Buying new car, what is your strategy?

[squirm]

Hi,
This time of year, I figure it might be a good time to seriously consider a new car. Ours is really getting worse for wear, and I think I've put off buying a new one long enough.

So what is your strategy? How do you handle swimming with those sharks? I figure go take test drives, then come back sometime later to discuss pricing.

What about trade in? Our car needs a new airbag computer, timing belt, new tires, and a new windshield. Frankly I've always hated selling via private party in having a stranger come over and complain why they should be getting the car or truck for almost nothing.

I was thinking about taking the car to Carmax and getting a quote, then another quote from the dealer after a new car price is already negotiated. In addition, should I fix the issues that need fixing first then get the quote, or not go that way? I think the fixes would costs about $2,500.

[tadamsmar]

I personally would sell without doing the fixes. I figure CARMAX or a dealer can deal with the fixes more efficiently than you can.

[john94549]

Just a thought. My wife sold her Beemer to a local mechanic (the one who had done the work on her car for many years). It needed about $2500 in repair work, but he knew he could do the work himself, and get the parts at his cost, so it was a "win win".

She knew what make and model she wanted for a replacement vehicle, got a quote from the USAA car-buying folks, and found the exact car, at that price, literally "on the boat" going to a dealer not far from here. Painless.

[Sulvar]

I thought that Carmax only bought cars that are relatively new. I wouldn't sell my used car through them, I'd just sell it on craigslist.

[Grt2bOutdoors]

I send e-mails to new car dealers "internet sales", ask for their best quote upfront with the options I want. I also state not to play games, then I visit the dealer for a test drive, at the very first sign of the "bait and switch" - I walk.
I've done this twice, those 2 dealers lost out on the sale.

[johnep]

Definitely get quote from Carmax for your car. Put it in your backpacket for negotiations with dealer. Carmax quotes are very credible with dealers but see if they will give you more first. If you trade your car in, you are doing 2 transactions: a buy and a sell. Dealers love to combine the 2 to confuse buyers. Your best bargaining position is the first time you go to a dealer. If you come back, they know they can get a better deal from you. If you know which dealer you want to buy from, go to another dealer and try out car first. That way you know what you want and can drive a better bargain. Your most powerful bargaining chip is to walk out the door. That is when you will get your best deal. Best wishes.

[Khanmots]

Promise yourself that you're not going to buy anything no matter how good of a deal, and then go look at and test drive stuff. By being in a headspace where you *know* you're not buying anything, it can be more amusing than stressful dealing with hard-pressure salesmen.

Once you've figured out what you want, options, what color(s), etc... then it's time to go online, visit edmunds and start finding out what incentives the dealer is getting from the manufacturer. What the "invoice" is. Hit up forums, see what prices people have been getting. In other words do your research.

Get your financing setup (if needed). Then start searching dealers online inventory for cars with the features you want. Then near the end of the month start calling dealers up (or emailing) and saying I saw that you have this car in inventory, if it's still available I can offer you a price of $X + TTL.

Important points are
1) Separate the decision of deciding on which car from the sales process. Do *not* buy the car the same day you decide on it. Give your emotions time to settle!
2) Be willing to wait. By being able to walk away you give yourself a powerful negotiation tool.
3) When negotiating, remove yourself from the dealership. Do so by phone or by email not in person. By visiting in person you'll have time and effort involved in having made the trip out there (sunk cost) that you won't want to see be wasted (why do you think that they make you wait so long when they go off to "talk to their sales manager", the longer you wait the more you have invested!). Most of their high pressure tactics are designed for in-person. Remove that from them!

[bradshaw1965]

I thought that Carmax only bought cars that are relatively new. I wouldn't sell my used car through them, I'd just sell it on craigslist.

The hassle factor on Craigslist for selling cars is extremely high. Craigslist is crawling with scams and flakes. I've had much better success with selling used cars on autotrader.com or similar sites.

[englishgirl]

Here's what I did (I already knew exactly what car I wanted - a Toyota Prius):

1. Signed up on the Toyota website to request prices from local dealers. Also requested a quote through American Express, and Costco. I realized that the Toyota option picked 3 local dealers that are not necessarily the ones I would pick myself, so I directly emailed two more dealers from their websites.
2. As the emails were rolling in (or maybe before, I can't remember), I went to visit 2 dealers to do a test drive. One was a bunch of sleazebags who didn't even have a Prius on the lot for me to drive, and told me to come back later. And then harrassed me by phone and email to buy a car off them (I still get promos 3+ years later). The other were really nice people, who answered questions, had a whole bunch of cars to test and who I just felt at ease with.
3. Once all the email offers were in, the best offer came from the really nice dealer. I emailed a couple of dealers back, asking them to match. They refused. So, decision made on where to buy the car, and I was very glad it was the nice guys. I started the buying process, again through email. I told them I would consider trading in my old car, but I was checking with Carmax.
4. Went to Carmax to get an offer on my car. It was pretty low.
5. Went to the dealer to pick up my car, and talk about trading in my car. They initially offered me less than Carmax, but I said "well, I was hoping to get more, and I've got a pretty good offer from Carmax" (without specifying the amount), the guy went away to "talk with his manager" and came back with a raised trade-in offer which was higher than Carmax. [It helped that this dealer is the local "Prius specialist" and I was trading in an old Prius, so I think they knew they'd easily get buyers and were able to raise their price.] Done deal. I paid cash (well, a check).

In my state, it is (somewhat) beneficial to trade in to the dealer, because you only pay sales tax on the difference between the trade-in value and the purchase price of the new car, as it's done in one transaction. I believe this varies by state, though.

The only annoying part was at the end of the sale, there was a salesman trying to sell me the extended warranty. I dithered, so he kept me there for ages. I should have been firm right from the get go, and I could have got out of there much quicker!

[drdrowsy]

feel free to go for test drives, but hold off talking price. Especially if you're living in an area with many dealerships, once you hone in on a make/model that you want, there's bound to be multiple dealerships with the identical product, now you just have to get the best price. Car buying websites can be helpful for getting ideas on prices, but I've found that dealers try to find ways to weasel out of those offers. My bottom line when purchasing was always getting quotes first over email for the exact car you want (you can look on dealers website and look at their stock. Make sure the quotes are "out the door" prices. You can then play the dealerships off of each other. Don't bother with places that won't give you a price over email.

You need to be ruthless. Remember that as much as they may try to convince you that they're losing money/not making money on a sale, they are surely not going to undercut themselves.

[jsl11]

I used Costco's buying service. They sent me to a local dealer with a pre-negotiated price. The dealer was required to show me the invoice. I used that price as a starting point and negotiated further. I feel I was able to get a good deal.

Jeff

[dratkinson]

In May '86 I bought a new car and thought I got a good deal. Not! In Sept the same vehicle was advertised at 75% of MSRP and much cheaper than I paid. Most annoyed, but I did learn a lesson.

Come forward to Dec '90 and time to buy a new (similar) car. Found the car I wanted, offered 75% of list... and got it. (Was prepared to walk out if I didn't get it.) Then added my hail-damaged car to deal as a trade in. Allowed dealership to negotiated a long-term, high-interest auto loan that greatly favored them as compensation for the low selling price (because I know nothing about compound interest and only cared about the monthly payments).

Paid the loan off in full the next month.

Learned I left money on the table because a Jan '91 manufacturer's rebate program lowered the price $2K more. Dealership held paperwork until Jan so they could claim/keep the $2K manufacturer's rebate for themselves. At my 1K miles service, the sales manager said my old vehicle had more damage than expected; I was suppose to feel bad for them. I asked if they were going to split the Jan $2K rebate with me. No.



Idea: Research sales ads from last year to find the lowest sale price for your vehicle last year. What percentage was it of the MSRP. Offer that and stick to your guns. Dealers seem to have an incentive to move sales as the end of the month/quarter/year.

Idea: Does your manufacturer typically offer rebates on Jan sales? More research. If so, claim that rebate for yourself.

Bottom line. Offer a percentage of MSRP that represents the lowest sales price from last year, less any Jan manufacturer's rebate.



My 2 cents.

[Watty]

One thing that I have found is key to buying a new car is not picking out the car you want, but instead picking out at least three models that would be acceptable to see which car would be the best overall deal. For example you might prefer a Honda Accord but Toyota, Ford, and Hyundai all have at least average comparable cars that would be a good choice at the right price. Buying a known below average car is rarely a good deal at any price you are likely to get.

On my last two cars all the negotiations was done by email and it was basically a done deal with an "out the door" price before I went to the dealership. I took a final test drive of the actually car that I was getting to make sure there were no obvious problems and then left with the car. If you are not doing anything with a test drive this takes less than two hours at the dealership.

There are lots of Honda dealers in my city and I found that about a third of them don't even try to deal over the internet and just email back that you should come in to talk, a third will give not serious offers, and a third will really deal over the internet.

[umfundi]

1. Buy a newspaper on Sunday.
2. Look for the best LEASE deal for a car you would accept having.
3. On Monday, call all dealers of that brand within 50 miles asking them to meet or beat that deal.
4. Choose the one that's closest.
5. Should take about 90 minutes of your time to find the best deal and decide.

That's how we have two almost new (2011, 2012) Malibus in our driveway, one for $189, the other for $199 a month, no money down. (3-driver family.) They get great gas mileage, all that we pay for is oil changes. (They do almost 10,000 miles between changes.)

It's like low cost index mutual funds. There are much more expensive ways to get cross town. Really, your car is an (even optional) appliance. Attach emotion to it, it will cost you more.

Keith

[rustymutt]

Our strategy is to drive the last new car we bought til hell freezes over.

[umfundi]

Our strategy is to drive the last new car we bought til hell freezes over.

That will be tomorrow night.

http://www.weathercity.com/us/mi/hell/

Keith

[Khanmots]

1. Buy a newspaper on Sunday.
2. Look for the best LEASE deal for a car you would accept having.
3. On Monday, call all dealers of that brand within 50 miles asking them to meet or beat that deal.
4. Choose the one that's closest.
5. Should take about 90 minutes of your time to find the best deal and decide.

That's how we have two almost new (2011, 2012) Malibus in our driveway, one for $189, the other for $199 a month, no money down. (3-driver family.) They get great gas mileage, all that we pay for is oil changes. (They do almost 10,000 miles between changes.)

My car has no payment... hasn't for years now, and easily has 10 years left in it (although I might upgrade after another 5). I've never seen the math work out so that leasing is doing anything other than gaining a short-term cash flow advantage at the expense of long-term higher costs.

There are much more expensive ways to get cross town. Really, your car is an (even optional) appliance. Attach emotion to it, it will cost you more.

There's much cheaper ways to kill an evening than going to the movies as well, doesn't mean one should never go to the movies.

To some people a car is more than an appliance to take them from point A to point B. Some people find the right car makes the trip itself something to be enjoyed. Personally I spent $6-8k more for a fun car than I would have for a transportation car. It's been more than worth it purely for the joy of enjoying my commute for the last 7 years.

[1530jesup]

After all is said and done, we, the average car buyer or leaser, do this once every couple of years (or decades).

The dealers run their game all day long - every day. We can get low down, but there is always that pile of money that stays on the dealer's table. Some nice suggestions and they apply to other purchases as well; from a mattress to a dream home up for sale.
good luck, and enjoy the adventure, Rich

[umfundi]

I've never seen the math work out so that leasing is doing anything other than gaining a short-term cash flow advantage at the expense of long-term higher costs.

Show me the math that purchasing any car is less than $200 per month, no matter how long you own it. Please include purchase price, tax, and resale price.

Funny thing. I will exchange my short term cash flow advantage for another in a year's time. Looks like I might get a Chevy Cruze for about $180 per month.

I have ZERO long-term higher costs. And, a car that is always under warranty with free roadside service (which I have never used.)

Keith

[madbrain]

I thought that Carmax only bought cars that are relatively new. I wouldn't sell my used car through them, I'd just sell it on craigslist.

The hassle factor on Craigslist for selling cars is extremely high. Craigslist is crawling with scams and flakes. I've had much better success with selling used cars on autotrader.com or similar sites.

+1 on that. I was trying to sell my 2007 Prius for 2 months on craigslist. I got plenty of calls, many made appointments, and very few people actually showing up. Despite the car being in perfect condition, never having any issue, having been detailed, and having 2 years left of extended warranty to boot. Price was in line with KBB private party. No one made a real offer.

I finally had enough and took it to the same Toyota dealer where I bought it yesterday. They made me an offer which was the KBB "excellent" trade-in value, which I accepted. It was done in 2 hours. That's what I should have done in the first place.
I didn't want to keep trying on my own through other web sites, it is the end of the year and in 12 more days it would have been a "6 year old car" vs "5 year old" . Perceptions matter. Despite me not adding miles on the car, the KBB value was dropping quite a bit over time.

Note that I wasn't buying a car from this Toyota dealer. It was just a straight sale. I already leased a Nissan leaf 2 months ago.

[glock19]

When getting quotes over the internet, can you just get the quotes by email or do you have to give your phone number to get an email quote? Last thing I want is my time wasted by receiving worthless calls asking me "what will it take".

[Tim_in_GA]

When getting quotes over the internet, can you just get the quotes by email or do you have to give your phone number to get an email quote? Last thing I want is my time wasted by receiving worthless calls asking me "what will it take".

I went through Edmund's and they require a phone number. I'm getting a lot of calls every day even though I clearly indicated I want to correspond by email right now. Everyone wants to get me in their dealership. All I want is someone to give me an honest email quote and only one dealer has been able to do that. Some can be pretty annoying.

[bUU]

When I sell/buy a car, I factor in the costs other than price tags and such. The risk of dealing with buyers who I may not be able to trust; the opportunity cost of the time and stress necessary to get marginal improvements in pricing, etc. - all that adds up and drives me away from tactics that aren't tried-and-true. I don't invest in complex, less-known/less-used "financial instruments" and "investment vehicles", and I don't buy and sell using complex, less-known/less-used tactics. I research the best, commonly-used tactics, and then apply those.

I sold and bought cars twice this year, and utterly pleased with the end-result. I appraised various purchase options using many resources, but the one that I found most valuable was US News - Rankings and Reviews - Best Cars. I didn't blindly choose the #1 car in the specific category, but rather read through the reviews of the best twenty and factored our own preferences and priorities into the consideration of all twenty reviews.

For the sale of our old cars, I went with dealer trade-in, after considering all the other approaches (including giving cars away to family) and assessing which represented the optimal balance of risk and reward, based on our personal standards. The value of convenience and ease of sale was substantial - easily overwhelming the value other options afforded with regard to other characteristics of the transaction.

(I don't mean to take anything away from CarMax, by the way. At the time, CarMax's website was showing that the closest store was 90 miles away, and I didn't want to deal with someone, even someone reputable, out of state. The website is now showing a store 40 miles away - probably still too far away to satisfy our preferences and priorities regarding risk and reward, but regardless, I can attest that if there was a CarMax within twenty miles of here, I would likely have gone that route.)

[doug91]

I'm in the middle of doing exactly the same thing. I tried Carwoo, which seems like a really interesting concept, but so far (3 days in) only one dealer has responded. That said, he's given a really detailed response with complete price, sight-unseen estimate on trade-in, and all fees itemized.

I did the USAA buying service online, and with one phone call (which we only needed to gather info on the trade in), I have a complete out-the-door quote and an estimate on the trade-in as well.

The other thing I did was to go to cars.com, cast a really wide net geographically,and sort by price. Then I sent emails to a few dealers that had the lowest prices on the car I wanted, and like one of the posters said, they pretty much all just called rather than corresponding by email. However, I have found that since I started with low prices on cars.com, all of the conversations I've had have resulted in lower offers than either of the two services above. My takeaway is that the services above are convenient, but I suspect that picking specific cars from specific dealers and contacting them directly will probably end up getting a $1,000 - $1,500 lower price.

[bUU]

I just realized, I cut my earlier message short. I found one other tool which I feel is essential: Off of one of the car sites, either that US News site I mentioned earlier, or perhaps KBB or Edmunds, I found a service that essentially posts every sale, and so soon after a car is released you can find out what other folks are actually paying for the car. While you're not going to see the very best deals made (because the dealer will have to obfuscate how good the deal is by trading off values between different line items) you can get a pretty good feel for how deeply you can get the car discounted, and essentially walk away if you don't get as good a deal.

[Tim_in_GA]

The dealer closest to me still won't quote a price via email and says "please come in to talk to my manager." That's what they want - to get you in for the high-pressure sale. I'm about to tell him to ask his manager if he really wants to sell a car or not. Or I just ignore him and move on to the other dealers in our metro area.

[tyrion]

The dealer closest to me still won't quote a price via email and says "please come in to talk to my manager." That's what they want - to get you in for the high-pressure sale. I'm about to tell him to ask his manager if he really wants to sell a car or not. Or I just ignore him and move on to the other dealers in our metro area.

Move on. That's their culture and you're not going to change it.

[mnnice]

I've never seen the math work out so that leasing is doing anything other than gaining a short-term cash flow advantage at the expense of long-term higher costs.

Show me the math that purchasing any car is less than $200 per month, no matter how long you own it. Please include purchase price, tax, and resale price.

Funny thing. I will exchange my short term cash flow advantage for another in a year's time. Looks like I might get a Chevy Cruze for about $180 per month.

I have ZERO long-term higher costs. And, a car that is always under warranty with free roadside service (which I have never used.)

Keith

I don't think your challenge is that challenging. In Feburary of 2004 I bought a 2004 Pontiac Vibe. My out the door price for the car, tax, title, and registration was $14,500. I still own it and its current private party sale price is about $3500. I have spent about $750 fixing stuff (including the $150 for new mirror I stupidly ripped off when I backed out of my garage during the summer of 2004). I have spent another $500 on non oil change preventive maintance, about $1200 on three sets of tires, and another $50-75 on a new battery. Anyway I have spent about $17,000 buy and repairing it. I am not counting oil changes because that is an expense you have too. I have also saved $500 or $600 in insurance since I no longer have comp and collision on it. Anyway $13,500 ($17000-$3500) divided by the 106 months I own it comes out to about $127 plus I have spent less on insurance than you have.

This car has always started for me and never stranded me anywhere. I don't think my experience is all that exceptional or that I have owned it an extremely long amount of time. The average car on the road is older. I also have about 150,000 miles on it. If I had the standard 24month/24,000 mile lease I would also have had to have driven 50,000 few miles.

[Browser]

Since the dealer is going to get the edge on you (they'd go out of business if they didn't), your goal is to do enough dithering around that you can end up convincing yourself you actually got a "good deal." Whether you actually did is highly open to debate. Or, you could just go ahead and buy the damn thing and save yourself the trouble.

[umfundi]

I don't think your challenge is that challenging. In Feburary of 2004 I bought a 2004 Pontiac Vibe. My out the door price for the car, tax, title, and registration was $14,500. I still own it and its current private party sale price is about $3500. I have spent about $750 fixing stuff (including the $150 for new mirror I stupidly ripped off when I backed out of my garage during the summer of 2004). I have spent another $500 on non oil change preventive maintance, about $1200 on three sets of tires, and another $50-75 on a new battery. Anyway I have spent about $17,000 buy and repairing it. I am not counting oil changes because that is an expense you have too. I have also saved $500 or $600 in insurance since I no longer have comp and collision on it. Anyway $13,500 ($17000-$3500) divided by the 106 months I own it comes out to about $127 plus I have spent less on insurance than you have.

This car has always started for me and never stranded me anywhere. I don't think my experience is all that exceptional or that I have owned it an extremely long amount of time. The average car on the road is older. I also have about 150,000 miles on it. If I had the standard 24month/24,000 mile lease I would also have had to have driven 50,000 few miles.

I'll concede, but not completely. You put down a lump sum of $18,000 (in today's dollars) eight years ago. I have zero down. The Malibu is a significantly larger car than a Vibe.

Your point about the mileage is a good one. We only put about 8,000 miles a year on each of our cars. The penalty for exceeding the allowed miles is 15 cents per mile on one car, 25 on the other.

Which leads me to my argument that if you have a long trip, it is better to rent a car than drive your own. Over a weekend, four days, I can get a car from Enterprise for $10 per day. Much cheaper than miles on your own car. People don't like that argument either.

Keith

[umfundi]

The dealer closest to me still won't quote a price via email and says "please come in to talk to my manager." That's what they want - to get you in for the high-pressure sale. I'm about to tell him to ask his manager if he really wants to sell a car or not. Or I just ignore him and move on to the other dealers in our metro area.

The dealer where we get our cars is 25 miles away. There are probably a dozen Chevy dealers that are closer. The ones closest to me are particular sleazebags.

Keith

[mnnice]

I don't think your challenge is that challenging. In Feburary of 2004 I bought a 2004 Pontiac Vibe. My out the door price for the car, tax, title, and registration was $14,500. I still own it and its current private party sale price is about $3500. I have spent about $750 fixing stuff (including the $150 for new mirror I stupidly ripped off when I backed out of my garage during the summer of 2004). I have spent another $500 on non oil change preventive maintance, about $1200 on three sets of tires, and another $50-75 on a new battery. Anyway I have spent about $17,000 buy and repairing it. I am not counting oil changes because that is an expense you have too. I have also saved $500 or $600 in insurance since I no longer have comp and collision on it. Anyway $13,500 ($17000-$3500) divided by the 106 months I own it comes out to about $127 plus I have spent less on insurance than you have.

This car has always started for me and never stranded me anywhere. I don't think my experience is all that exceptional or that I have owned it an extremely long amount of time. The average car on the road is older. I also have about 150,000 miles on it. If I had the standard 24month/24,000 mile lease I would also have had to have driven 50,000 few miles.

I'll concede, but not completely. You put down a lump sum of $18,000 (in today's dollars) eight years ago. I have zero down. The Malibu is a significantly larger car than a Vibe.

Your point about the mileage is a good one. We only put about 8,000 miles a year on each of our cars. The penalty for exceeding the allowed miles is 15 cents per mile on one car, 25 on the other.

Which leads me to my argument that if you have a long trip, it is better to rent a car than drive your own. Over a weekend, four days, I can get a car from Enterprise for $10 per day. Much cheaper than miles on your own car. People don't like that argument either.

Keith

I would argue that the Vibe and the Malibu have different long suits, but are very comparable cars. They are very similar in price (for the years they were both being made), mileage, and both have similar sized four cylinder engines. If I was going out for dinner with three other adults I would want the Malibu for sure. If I was schlepping kids, groceries, or the 50 gallon plastic trash can full of stuff to the recycling center I would want the Vibe. If I had a 30 mile round trip solo commute I think I would view it as a wash. Anyway the Malibu has superior backseat space but inferior cargo space.

I do totally agree with you about the car rental thing especially since DH works just a couple of blocks from the Enterprise office so for us it is also super handy too.

I would also agree with you about the not having cash tied up in the car, but I have never been sure what ROI I would count towards that. It would have to be pretty low risk (cash or practically cash) IMO.

While part of me would love to have a new car to drive every two years. I dislike the actual car buying/lease process. It always seems to take about four times longer than I think it should. Then there is the repeated no's. No I don't want scotchguard or GAP insurance or an extended warranty. By that point I usually want a sandwich because we have been sitting there so long.

Anyway I think you should keep on leasing and I should keep on buying (unless I get a screaming deal on EV).

[umfundi]

While part of me would love to have a new car to drive every two years. I dislike the actual car buying/lease process. It always seems to take about four times longer than I think it should. Then there is the repeated no's. No I don't want scotchguard or GAP insurance or an extended warranty. By that point I usually want a sandwich because we have been sitting there so long.

Yes. Too bad that Rick Ferri does not sell cars!

I have made it a priority to find a car salesman I can deal with and trust. Had a good one at a Pontiac dealer, now I have a good one at a Chevy dealer. ScotchGaurd, Ziebart, pinstriping, ... never come up.

Do you live near an auto plant? If so, find a dealership for that make near the plant. They are likely used to dealing with employees who have a company discount and get the best deal possible. Those dealerships make their money by moving the metal, not by screwing their customers.

Keith

[mnnice]

Yes. Too bad that Rick Ferri does not sell cars!

I have made it a priority to find a car salesman I can deal with and trust. Had a good one at a Pontiac dealer, now I have a good one at a Chevy dealer. ScotchGaurd, Ziebart, pinstriping, ... never come up.

Do you live near an auto plant? If so, find a dealership for that make near the plant. They are likely used to dealing with employees who have a company discount and get the best deal possible. Those dealerships make their money by moving the metal, not by screwing their customers.

Keith[/quote]

I think I live about as far from a car plant as I ever have (the closest is 500 plus miles away). I used to live within walking distance of the now closed Ford plant in St. Paul, MN. I have also spent many years living either in Michigan or Wisconsin within a couple hours of plants. In South Dakota we grow stuff we don't make much stuff

[Outer Marker]

As others have pointed out, there are two separate transactions, and you need to negotiate hard/do extra work on both to get the best deal.

1. Regarding the new car purchase, it is vital that you know the absolute dealer cost. Not just the "invoice" price, but also how much the dealer is getting in hidden discounts like the "dealer holdback" (2-3%) and manufacturer rebates and dealer credit. Edmunds is a great free resource, though you have to ferret around a bit on the website to collect all the discounts and calculate the true dealer cost. It is then much easier to negotiate the contract with a stack of Edmunds print out in front of you -- i.e., to negotiate the profit you are willing to pay the dealer for the privilege of writing up the contract ($500 to $1000 might be fair), vs. a "discount" off the ficticious and inflated sticker price. Also negotiate hard on things like documentation fees and dealer prep fees -- which are pure profit; insist on a correspondingly lower base price if they won't waive those fees.

2. Regarding the used car sale, you are almost invariably going to do better selling yourself than paying for the convenience of the dealer taking it off your hands. The last time I had to upsize from a Passat Wagon to a Honda minivan, the best offer I could get from a dealer was $1,500 trade in on the wagon. It sold in 48 hours for $4,000 cash on craigslist, paid in crisp $100 bills from a buyer who was very happy to get it for less than retail bluebook. (Also sold within the last few years a Honda Civic and Mazda Miata, with similar quick and painless success). I aim to price the cars fairly and aggressively, while still allowing 2-3x more proceeds than a dealer trade. I also make sure the cars are clean and washed, and have all maintenance records available for inspection.

Best of luck!

[squirm]

Guys, thank you very much for your replies. You have helped me out. Thanks again.

[madbrain]

2. Regarding the used car sale, you are almost invariably going to do better selling yourself than paying for the convenience of the dealer taking it off your hands. The last time I had to upsize from a Passat Wagon to a Honda minivan, the best offer I could get from a dealer was $1,500 trade in on the wagon. It sold in 48 hours for $4,000 cash on craigslist, paid in crisp $100 bills from a buyer who was very happy to get it for less than retail bluebook. (Also sold within the last few years a Honda Civic and Mazda Miata, with similar quick and painless success). I aim to price the cars fairly and aggressively, while still allowing 2-3x more proceeds than a dealer trade. I also make sure the cars are clean and washed, and have all maintenance records available for inspection.

The 2x-3x more proceeds than the dealer trade only applies if you are trading a vehicle in that price range.
I tried to sell my fully loaded 2007 Prius for 2 months on craigslist. I was trying to get $15k out of it which was slightly below the KBB private party value at the end of the 2 months (and well below what it was at the beginning). No dice. Many callers that made appointments just never showed. Some even wanted me to drive the car to them 50 miles away !
I ended up selling it to the dealer on wednesday for $12900 . It's $2100 less than I hoped, but the lack of aggravation was worth it. There is no way it could have sold for 2x - 3x private party. If I had known, I would have sold it to the dealer on day 1 instead of waiting for the depreciation to occur, and might have gotten $500 more.

A few years ago I sold a 10 year old Prius, first model, 2001 . Several dealers offered $1500 ! I put it on craigslist and sold it the next day for $5000 .

I think the reality is that dealers will pay about $2000 - $3000 less than market value. Of course if you have a $4000 car it does not make sense to sell it to the dealer. On a more expensive car, it might.

[Outer Marker]

The 2x-3x more proceeds than the dealer trade only applies if you are trading a vehicle in that price range.
I tried to sell my fully loaded 2007 Prius for 2 months on craigslist. I was trying to get $15k out of it which was slightly below the KBB private party value at the end of the 2 months (and well below what it was at the beginning). No dice. ..

Agree the multiplier has a lot to do with the price range your trading in, and my comments are based on personal experience in the mid four figure value range. However, lot of cars are traded in this range, and there is good opportunity for those that are willing to invest a bit of effort in what it takes to sell privately.

I'd add that you post points out there is market inefficeincy in the higher end of the used car market -- which can work to the advantage of bogleheads that are willing to hunt down those bargains. Consequently, if you have the cash or pre-arrange your own financing, you can pick up bargains from private sellers.

[Atilla]

My strategy is: figure out what you want and how much you're going to pay ahead of time. Get the deal done and walk away happy. Donate the trade in to charity.

[Bench]

Truecar.com made my last new car purchase extremely painless. They do all the research for you, and dealers give you guaranteed prices (usually just a few hundred above what the dealer actually pays).

[gerntz]

Promise yourself that you're not going to buy anything no matter how good of a deal, and then go look at and test drive stuff. By being in a headspace where you *know* you're not buying anything, it can be more amusing than stressful dealing with hard-pressure salesmen.

Once you've figured out what you want, options, what color(s), etc... then it's time to go online, visit edmunds and start finding out what incentives the dealer is getting from the manufacturer. What the "invoice" is. Hit up forums, see what prices people have been getting. In other words do your research.

Get your financing setup (if needed). Then start searching dealers online inventory for cars with the features you want. Then near the end of the month start calling dealers up (or emailing) and saying I saw that you have this car in inventory, if it's still available I can offer you a price of $X + TTL.

Important points are
1) Separate the decision of deciding on which car from the sales process. Do *not* buy the car the same day you decide on it. Give your emotions time to settle!
2) Be willing to wait. By being able to walk away you give yourself a powerful negotiation tool.
3) When negotiating, remove yourself from the dealership. Do so by phone or by email not in person. By visiting in person you'll have time and effort involved in having made the trip out there (sunk cost) that you won't want to see be wasted (why do you think that they make you wait so long when they go off to "talk to their sales manager", the longer you wait the more you have invested!). Most of their high pressure tactics are designed for in-person. Remove that from them!

This works for me. I drive them till they drop/stop - still with my 10.99 Lincoln LS & 150K - and don't like the buy process effort. Because of that, I search long with test drives for the models than can fit me - headroom with a moonfoof, decent/good acceleration, most creature features. Once I'm into it though, playing with the salesmen & their bosses amuses me.

[SpaceCommander]

I've used "Fighting Chance". I think it's the best way to zero in on the best prices and spot real bargains. It helps you see through the smoke, mirrors & dealer holdbacks. When I purchased my 2011 truck, I used the service and was able to get it at a price significantly lower than the average price that truck sold for in my area.

http://www.fightingchance.com

I've compared with other car buying services: costco, usaa, truecar, etc. I think this is a better way to go.

[aja8888]

Truecar.com made my last new car purchase extremely painless. They do all the research for you, and dealers give you guaranteed prices (usually just a few hundred above what the dealer actually pays).

Trucar receives compensation from car dealers for referrals. Read the "Fighting Chance" publication or do a little research on these websites that promote what others have paid for cars. The general public never will know what the dealers actually pay for cars from the manufacturer. It's a well kept secret and includes kickbacks and bonuses not made available to dealer staff or the public. If you think "invoice price is what dealer's pay, you are mistaken. Glad you got a good deal.