My New Car Buying Tips

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denovo
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My New Car Buying Tips

Post by denovo »

I've done this a couple of times, and wonder what you guys think. I think I have got the best deal using this process.

Follow-up here. viewtopic.php?f=11&t=124638&start=150#p3061421



05/10/ 2021 Follow-up here. viewtopic.php?f=11&t=124638&p=5998079#p5998079

First, before you negotiate you need to decide on a car, and when I mean decide, I mean make model, options and even the color and interior. You may have to flexible on color , but there's usually no difference on price for color. That means test-drive it and then leave the dealership without leaving your number, e-mail , or any contact info. The only way to get the very best deal is to deal with the internet sales department for two simple reasons. A. You can't shop around multiple dealers simultaneously when you are stuck in a showroom. B. They are always slow to respond to get "approval" from their manager for a price request because they are hoping you will get tired out and just give up. Negotiating via e-mail over a couple of days destroys their advantages.

The Negotiating Process
1. Search the dealer inventories online for the exact car you are looking for. They usually give you the VIN Number, and you can usually find the same car at 4-5 different dealerships within a 60 mile radius if you live in a decent sized metro area, if you are not asking for something really unique like a pink Aston Martin. Ask for price requests from those 5 departments through an online questionnaire. DO NOT PUT down a phone number, or if you have to, a fake one, only contact information you leave is an e-mail address, no residential or mailing address.

2. You'll get an initial contact from someone within 24 hours via e-mail once the phone line doesn't work which is the first thing they'll try. Make it clear that you will negotiate over e-mail only, are soliciting multiple dealers for the best price, and want the quotes to be the out-the-door-price which means after taxes and fees. They will need your zip code to calculate taxes so they give them that. Do not let them talk to you about financing or if you have a trade-in. Tell them you are negotiating on the price of the car only and that those things won't be discussed until you find the dealer with the best price. Do not let them lure you into a phone call or insist you come in and talk to them. Eventually, they will all let you contact them via e-mail if you insist.

3. After you get the initial prices, and insist this is an out the door price after taxes and fees, take the lowest offer and take it to Dealer #2. So this doesn't take too long, tell them you will only go with them if they beat the price of Dealer #1 by at least $300.00. Insist, no matching will be accepted. They key thing about negotiating is for you to create the rules and be firm about it. Don't sound desperate, give them at least 24 hours to respond, but usually they will respond within a few hours. If they beat the price from Dealer #1 (which on the first round they usually will, since everyone starts with a high-ball offer) take that offer to Dealer #3, and keep on rinsing till you get the price. In later stages, you may want to say they can beat the price by only going down $200.00. You know you have the best offer when other dealers back out of the deal and refuse to counter. Not always true, but usually the best deal will end up being from a high-volume dealer in your area that can take a low margin. Even though the manufacturer sells the cars to the dealers for the same price, manufacturers will give rebates to dealers who sell higher volumes.

4. When you have the best offer, keep in your hip pocket the closest offer which will probably be within $200.00 A few dishonest dealers may try to give you an excuse when you get there to buy a car that they can't do that offer anymore, or that the car is gone, but that should be rare since by now you have established yourself as a no nonsense customer. Be prepared to walk out if the offer is even $10 more than what was initially quoted, they will either back down or you go to the second dealer. This will only happen rarely.

5. FINANCING- If you are not paying cash for your car, your best pathaway is to finance through one of the national banks or credit unions, they will offer rates as good as the dealer and you are not tied to one specific dealership as the bank will give you a check you can give to any dealer. Dealers usually just take bank loans and add a markup so only focus on negotiating the price of the car with the dealer. The Finance Department of the car dealership is a pure profit center.

6.TRADE-IN , You will never get the best deal from the dealer. Either sell it private party or to a company like autodirect. This is just another profit center for the dealers.

7. Refuse all markup services like lo-jack, extended warranty, etc. These are all rip-offs that usually some people will cave into when they are tired after sitting in a showroom all day. None of them are good deals.

General Advice
*Be realistic on how much of a discount you can get below sticker price. Even with this strategy, there are certain factors out of your control. If a car is really popular, and selling like hotcakes this strategy will only bring the price down a little bit. Certain manufacturers have rebates on certain cars which will bring the price down. Your best deals usually come in Aug-October when they are bringing in the next year's model and the dealer wants to get rid of the prior year stock, especially if the design is being changed.
*Car negotiating isn't about making friends. There's a less of a chance of this happening since you are going to be dealing with people over e-mail until the end, but the dealer sees this as a pure business transaction and so should you. Dealers are pros about trying to make a fake personal connection, so you feel bad about negotiating, don't fall for it. When you walk in with the best deal, they are not going to greet you with roses since you bought the car for the bare minimum they would sell it.
Last edited by denovo on Mon May 10, 2021 1:27 pm, edited 5 times in total.
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pinecrest
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Post by pinecrest »

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Last edited by pinecrest on Mon Feb 24, 2014 4:21 pm, edited 1 time in total.
Topic Author
denovo
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Re: My New Car Buying Tips

Post by denovo »

They'll give you the run-around over the phone, heck, but that's nothing compared to how much you get worn down in the showroom when they purposely make you sit there like a lump while they have coffee and talk to their buds.

I am not against lo-jack, but I suspect you can purchase any kind of alarm or tracking system after-market for cheaper than what the dealer says. As a general rule, any add-on the dealer has usually has a markup. I remember seeing an Acura Dealer charge $100 extra for special floor mats when I say those same mats on sale on Amazon for $30.00
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ram
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Re: My New Car Buying Tips

Post by ram »

Excellent. I have done something similar, but your post is very detailed.
Ram
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denovo
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Re: My New Car Buying Tips

Post by denovo »

Sometimes market supply and demand trumps any tactic you can use. 1.5 years ago I was negotiating on a 2012 Mustang GT for a friend. That car was super-popular and there weren't that many with manual transmissions which is what he wanted. Neither of us could get a dealer to go more than a few hundred below sticker.

Last week, I was getting a 2013 Mazda3 for a family member. I got 3,950 below sticker, but to be fair that included a $2,000 customer cash incentive. The Mazda3 was redesigned for 2014.
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mike143
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Re: My New Car Buying Tips

Post by mike143 »

Here is the one I usually recommend to people: fatwallet.com: How to buy a new car, FWF style
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robertalpert
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Re: My New Car Buying Tips

Post by robertalpert »

Sounds like a great way to do it.

If you belong to a credit union with low interest rate, it is best to get financing ahead of time before you ever get the first bid. When the dealer cannot beat the credit union interest rate from his portfolio of local banks, he may offer a lower rate with manufacturer financing.
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denovo
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Re: My New Car Buying Tips

Post by denovo »

mike143 wrote:Here is the one I usually recommend to people: fatwallet.com: How to buy a new car, FWF style
Wow, this dude makes me look like a piker. 30 dealers up to 1,000 mile radius!!!!!! Some of the info seems dated, most manuf websites have quote inquiry tools that direct you straight to each dealer's fleet sales/internet sales dept. and you can usually see inventory online
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Monk53
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Re: My New Car Buying Tips

Post by Monk53 »

While you are in the process of deciding what car you want, color does matter. These days many cars have extra cost colors.
carolinaman
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Re: My New Car Buying Tips

Post by carolinaman »

Neat process. I have used online for buying a car before but not to this extent.

I used a similar process in business when making large, competitive software package purchases. It worked phenomally well. The key is no personal contact. Online/email gives you the ability to control the process. Car dealers have the advantage when there is personal contact either by phone or in person.
TheOscarGuy
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Re: My New Car Buying Tips

Post by TheOscarGuy »

Good, useful post.
denovo wrote:I've done this a couple of times, and wonder what you guys think. I think I have got the best deal using this process.

3. After you get the initial prices, and insist this is an out the door price after taxes and fees, take the lowest offer and take it to Dealer #2. So this doesn't take too long, tell them you will only go with them if they beat the price of Dealer #1 by at least $300.00. Insist, no matching will be accepted. They key thing about negotiating is for you to create the rules and be firm about it. Don't sound desperate, give them at least 24 hours to respond, but usually they will respond within a few hours. If they beat the price from Dealer #1 (which on the first round they usually will, since everyone starts with a high-ball offer) take that offer to Dealer #3, and keep on rinsing till you get the price. In later stages, you may want to say they can beat the price by only going down $200.00. You know you have the best offer when other dealers back out of the deal and refuse to counter. Not always true, but usually the best deal will end up being from a high-volume dealer in your area that can take a low margin. Even though the manufacturer sells the cars to the dealers for the same price, manufacturers will give rebates to dealers who sell higher volumes.
I am curious: what does dealer # 2 think when you have said "you will only go with them if they beat the price of Dealer # 1" and they actually did, especially at the beginning of the negotiations? I imagine this happens a lot at the start, when the initial price is way higher than the final price of the car. How do you get away with not pissing off Dealer # 2 since potentially you will come back to him in the next round?
5. FINANCING- If you are not paying cash for your car, your best pathaway is to finance through one of the national banks or credit unions, they will offer rates as good as the dealer and you are not tied to one specific dealership as the bank will give you a check you can give to any dealer. Dealers usually just take bank loans and add a markup so only focus on negotiating the price of the car with the dealer. The Finance Department of the car dealership is a pure profit center.
What if the total price that *I pay* for the car is less with Dealer financing, compared to any other national bank or credit unions? Worst, what if the total price with Dealer financing is the better deal, even though car price-wise its not? Won't I miss out on those if I insist that Dealers not offer me financing, and that I will go with my own bank?
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coachz
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Re: My New Car Buying Tips

Post by coachz »

Typically this will work up to Dealer #2 at which point they will say, "If we beat the price by $300 are you ready to buy the car now?". They will LITERALLY make you sign an offer document that you are ready to buy. The Dealers are not stupid and will match prices only so far up to the point where you show you are seriously ready to buy. They have litle incentive to sharpen their pencils if there is not a LIVE customer there. I just bought a 2013 Murano and did the same thing. Good Luck.
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Go Blue 99
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Re: My New Car Buying Tips

Post by Go Blue 99 »

Thanks for tips- this is useful as we are buying a new car in the next 3-4 months.

Question- I have a specific car that is at the top of the list, and I know the exact options and colors I would get (flexible on color). However, we have not test driven it yet so obviously need to do that before we make a decision. There is a specific dealership I'd like to work with because it is only 3 miles from our house, and they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).

Would it be okay if I go in and work with a salesman there to do the test drive, but then ultimately use their Internet Sales to make the purchase? Or should I contact Internet Sales before I visit? Or maybe I should visit a completely different dealership for the test drive? Also, how do you get out of there without leaving any personal info?
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1210sda
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Re: My New Car Buying Tips

Post by 1210sda »

Excellent post Denovo.

Here are a couple of things that I've done in the past.

1. We have a local "one low price" dealer. These people don't negotiate, believe me I've tried. Their benefit is that they provide a ceiling price from which to negotiate down at other dealers.

2. If there are not enough local dealers to create competition, I am willing to drive 75 miles to other dealers. I call them and tell them ahead of time what the "one low price" is and that they need to make an offer low enough to justify my driving 75 miles. I tell them I am fully prepared to walk away if they don't honor the price they quoted over the phone. (and I am prepared to do so).

3. Prior to all this, I can go to CarMax and get the price for my trade-in in writing. This sets the floor as to what I will accept for my trade from the eventual seller of my new car. (keep in mind the sales tax advantage of trading in to the selling dealer)

4. I try to remember General von Clausewitz's comment........the biggest enemy of a good plan is the dream of a perfect plan.....

1210
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Hector
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Re: My New Car Buying Tips

Post by Hector »

Go Blue 99 wrote:Thanks for tips- this is useful as we are buying a new car in the next 3-4 months.

Question- I have a specific car that is at the top of the list, and I know the exact options and colors I would get (flexible on color). However, we have not test driven it yet so obviously need to do that before we make a decision. There is a specific dealership I'd like to work with because it is only 3 miles from our house, and they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).

Would it be okay if I go in and work with a salesman there to do the test drive, but then ultimately use their Internet Sales to make the purchase? Or should I contact Internet Sales before I visit? Or maybe I should visit a completely different dealership for the test drive? Also, how do you get out of there without leaving any personal info?
I would work with salesman. If I don't get the quote I am looking for, I would ask him to match internet offer at least. You might get better deal compare to online. If not, you would at least not pay more than what you would pay online. On the plus side, salesman would get commission.
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denovo
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Re: My New Car Buying Tips

Post by denovo »

Go Blue 99 wrote:=

Would it be okay if I go in and work with a salesman there to do the test drive, but then ultimately use their Internet Sales to make the purchase? Or should I contact Internet Sales before I visit? Or maybe I should visit a completely different dealership for the test drive? Also, how do you get out of there without leaving any personal info?
Just do it! Tell them you're still thinking about which car to purchase and if they insist on further communication, tell them you'll take their business card!
"Don't trust everything you read on the Internet"- Abraham Lincoln
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denovo
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Re: My New Car Buying Tips

Post by denovo »

coachz wrote:Typically this will work up to Dealer #2 at which point they will say, "If we beat the price by $300 are you ready to buy the car now?". They will LITERALLY make you sign an offer document that you are ready to buy. The Dealers are not stupid and will match prices only so far up to the point where you show you are seriously ready to buy. They have litle incentive to sharpen their pencils if there is not a LIVE customer there. I just bought a 2013 Murano and did the same thing. Good Luck.
I haven't found this true in my experience, but ymmv. "If we beat the price by $300 are you ready to buy the car now?" They can't make me sign anything if this is a quote via the internet and more importantly, if anyone told me that, I'd simply tell them they'd need to beat the price to a degree that no one else could beat it, not just $300.00. It's nice sales tactic you can easily deflect. You need to make it clear you are searching for the lowest price possible on the car and will not accept a penny more. They will come back at with you with multiple offers. The dealer I ended up purchasing from started at 19,924, then made a bid at 19, 474, and then the final price of 18,921.
I don't expect they are going to be pissed off, once they come to the realization you are viewing this is as a pure business transaction.*

As for financing, in my experience if there's a promotional loan rate like 0 APR, it comes from the manufacturer, so you should shop around purely on price first.

*I've found the following e-mail sent through through the main site requesting multiple dealer quotes gets the right message across
"I am looking to purchase this car, specifically VIN XXXX on your lot. I am soliciting multiple dealers for the best price. My zip is xxxxx. Please submit your very best bid OTD for this car. This negotiation will take place entirely through e-mail, and I will not be coming in to the dealer to discuss the price or making any phone calls. --"

Here is an typical e-mail you get in the beginning trying to muddy the waters and how I responded to set the tone, notice #1 is to try to obfuscate the price they are offering, 2 is try to lure you in and make a personal connection, 3 is so they can make more money by giving you a low-ball offer on your trade-in and making the car price sound cheaper, because you bet when they quote you they'll emphasize the price after deduction, 4 is just 2 repackaged, 5 is another way of doing 2.
Thank you for contacting XXXXX Mazda. The Mazda MAZDA3 4-Door you have inquired about is a wonderful vehicle. I would like to confirm a few details in order to get you the most accurate information on the Mazda MAZDA3 4-Door and save you time and money.

Please reply with an answer to the appropriate questions below that you feel will help me serve you better:

"1.Would you like pricing with various finance and lease term estimates?
2.Have you test-driven the Mazda MAZDA3 4-Door you are inquiring about? If available, would you like to take a special 48-hour test-drive?

3.Are you replacing or trading a vehicle? If so, what vehicle?

4.Although I can serve you online, I would like to invite you to visit our award winning dealership. When would be convenient for you to visit?

5.What number is the best to call or text you to confirm a few details (if necessary), in order to save you time?
AND...
ME, straight to the point
1. no
2. yes, i don't want a 48 hour test drive
3.no
4. absolutely not
5. out of the question
Now please give me your OTD price as I have already received bids from other dealers
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doug4523
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Re: My New Car Buying Tips

Post by doug4523 »

I used a strategy very similar to the OP, except I didn't need to get to the part where I asked other dealers to beat a certain price. I think before you start sending out those emails, it would be a great idea to try and find out what others are paying. In my case, I was buying a 2014 Subaru Forester. Subaru has a 2% off of invoice VIP program that prevents any need for negotiating for those that hate it. I did not belong to one of the participating associations, but I had read on the Subaru forum that many people were able to get dealerships to give them the 2% off invoice pricing anyway. Some were even able to get lower by using the same strategy as the OP.

So when I went to start the emailing process, I set my target price at 2% under invoice. You can easily check what the invoice is by going to Edmunds. I was hoping I wouldn't have to actually join one of the organizations to get the 2%. I emailed 6 dealerships in the area. All but one responded within 24 hours. Unfortunately the prices were not as low as I was hoping. One came in at MSRP, another at $500 over invoice, and a couple more right around invoice. The best offer I got the first day was $160 off invoice (less than 1%). The next day I emailed the dealership that hadn't given me a quote and asked again. They responded in an hour or so at $1,180 under invoice (over 5%)!!! I didn't question the quote, but said I was interested in purchasing. Long story short after a couple emails back and forth, I think they realized they quoted me wrong and said that I couldn't wait until a few days from then when I wanted to pick it up. They said the car would be gone by the weekend (I believed them because multiple dealerships had said they can't keep the forester in stock). If I wanted the car I had to basically go straight there to sign the papers. When I got there and was signing, the director of sales came up to me and said "If you have been shopping around for prices I'm sure you know this was exceptionally low. Our internet sales associate made a mistake with your quote, but I'm a nice guy and honored it anyway." The internet associate was gone for the day... hope she didn't get in too much trouble.

I know that they still made money on me because of incentives/rebates, but I feel like I got a great deal at 5.2% under invoice. The other dealers weren't even close to that. If I hadn't researched what other people were paying for Subaru Foresters, I think I may have tried to negotiate with the other dealerships to see if they could beat it. In the process, I could have lost out on the deal I took and been back to 1% under instead because my quote wasn't actually accurate. As always, knowledge is power.
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coachz
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Re: My New Car Buying Tips

Post by coachz »

At some point many dealers will insist that you come in if you want the best price. At least they do that in my area.
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Easy solution

Post by davebarnes »

Go Blue 99 wrote:they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).?
Me too. Here is what I do and have done for the last 4 cars purchased.
The sales guy hands you the contract to sign.
You add "Dealer agrees to not attach any dealer insignia or decals to any part of the car. If an insignia/decal is attached, dealer agrees to remove it and repair any damage to the car."
They hate this. But, they will agree.
One dealer who signed this and then attached a screw-on insignia had to remove it AND send the car to the body shop to fill in and paint the 2 small holes.
A nerd living in Denver
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denovo
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Re: Easy solution

Post by denovo »

davebarnes wrote:
Go Blue 99 wrote:they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).?
Me too. Here is what I do and have done for the last 4 cars purchased.
The sales guy hands you the contract to sign.
You add "Dealer agrees to not attach any dealer insignia or decals to any part of the car. If an insignia/decal is attached, dealer agrees to remove it and repair any damage to the car."
They hate this. But, they will agree.
One dealer who signed this and then attached a screw-on insignia had to remove it AND send the car to the body shop to fill in and paint the 2 small holes.
Maybe I am reading this wrong or there are different laws in different states, but In California the only thing I have eve seen is that the frame around the license says Volkswagen Manhattan etc , and you can easily buy your own frame.
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stoptothink
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Re: Easy solution

Post by stoptothink »

denovo wrote:
davebarnes wrote:
Go Blue 99 wrote:they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).?
Me too. Here is what I do and have done for the last 4 cars purchased.
The sales guy hands you the contract to sign.
You add "Dealer agrees to not attach any dealer insignia or decals to any part of the car. If an insignia/decal is attached, dealer agrees to remove it and repair any damage to the car."
They hate this. But, they will agree.
One dealer who signed this and then attached a screw-on insignia had to remove it AND send the car to the body shop to fill in and paint the 2 small holes.
Maybe I am reading this wrong or there are different laws in different states, but In California the only thing I have eve seen is that the frame around the license says Volkswagen Manhattan etc , and you can easily buy your own frame.
I don't think it has anything to do with state law, numerous dealerships do this, including ones in California (at least they did ~10yrs ago when I last purchased a car in that state).
S&L1940
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Re: My New Car Buying Tips

Post by S&L1940 »

Thanks, Great thread.
You realize that this process can be applied to other major purchases that we do several times in our lifetime.
The one that comes to mind is the purchase of a mattress (we seem to buy one every 10-15 years) that has been discussed several times on BH.Org.
We buy a car every 5-8 years and have also leased. Whether by email, in person or by phone, we are out gunned because we may negotiate 10(?) times in our lifetime, but the dealer does this 10 times a day - every day... The dealer knows we hate the process and employs a "wear them down" strategy hoping we will just give in to get the process over with.

We have walked out of dealers - taking back the check we had already wrote - when they started with the add-ons to what was originally quoted as an out the door price. Using email up to the point when the deal is ready to close saves lots of time and effort and preserves our sanity..
Don't it always seem to go * That you don't know what you've got * Till it's gone
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Go Blue 99
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Re: Easy solution

Post by Go Blue 99 »

denovo wrote:
davebarnes wrote:
Go Blue 99 wrote:they are one of the few local dealerships that doesn't affix a dealer logo to the back of the car (I absolutely hate this).?
Me too. Here is what I do and have done for the last 4 cars purchased.
The sales guy hands you the contract to sign.
You add "Dealer agrees to not attach any dealer insignia or decals to any part of the car. If an insignia/decal is attached, dealer agrees to remove it and repair any damage to the car."
They hate this. But, they will agree.
One dealer who signed this and then attached a screw-on insignia had to remove it AND send the car to the body shop to fill in and paint the 2 small holes.
Maybe I am reading this wrong or there are different laws in different states, but In California the only thing I have eve seen is that the frame around the license says Volkswagen Manhattan etc , and you can easily buy your own frame.
The dealer frame is acceptable, because I can remove that in less than a minute. But most car dealers in my city attach some kind of sticker with the dealer name on it to the back of the car. Some of the designs are pretty ugly, and I've seen multiple examples where they are slanted or tilted. I really feel like it detracts from a good looking rear, and obviously the dealer is not paying you any type of advertising fee.
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Dutch
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Re: My New Car Buying Tips

Post by Dutch »

Hector wrote:I would work with salesman. If I don't get the quote I am looking for, I would ask him to match internet offer at least. You might get better deal compare to online. If not, you would at least not pay more than what you would pay online. On the plus side, salesman would get commission.
You never get a better deal working with the salesman.

The key is not to step foot in the dealership (other than for a test drive or to pick up the car you bought)
Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

A couple of thoughts. First of all, is it absolutely necessary or even worth the hassle of getting the absolute lowest price possible? I'm OK with getting merely "a good price". I'll do my internet research and shop 2-3 dealers. If the dealer who has the car I want comes close enough, I'm ok with him making an extra $500 versus if I went into "grind" mode. Also a closer dealer is worth more to me. If I can get them as low as a further dealer even better but if not I'm ok with paying a little more for the convenience.

Second, I also don't like dealer advertising on my cars. I always tell them not to put any on. Generally the license plate holder is no problem because it's not yet on the car but most cars do have "colorforms" decals. But they easily peel off by them or by me. It's not a big deal. (I will say that I won't buy a car with a front license plate holder however. There is no front plate in PA and sometimes dealers trade to Ohio and they have olders that are always installed with self tapping screws)
guitarguy
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Re: My New Car Buying Tips

Post by guitarguy »

Here's a question I've wondered about...

How much is a reasonable target to shoot for below sticker price of a car? And I mean OTD price.

Say a car sticker price is $X. Is it reasonable to shoot for 5% less (including all taxes and fees, etc) than X? 1% ? 10% ?

What constitutes a "good price" in people's minds?
Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

guitarguy wrote:Here's a question I've wondered about...

How much is a reasonable target to shoot for below sticker price of a car? And I mean OTD price.

Say a car sticker price is $X. Is it reasonable to shoot for 5% less (including all taxes and fees, etc) than X? 1% ? 10% ?

What constitutes a "good price" in people's minds?
Somewhat the wrong question. The right question should be how much OVER invoice. EDMUNDS.COM is the place where they show you invoice, sticker and what's a "fair market price". Some here will argue that they can do a lot better than Edmunds and with some serious shopping and "grinding", they probably can. The answer to how much over invoice varies from model to model and ebbs and flows with supply and demand. Generally I try to get the Edmunds fair market price and can do so without too much haggling and am satisfied. If I left too much on the table, so be it.
AdamFist
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Re: My New Car Buying Tips

Post by AdamFist »

guitarguy wrote:Here's a question I've wondered about...

How much is a reasonable target to shoot for below sticker price of a car? And I mean OTD price.

Say a car sticker price is $X. Is it reasonable to shoot for 5% less (including all taxes and fees, etc) than X? 1% ? 10% ?

What constitutes a "good price" in people's minds?
This depends on the vehicle, demand, incentives and dealer. I've read from various sources that dealers and manufacturers know the public still perceives Invoice price as dealer cost, which is no longer the case. If you have time to research, go to your target vehicle's forum on Edmunds.com and another active forum community. If you search going back a year, you should get an idea of what the market is at various times of the year based on what buyers claimed.
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Aptenodytes
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Re: My New Car Buying Tips

Post by Aptenodytes »

The last time I bought a new car I paid a modest amount for a Consumer Reports report that provided information about actual prices paid by consumers for the exact car model I was about to buy. They provided very complete information, essentially a full histogram of reported purchase prices. That gave me a very clear sense of where the floor was, which in turn was invaluable in calibrating my version of the OP's approach. Once I got to that floor, I knew the marginal returns were essentially zero and I picked up the car.

In the past I've used the free services that give you dealer costs, but with all the creative bookkeeping that goes on in the car industry I've found those less useful than summaries of actual purchase prices. Under some circumstances everyone can buy below dealer cost, and under others everyone has to pay a premium, even the skilled negotiators.
fourwaystreet
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Re: My New Car Buying Tips

Post by fourwaystreet »

Some of this seems like to much work to me. I do the appropriate research, visit the dealership on a Sunday when it is closed because less face it a vehicle may look nice in a picture but not in person. I go back to the dealership in the next day or two indicating which vehicle I am considering purchasing. When I purchased vehicles it has taken as little as 30 minutes. I have a walk away price that I have totally stuck to with one exception when we were $200 apart in that case we just split the difference. I can not see driving distances to other dealerships, that takes time and money and I consider my time as valuable.
When someone you love becomes a memory, the memory becomes a treasure.
Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

fourwaystreet wrote:Some of this seems like to much work to me. I do the appropriate research, visit the dealership on a Sunday when it is closed because less face it a vehicle may look nice in a picture but not in person. I go back to the dealership in the next day or two indicating which vehicle I am considering purchasing. When I purchased vehicles it has taken as little as 30 minutes. I have a walk away price that I have totally stuck to with one exception when we were $200 apart in that case we just split the difference. I can not see driving distances to other dealerships, that takes time and money and I consider my time as valuable.
+1. Especially on the "visit when closed" thing.
CoastRider
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Re: My New Car Buying Tips

Post by CoastRider »

I'm not so sure about asking for the "out-the-door" price. I've learned that perhaps getting a detailed list of all the fees, is much better. Many people don't realize that you can negotiate these various dealer fees, such as:

"Dealer Prep." ($500 for a car wash and to put the floor mats in?!) I get that down to $100 or $200.
"Transportation Fee." ($200 to $500) Some will not budge on this, but try anyway.
"Documentation Fee." (Usually $500 for the guy to hit a few keystrokes on a computer, and print out the paperwork.) Ridiculous! $200, tops.

Of course, getting an out-the-door price will save time. But I don't mind spending a couple of hours at the dealer, and working the best deal possible. The salesman brings me the detailed list, and I use my red pen and change the fees (and vehicle price) to what I think is more reasonable. And I agree with the other poster: I never buy the extended 5-yr warranty. You think you are getting an extra 5 years, in addition to the factory warranty, but in reality that extended warranty begins at day one.
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denovo
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Re: My New Car Buying Tips

Post by denovo »

guitarguy wrote:Here's a question I've wondered about...

How much is a reasonable target to shoot for below sticker price of a car? And I mean OTD price.

Say a car sticker price is $X. Is it reasonable to shoot for 5% less (including all taxes and fees, etc) than X? 1% ? 10% ?

What constitutes a "good price" in people's minds?
It depends a lot on supply and demand. TrueCar and Edmunds can give you a general idea based on what prices others have paid and the "invoice" price, but no pin-point precision. Invoice is kind of a useless term now. Invoice used to refer to the price the dealer paid for the car. But that's not accurate because of something called hold back and other blackbox incentives between the dealer and manufacturer that you are not always aware of. Someone earlier mentioned that Subaru has a promotion to sell 2 percent below invoice, if we took invoice to literally mean price dealer paid, that would mean the dealer is losing money on every sale which is laughable!
Dealer holdback is designed to supplement the dealer's cash flow and indirectly reduce "variable sales expenses" (another way of saying "sales commissions") by artificially elevating the dealership's paper cost. The holdback is a percentage of either the manufacturer's suggested retail price (MSRP) or invoice price of a new vehicle that the manufacturer repays to the dealer.

Some car buyers try to use dealer holdback to calculate the net price of a vehicle to the dealer, with the intention of using that amount as a basis for negotiating a rock-bottom price.

However, determining the dealer's actual net cost is difficult, even for seasoned automotive insiders. Instead, it's better to focus on tangible numbers like the Edmunds.com True Market Value (TMV®), which is an average of what other people are paying for a car in a given area.
http://www.edmunds.com/car-buying/dealer-holdback/
"Don't trust everything you read on the Internet"- Abraham Lincoln
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denovo
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Re: My New Car Buying Tips

Post by denovo »

Leesbro63 wrote:
fourwaystreet wrote:Some of this seems like to much work to me. I do the appropriate research, visit the dealership on a Sunday when it is closed because less face it a vehicle may look nice in a picture but not in person. I go back to the dealership in the next day or two indicating which vehicle I am considering purchasing. When I purchased vehicles it has taken as little as 30 minutes. I have a walk away price that I have totally stuck to with one exception when we were $200 apart in that case we just split the difference. I can not see driving distances to other dealerships, that takes time and money and I consider my time as valuable.
+1. Especially on the "visit when closed" thing.
To each his own, everyone has their own financial circumstances and cost/benefit utility curves. But for those who buy new cars every 5-10 years, this will be probably be the 2nd most expensive transaction they make in their lifetimes, outside of a home purchase. A couple of e-mails sent over a couple of days to save 1 grand on a 20k car, or more like 3-4k on say a 50k car seems like pretty good bang for the buck.
"Don't trust everything you read on the Internet"- Abraham Lincoln
S&L1940
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Re: My New Car Buying Tips

Post by S&L1940 »

Leesbro63 wrote:
fourwaystreet wrote:Some of this seems like to much work to me. I do the appropriate research, visit the dealership on a Sunday when it is closed because less face it a vehicle may look nice in a picture but not in person. I go back to the dealership in the next day or two indicating which vehicle I am considering purchasing. When I purchased vehicles it has taken as little as 30 minutes. I have a walk away price that I have totally stuck to with one exception when we were $200 apart in that case we just split the difference. I can not see driving distances to other dealerships, that takes time and money and I consider my time as valuable.
+1. Especially on the "visit when closed" thing.
In south Florida these guys are open every day
Don't it always seem to go * That you don't know what you've got * Till it's gone
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lthenderson
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Re: My New Car Buying Tips

Post by lthenderson »

Haggling is a part of car buying but going to these extremes guarantees you several things because you don't develop a relationship with the dealer.

1. He is not going to go out of his way to help you out when your car needs warranty work done. Loyal customers always get theirs done first.

2. I live in a rural area and they don't stock as many vehicles to choose from. By developing a relationship and perhaps not haggling him down to the last dime, the dealer is willing to call me when he gets in his new shipment and give me first crack at the vehicle I want.

3. The dealer will also be more inclined to help you with odd requests, trades, situations, throw in some extras, etc because he knows you and you've been a good customer.

4. You won't develop a relationship with a dealer. He is human and needs to make a living. My dealer comes and hunts on my property every fall and always leaves me some of his meat and other goods as a token of our relationship. I still haggle with him when I go to get my next vehicle but if he gets a couple hundred extra bucks that I might have 'saved' had I gone to these extremes, I am a richer person for it.
S&L1940
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Re: My New Car Buying Tips

Post by S&L1940 »

lthenderson wrote:Haggling is a part of car buying but going to these extremes guarantees you several things because you don't develop a relationship with the dealer.

1. He is not going to go out of his way to help you out when your car needs warranty work done. Loyal customers always get theirs done first.

2. I live in a rural area and they don't stock as many vehicles to choose from. By developing a relationship and perhaps not haggling him down to the last dime, the dealer is willing to call me when he gets in his new shipment and give me first crack at the vehicle I want.

3. The dealer will also be more inclined to help you with odd requests, trades, situations, throw in some extras, etc because he knows you and you've been a good customer.

4. You won't develop a relationship with a dealer. He is human and needs to make a living. My dealer comes and hunts on my property every fall and always leaves me some of his meat and other goods as a token of our relationship. I still haggle with him when I go to get my next vehicle but if he gets a couple hundred extra bucks that I might have 'saved' had I gone to these extremes, I am a richer person for it.
Not where we live. We have purchased three cars in Florida (one, sadly, got destroyed) and there has not been any contact with the sales people once we closed the deal. Ever. Same lack of a relationship up north in metro NY area. The only value we had developed was in working with the service manager who I believe had no idea what our purchase process and the level of haggling was. I even switched dealers for service and the original dealer showed no concern when I stopped working with them. There was no drop of service performance from the people who did not sell me the car.
Maybe it is an urban vs. rural mindset and business model...
Don't it always seem to go * That you don't know what you've got * Till it's gone
Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

I also have noticed that buying a car has morphed from being a relationship to being a transaction. And I prefer it that way. I don't want a new friend. Give me a good deal, do whatever it takes to complete the transaction paperwork and deliver the car properly, and have a good life! If I want a new friend, I'll join the Kiwanis Club.

EDIT: My father used to always buy a car from "my man". There were a few "my mans" over the years. He always thought they were his friends. I guess he wanted to believe that. They weren't.
placeholder
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Re: My New Car Buying Tips

Post by placeholder »

lthenderson wrote:2. I live in a rural area and they don't stock as many vehicles to choose from. By developing a relationship and perhaps not haggling him down to the last dime, the dealer is willing to call me when he gets in his new shipment and give me first crack at the vehicle I want.
What, are you buying a new car every month?
kirent
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Re: My New Car Buying Tips

Post by kirent »

Way too much work. For popular models, just go online and see what people have bragged about getting their car for in your area, and then just go to the same dealer and get the same price (sometimes they might say no though). You can email other dealers with the price, but I doubt you'd get a better one without significantly more effort.
Disclaimer: I am not a financial or legal expert and all information I provide is given for entertainment purposes only, at your own risk and with no guarantees of accuracy.
jlawrence01
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Re: My New Car Buying Tips

Post by jlawrence01 »

lthenderson wrote:Haggling is a part of car buying but going to these extremes guarantees you several things because you don't develop a relationship with the dealer.

1. He is not going to go out of his way to help you out when your car needs warranty work done. Loyal customers always get theirs done first.

2. I live in a rural area and they don't stock as many vehicles to choose from. By developing a relationship and perhaps not haggling him down to the last dime, the dealer is willing to call me when he gets in his new shipment and give me first crack at the vehicle I want.

3. The dealer will also be more inclined to help you with odd requests, trades, situations, throw in some extras, etc because he knows you and you've been a good customer.

4. You won't develop a relationship with a dealer. He is human and needs to make a living. My dealer comes and hunts on my property every fall and always leaves me some of his meat and other goods as a token of our relationship. I still haggle with him when I go to get my next vehicle but if he gets a couple hundred extra bucks that I might have 'saved' had I gone to these extremes, I am a richer person for it.

Those are all accurate. When I was a fleet manager, I always insisted on the leasing companies delivering through the LOCAL dealership. Some dealerships do NOT do warranty service on vehicles they do not sell or make it very inconvenient. They are not SUPPOSED to do that but they will.
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Watty
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Re: My New Car Buying Tips

Post by Watty »

One thing that would help you get the best deal is to say flexible in your choice of car model for as long as possible. For example you might want to shop for both a Corolla and a comparable Civic at that same time since one might be in short supply while there could be a surplus of the other. Being open to several acceptable colors can also help you find a good deal.
Diogenes
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Re: My New Car Buying Tips

Post by Diogenes »

jlawrence01 wrote:
lthenderson wrote:Haggling is a part of car buying but going to these extremes guarantees you several things because you don't develop a relationship with the dealer.

1. He is not going to go out of his way to help you out when your car needs warranty work done. Loyal customers always get theirs done first.

2. I live in a rural area and they don't stock as many vehicles to choose from. By developing a relationship and perhaps not haggling him down to the last dime, the dealer is willing to call me when he gets in his new shipment and give me first crack at the vehicle I want.

3. The dealer will also be more inclined to help you with odd requests, trades, situations, throw in some extras, etc because he knows you and you've been a good customer.

4. You won't develop a relationship with a dealer. He is human and needs to make a living. My dealer comes and hunts on my property every fall and always leaves me some of his meat and other goods as a token of our relationship. I still haggle with him when I go to get my next vehicle but if he gets a couple hundred extra bucks that I might have 'saved' had I gone to these extremes, I am a richer person for it.

Those are all accurate. When I was a fleet manager, I always insisted on the leasing companies delivering through the LOCAL dealership. Some dealerships do NOT do warranty service on vehicles they do not sell or make it very inconvenient. They are not SUPPOSED to do that but they will.
Never run into that, and I would be surprised if that really happens, especially considering how mobile folks are these days. If I detected that with one of our vehicles, I am confident a call to the manufacturer would take care of the problem. I could research it but am sure that is also illegal. Not a good reason to overpay for a large ticket item. These days a car salesman is not very useful to a sophisticated buyer who should already have the facts from other sources. It's an old model. A Dealer should ensure he is making money or no deal. However a Dealer should not be entitled to a windfall merely because someone can perhaps be fooled by grossly inflated add-ons or other trickery.
Competition is a great thing.
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lthenderson
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Re: My New Car Buying Tips

Post by lthenderson »

placeholder wrote:What, are you buying a new car every month?
No but I have bought many cars over a 20 year span for two people. When I'm ready to buy, I just let the dealer know what I'm looking for if it isn't on the lot and he gives me a call usually before it arrives and tells me to come on down. Out here in rural America, if you are looking for a different color than black or gray or special features, you have to be quick or its sold and off the lot.
marc515
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Re: My New Car Buying Tips

Post by marc515 »

Bottom line here as I see it is to:

1. Find the vehicle you want. Take a picture of the sticker, or write everything down so you can accurately obtain the "Invoice" price.
2. Forget the "Sticker" price; you do not need to waste time negotiating with the sticker price.
3. Go to KBB.com or Edmunds to get the "Invoice" price- Do not pay any attention to the Fair purchase price ; you are only concerned with the Invoice price.
4. Work the best deal you can get "under" the Invoice price. Depending on how you work it, you may want to add in a dealer item or two, or lifetime oil changes, etc. But you can always buy a vehicle for less than the invoice. Our last vehicle we purchased for about $250 under the invoice, plus we had them install a dealer item at no cost.
5. Do not attempt to negotiate payments or trades until you agree on the "Less than Invoice Price" of the vehicle. If you give them a payment figure before negotiating the "Less than Invoice Price", they'll get you the vehicle for that figure, but you will most likely pay more for the vehicle. Same with the trade; do not negotiate your trade until you agree on the "Less than Invoice Price", that way you'll know exactly what you are getting for your trade.

I don't think it's any more complicated than that.
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Dutch
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Re: My New Car Buying Tips

Post by Dutch »

marc515 wrote:Bottom line here as I see it is to:

1. Find the vehicle you want. Take a picture of the sticker, or write everything down so you can accurately obtain the "Invoice" price.
2. Forget the "Sticker" price; you do not need to waste time negotiating with the sticker price.
3. Go to KBB.com or Edmunds to get the "Invoice" price- Do not pay any attention to the Fair purchase price ; you are only concerned with the Invoice price.
4. Work the best deal you can get "under" the Invoice price. Depending on how you work it, you may want to add in a dealer item or two, or lifetime oil changes, etc. But you can always buy a vehicle for less than the invoice. Our last vehicle we purchased for about $250 under the invoice, plus we had them install a dealer item at no cost.
5. Do not attempt to negotiate payments or trades until you agree on the "Less than Invoice Price" of the vehicle. If you give them a payment figure before negotiating the "Less than Invoice Price", they'll get you the vehicle for that figure, but you will most likely pay more for the vehicle. Same with the trade; do not negotiate your trade until you agree on the "Less than Invoice Price", that way you'll know exactly what you are getting for your trade.

I don't think it's any more complicated than that.
This will work if your only objective is to get "less-than-invoice price"

I don't see how this will get you the best price
Atilla
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Re: My New Car Buying Tips

Post by Atilla »

For a short time out of college I was a new car salesman - this was in 1991. No internet.

The problem back then was most buyers knew they didn't have to pay full sticker, but there was no easily available info on invoice pricing or what other buyers paid. So the buyer had to be much more subjective on what was a "fair" price.

The practical effect was this: Customer asks for a "best" or "bottom line" price. As a salesman you knew the moment you quoted a price (the sales manager actually did all pricing - the salesman was just the messenger) you would lose the sale...because once you quoted a price the customer would "have to talk to the wife" or "had an appointment". Said customer would then immediately proceed to the dealer across town who would happily beat your deal by $500 and get the sale with no effort.

So the trick was to get the buyer to agree to buy before the price was settled. Try doing THAT for a living. Throw in a trade-in and multiply the f-factor by 10X.

I lasted one summer doing that; but I made decent money and learned a lot. One lesson was that the customer was many times the bigger liar. :beer True.
marc515
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Re: My New Car Buying Tips

Post by marc515 »

[quote="Dutch"quote]

This will work if your only objective is to get "less-than-invoice price"

I don't see how this will get you the best price[/quote][/quote]

Well, my objective "iS" to buy a vehicle under invoice price, and as far under invoice as I can.

How far under invoice one negotiates is based on many variables to include the specific vehicle, availability, market conditions, dealer competition, and how much work the consumer is willing to do to get the best price.

The OP provided some great insight, and the only thing I think he should consider is to start the negotiations from the invoice price not the sticker price. And I also agree with the OP in that selling outright is usually far better than trading; I have sold all my vehicles outright.

Maybe you could provide a specific question or two instead of "I don't see how this will get you the best price" so others could provide some more suggestions.
Last edited by marc515 on Fri Oct 18, 2013 6:58 am, edited 1 time in total.
l2ridehd
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Re: My New Car Buying Tips

Post by l2ridehd »

This process works great when buying new. I used it with great success buying my Toyota Tacoma.

For cars I usually buy certified used so the process needs to be a bit different. I like Mercedes so I find dealerships within about a 150 plus mile radius which gives me a dozen or so to work with. I do the online search until I find four or 5 cars that work for me. I just purchased a 2013 E 350 with 10,000 miles and used a process very close to your new car process. The main difference is you can't do exact comparisons because each car has a few variables. Like mileage, options, warranty, and even finance differences. So first step is to identify 4 or 5 cars that work. Do a kbb price check using the wholesale price. Get the car fax for each car so you can eliminate any with other then minor damage, but more important is to determine how long the dealer has had this car. The car fax lists all ownership transfer dates.

1. Start with the one that has been on the lot the longest. They are getting ready to send it to auction if it has been there a couple months and they will sell at wholesale or below.
2. Get the best internet price from their internet sales department for each car. (also out the door price)
3. Determine what you will pay for the specific car that is the current best deal and make the offer in person at the dealership.
4. Offer to pay cash or to use the dealers finance only if they will match your best available interest rate. Finance is a profit center and you can pay it off the next day if you want. But they will usually sell at a lower price if you will finance through them.
5. Tell them your offer is final and you have 5 cars you have selected and if they don't accept your offer you will move to car number two on your list.
6. They will usually have the manager come out and say they can't meet you price but for just $XXX more they will do it.
7. Be ready to walk and tell them your price is final.
8. Continue on until you get the car and price you want.

Using this process I bought the loaded 2013 certified used E 350 with 10,000 miles for $6500 under kbb wholesale price. I was shocked they took my offer when I got up to leave.

One other point to consider in buying a used car. I don't rule out a car with a car fax damage report if the damage is listed as minor. Car fax uses several ratings and minor means under $1000 damage. Which at todays prices is almost nothing. Without a clean car fax dealers will really deal. One car on my list, not the one I bought, had minor car fax damage report. It was that the front lower "honeycomb" grill was broken and had to be replaced. I would have used this as a strong discount point, but I would have accepted that car if the price I offered was not rejected.
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