc. After confirming through the internet that the dealership working through the AAA program was not going to add anything else on, I shopped for a car loan. Surprisingly, Capital One offered me an interest rate at 3.72% - just 39% of the rate my credit union had offered to me, and lower than anywhere else I shopped.

I also knew I did not want to keep my 2003 Saturn. Using several online sources, I averaged out a value for the car at approximately $2,100 and posted it online for sale at that price. Although I had several nibbles, the best offer I had in a private-party transaction was just $1,600, which I declined.

Armed with my pre-arranged financing, a sense of what the Saturn was worth, and my starting point in pricing, I headed to the dealership. I looked at several Malibu LS and LT1 trims, and narrowed it down to two particular vehicles. It was time for brass tacks; I still wasn't entirely confident that the dealer wouldn't try to backload the deal by requiring an extended warranty or other costly expense. I was expecting, at the least, that the dealer might try to undervalue the Saturn as a trade-in. I had held back that I also had GM credit card reward points to apply, wanting to wait until after we had negotiated a trade-in value on the Saturn.

I had chosen an LT1 with a few options: spare tire, 6-way power driver seat, and body-side moldings. All of the additional options were priced at invoice price, rather than MSRP, as a benefit of the AAA program.

Looking at the vehicle I'd selected, the MSRP, including destination charges, was $24,210. Roughly another $260 would be added to that for various registration and titling fees, and then another six percent in tax, for an estimated un-negotiated total of $25,938.

With the AAA program and $4,000 GM rebates, the price of the car, including tags and related fees and taxes, I was feeling pretty good. When the dealer indicated that they would give me a trade-in value of $2,600, I was pleasantly surprised. Then I mentioned my GM card points (another $2,438.10). The salesman verified them, and finished up the paperwork.

The entire transaction was handled both professionally and pleasantly. When I had arrived, I had been hopeful, but somewhat suspicious, waiting for an unseen trap to be sprung. There was no unseen trap; we removed the remaining personal possessions in my old Saturn, transferred them to the new Malibu, and I drove off, quite pleased with the entire day. If I had not shopped around and brought in my pitiful old Saturn as a trade, I could have spent $25,938; instead, I spent only $14,560, a savings of $11,378.

The savings is even greater when considering the long-term difference in car loan payments. A car loan for $25,938 at the 9.5% my credit union offered would have had a monthly payment of $544.75, and would have incurred total interest of $6,747. The total cost of buying the 2010 Malibu without any negotiation then, including interest, would have been $32,685. The effect of buying the 2010 Malibu by separately negotiating the purchase and loan reduced the monthly payment to just $266, with a total incurred interest of $1,419. The total cost of buying the 2010 Malibu by negotiating each aspect then is just $15,979. Over the full five-year loan, my total savings then is a whopping $16,706!