My New Car Buying Tips

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denovo
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Re: Invoice is the new MSRP

Post by denovo »

sunny_socal wrote:I bought a new car today! 2015 Honda Accord Sport w/ 6 speed MT. :mrgreen:
Congrats and I am happy this worked out. Some people have been recently claiming that truecar is the best price most people will give and that dealers will not give pricing online. I thought they were misinformed and this proves it.
"Don't trust everything you read on the Internet"- Abraham Lincoln
tj
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Re: Invoice is the new MSRP

Post by tj »

denovo wrote:
sunny_socal wrote:I bought a new car today! 2015 Honda Accord Sport w/ 6 speed MT. :mrgreen:
Congrats and I am happy this worked out. Some people have been recently claiming that truecar is the best price most people will give and that dealers will not give pricing online. I thought they were misinformed and this proves it.

TrueCar is the highest price you should pay, certainly not the lowest.
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sunny_socal
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Re: Invoice is the new MSRP

Post by sunny_socal »

tj wrote:
TrueCar is the highest price you should pay, certainly not the lowest.
Absolutely. Even showroom salesmen will give the Truecar price without batting an eye since they know they're still making thousands at that price. :| I've been preaching "shop through the web" to everyone at work.

Once I had my final quote in hand ($2k below invoice) I visited my closest dealer to see if they could match it. They were very interested at first and sat me down with water & chocolate chip cookies, but finally came back and said "sorry, we are miles apart on the price." (Went with the other dealer of course.) It seems there are vast differences between dealers and their manufacturer kickbacks.
MoneyIsntEverything
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Re: My New Car Buying Tips

Post by MoneyIsntEverything »

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likegarden
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Re: My New Car Buying Tips

Post by likegarden »

We used a similar way to buy a new car as the OP showed. We first educated ourselves, because we buy new cars only every 11 years or so. We also used 'Fighting Chance'. We got some idea about models, options and prices from Edmunds. We bought Consumer Reports and looked at maintenance costs. We did not do a trade-in, I sold it via Craigs List, had no problems, but was another hassle. I like that a person in this thread used Carmax, should try this next time.

I made tables of various models showing all the features we were interested in, also interior size, like back seat legroom for our grandson, also weight vs. HP power to assess acceleration.

Then we visited dealerships to drive cars, but did not get into prices. Note that Edmunds lists a Toyota advertising fee by name but without $, that was then added by one dealer. After all that I sent Emails to internet persons of all delaers, made a table of various dealer's prices, and picked the best price. I did not haggle, was too much already worn out from that previous work, I was 72 then. The whole process probably took us 4 weeks, what a hassle.

You can remove a dealer's sticker by pealing it off after you heat it with a hair dryer. I would never buy a car with a dealer plate screwed on, that are points for future rust.

One caution : when picking up the new car, inspect it in all details before paying. Our internet lady did not put in floor mats though they were in her quote, we did not catch it because the floor looked like carpet, but wore in one spot, got then car mats for free retrofitted. We got tired out during pick-up time and bought $1k undercoating to be conservative, but did not buy additional warranty after year 3 to year 8. What a waste.
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Hawaiishrimp
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Re: My New Car Buying Tips

Post by Hawaiishrimp »

TomatoTomahto wrote:
Hawaiishrimp wrote:Too bad, this won't work for a Tesla. :oops:
I don't miss all the strategy about buying a car. Tesla is sufficiently special that normal rules don't apply. They've had $5,000 of mine since October of 2013, and I'm still semi-patiently waiting. I finally have a pretty good idea of what the car will look like. :D
Are you buying the Model S or X?
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
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TomatoTomahto
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Re: My New Car Buying Tips

Post by TomatoTomahto »

Hawaiishrimp wrote:
TomatoTomahto wrote:
Hawaiishrimp wrote:Too bad, this won't work for a Tesla. :oops:
I don't miss all the strategy about buying a car. Tesla is sufficiently special that normal rules don't apply. They've had $5,000 of mine since October of 2013, and I'm still semi-patiently waiting. I finally have a pretty good idea of what the car will look like. :D
Are you buying the Model S or X?
The X, although AWD is now available in the S also (it wasn't when I put down my deposit). I have become accustomed to sitting higher up than a sedan, and the Model S is pretty low.
I get the FI part but not the RE part of FIRE.
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Hawaiishrimp
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Re: My New Car Buying Tips

Post by Hawaiishrimp »

TomatoTomahto wrote: The X, although AWD is now available in the S also (it wasn't when I put down my deposit). I have become accustomed to sitting higher up than a sedan, and the Model S is pretty low.

How much Out the Door?
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
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TomatoTomahto
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Re: My New Car Buying Tips

Post by TomatoTomahto »

Hawaiishrimp wrote:
TomatoTomahto wrote: The X, although AWD is now available in the S also (it wasn't when I put down my deposit). I have become accustomed to sitting higher up than a sedan, and the Model S is pretty low.
How much Out the Door?
I won't know until the Design Studio opens up... any day now :D I think it will be around $100k for a well-optioned vehicle. I usually take my wife's hand-me-down cars because I'm not that into it, but I haven't been this excited about a car since I was a teenager.
I get the FI part but not the RE part of FIRE.
oragne lovre
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Re: My New Car Buying Tips

Post by oragne lovre »

Busting Myths wrote:
jdb wrote:All good tips. The most important lesson is that neither the dealer nor the salesmen and certainly not the sales manager are your friends. I am embarrassed thinking of all the times I ended up over paying for a car by thinking they were my friends. By far best car buying experience for me was purchase of Tesla Model S online direct from manufacturer. No dealer, no sales manager, no salesman. No hassling over price. Delivered to my house where rep spent a couple hours showing me car operation details. Never intend to buy from a dealer again, looking forward to buying the Model X in 2015 through the internet and phone.
All this means is that Tesla kept the mark up instead of letting a dealer have it.
It's not too bad a sale strategy for Tesla if it's able to appeal to customers who prefer to shop a car the Amazon.com way.

OP's tips are great for those who buy non-Tesla cars though.
The finest, albeit the most difficult, of all human achievements is being reasonable.
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denovo
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Re: My New Car Buying Tips

Post by denovo »

oragne lovre wrote:
OP's tips are great for those who buy non-Tesla cars though.

I think it only really applies to new cars also. It's hard to apply it to used cars since there's too much variation. Buying a new car is like buying a commodity.
"Don't trust everything you read on the Internet"- Abraham Lincoln
sambb
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Re: My New Car Buying Tips

Post by sambb »

oragne lovre wrote:
Busting Myths wrote:
jdb wrote:All good tips. The most important lesson is that neither the dealer nor the salesmen and certainly not the sales manager are your friends. I am embarrassed thinking of all the times I ended up over paying for a car by thinking they were my friends. By far best car buying experience for me was purchase of Tesla Model S online direct from manufacturer. No dealer, no sales manager, no salesman. No hassling over price. Delivered to my house where rep spent a couple hours showing me car operation details. Never intend to buy from a dealer again, looking forward to buying the Model X in 2015 through the internet and phone.
All this means is that Tesla kept the mark up instead of letting a dealer have it.
It's not too bad a sale strategy for Tesla if it's able to appeal to customers who prefer to shop a car the Amazon.com way.

OP's tips are great for those who buy non-Tesla cars though.

Tesla's gross margin of >20% is way over other manufacturers. Buying a tesla is like paying thousands of dollars above the sticker price. Dealers would actually drive that price down. For those buying a regular car, you might not like the dealer, but its better than the alternative.
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tc101
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Re: My New Car Buying Tips

Post by tc101 »

Also, how do you get out of there without leaving any personal info?
I have a google phone number that I never use, and an alternate email that I never use. I have those printed out and hand them to anyone who asks for that info who I don't really want to give the info to. It is faster and easier than saying "no". Also, if I do want to interact with them I can use that phone number or email.
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oragne lovre
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Re: My New Car Buying Tips

Post by oragne lovre »

sambb wrote:
oragne lovre wrote:
Busting Myths wrote:
jdb wrote:All good tips. The most important lesson is that neither the dealer nor the salesmen and certainly not the sales manager are your friends. I am embarrassed thinking of all the times I ended up over paying for a car by thinking they were my friends. By far best car buying experience for me was purchase of Tesla Model S online direct from manufacturer. No dealer, no sales manager, no salesman. No hassling over price. Delivered to my house where rep spent a couple hours showing me car operation details. Never intend to buy from a dealer again, looking forward to buying the Model X in 2015 through the internet and phone.
All this means is that Tesla kept the mark up instead of letting a dealer have it.
It's not too bad a sale strategy for Tesla if it's able to appeal to customers who prefer to shop a car the Amazon.com way.

OP's tips are great for those who buy non-Tesla cars though.

Tesla's gross margin of >20% is way over other manufacturers. Buying a tesla is like paying thousands of dollars above the sticker price. Dealers would actually drive that price down. For those buying a regular car, you might not like the dealer, but its better than the alternative.
I'm curious as to get the source of Tesla's gross margin of >20%.
The finest, albeit the most difficult, of all human achievements is being reasonable.
Cindyjrn
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Re: My New Car Buying Tips

Post by Cindyjrn »

That 20% can't possibly be true. They don't have economies of scale yet. Not even close. It would take them 50 years of selling as few cars as they are selling to achieve a 20% profit margin. Maybe they're making 20% on the vehicle if you only factor in the actual cost of materials and labor to produce that one vehicle, not all the initial expenditures to produce one vehicle.
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tc101
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Re: My New Car Buying Tips

Post by tc101 »

AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
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noraz123
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Re: My New Car Buying Tips

Post by noraz123 »

Cindyjrn wrote:Maybe they're making 20% on the vehicle if you only factor in the actual cost of materials and labor to produce that one vehicle, not all the initial expenditures to produce one vehicle.
Yes, the previous post referred to gross margin, not net margin. Gross margin is exactly what you think, solely the selling price - cost of goods sold. For the most recent year in the filed financials listed on Yahoo! Finance (http://finance.yahoo.com/q/is?s=TSLA+In ... ent&annual), Tesla's gross margin was 27.5%.

Yet, while they had revenue of $3.2B, and a gross profit $882M, they still lost $294M.

I agree with you that they will need to ramp up production much further and develop economies of scale to become profitable.

EDIT: To put things in perspecive, Ford's gross margin is 12.4% (again, based on the most recent annual data on Yahoo! Finance). Might not be pure apple to apples comparison, as Ford may have other lines of business that would be included in that number. However, as a previous poster mentioned, paying for a Tesla will likely have a higher markup than a Ford or other car.
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denovo
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Re: My New Car Buying Tips

Post by denovo »

tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
"Don't trust everything you read on the Internet"- Abraham Lincoln
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tc101
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Re: My New Car Buying Tips

Post by tc101 »

There is so much talk about negotiating the best price on a new car. For a car that costs roughly $25K, how much difference is there between the best price given to the ultimate skilled negotiator, and the average price to the average buyer, and the worst price given to the fool who is taken advantage of?
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denovo
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Re: My New Car Buying Tips

Post by denovo »

tc101 wrote:There is so much talk about negotiating the best price on a new car. For a car that costs roughly $25K, how much difference is there between the best price given to the ultimate skilled negotiator, and the average price to the average buyer, and the worst price given to the fool who is taken advantage of?
HI tc101,

When buying a new car, there is potentially 3 separate transactions. 1. The price on the new car. 2. How much they pay you for a trade-in. 3. Financing costs.

An unwise person could easily lose around $6,000 on these combined transactions for a $25k car. But specifically on the purchase of a new car, easily around 2-3k grand.
"Don't trust everything you read on the Internet"- Abraham Lincoln
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tc101
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Re: My New Car Buying Tips

Post by tc101 »

An unwise person could easily lose around $6,000 on these combined transactions for a $25k car. But specifically on the purchase of a new car, easily around 2-3k grand.
I'll be paying cash, and selling my old car to a friend, but still, for $2-3K it is worth the time and trouble to understand how this works.
. | The most important thing you should know about me is that I am not an expert.
bonn
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Re: My New Car Buying Tips

Post by bonn »

coachz wrote: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.
Of course. Those are the dealers that won't be selling you a car. This is functionally equivalent to them saying that they won't beat the price. In my case I had the car delivered to my address (no separate charge, and the price was the lowest of any offers I got) and signed the paperwork there, so I didn't even visit the dealer to pick up the car.
bonn
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Re: My New Car Buying Tips

Post by bonn »

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.
There's two different questions in there. The first one is: are you actually serious about buying this car in the very near future? In your initial correspondence and throughout, make sure to say that you're looking to buy the car in the next few days. The other question is: will you accept a bid with strings attached that put you in a poor position? Just say no to that one.
ubermax
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Re: My New Car Buying Tips

Post by ubermax »

My question has always been, using Edmunds numbers for example : how much better can you really do than (Invoice - Private Used Car Pricing) when there's a trade-in involved on a new car ? , as say a percentage of MSRP ?

I mean is it more than 1% ? Anybody have a feel for this ?
tj
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Re: My New Car Buying Tips

Post by tj »

ubermax wrote:My question has always been, using Edmunds numbers for example : how much better can you really do than (Invoice - Private Used Car Pricing) when there's a trade-in involved on a new car ? , as say a percentage of MSRP ?

I mean is it more than 1% ? Anybody have a feel for this ?

Trade-in is irrelevant. Just take it to Carmax and if they don't match the CarMax price then sell your car to CarMax. Obviously bring a friend or relative so they can drive your old car for you just in case.
BanditKing
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Re: My New Car Buying Tips

Post by BanditKing »

We purchased a new 2015 Hyundai Sonata Hybrid in mid August, and I used a variation on this.

(EDIT: sorry for the wall of text, I rambled on a bit)
  • We test drove several cars and finally decided the Hyundai was our "10 year car". Well, the Wife decided it was.
  • Once home, we went through the options and decided exactly what features we wanted, all the way down to the bumper protector and all-weather mats. With Hyundai, the options are limited, so we basically got everything on it.
  • Via USAA's buyer's service, and they contract through true-car, we put out a request for prices, and got three back instantly. One was our preferred local dealer, the other two were within 90 minutes. This is what I considered my worst-price scenario. I DID NOT price dealer added items, which in this case was floormats, cargo netting, and bumper protector (about $300 retail price)
  • I spent the weekend poking around the web in Chicago (about 3 hours away) to see what they had, and put in a couple lazy requests for pricing, putting in the comments I'd be purchasing within 10 days.
  • Monday I got prices from two Chicago-area dealers. One was bad and the salesperson was a jerk, but the other was very aggressive, about $800 below the lowest USAA/True-Car price, so now I had a new worst-price.
  • I then called one of the other non-local dealers, told them my Chicago price and asked them to do better. I told them I was still shopping, and that they needed to put their best foot forward. They beat Chicago by $600.
  • Called non-local dealer two, gave them the other's price. They put me on hold for a while, checking in every few minutes. The salesperson swore they weren't doing the "let me check with my manager" shuffle, and that the price at this point was so aggressive they were wondering what the catch was. After about 15 minutes, she came back and said "We just can't do it. You gotta go with dealer one."
  • Now I called the local dealership, gave them my working lowest bid, and asked them what they could do. They knocked $250 off.
  • I told them "let me crunch my numbers - I'll call you back." I went to make lunch.
  • Called back Local Dealer. Told them "Ok, if you can toss in Floormats and the bumper protector, we'll be in tonight. "Done!" was the response.
  • Went in after Wife got home. They had the car in the parking lot with the huge red bow on it.
  • They also tossed in the cargo net for free because "We had one lying around."
  • We had our financing already lined up, but they pointed us towards a local CU that beat the rate by .75% and they were able to sign us up right there.
  • We DID get the extended warranty, because with all the electronics in a hybrid and Nav system, we felt that was a good piece of mind - 10year/100k miles. They wanted $1750 for it, (list), immediately offered it to us at $900, and we settled on $750 after I winced.
  • Shook hand, got keys, got the tour of the car.
  • On the dashboard was a Thank You note with a $50 gift certificate to a local Italian restaurant and two passes to the local movie theater - Dinner and a Movie on them.
When it was all said and done, MSRP for the car was just under $33k. We walked out the door for $20.5k including the warranty. There was a $4k rebate special going on, which helped.

By having the USAA/True-Car price as a starting point, I immediately had an idea where I should negotiate from and could comfortably say "Well, I can't do worse than that". Shopping year-end (August) helped push the dealers to be aggressive as well.
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tc101
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Re: My New Car Buying Tips

Post by tc101 »

I understand why car dealers do everything super slow and delay you as much as possible during the negotiating process. They are trying to wear down and exhaust the customer so eventually they just go along with a less than great deal because they are so tired of the whole process.

I do not understand why they do everything super slow and delay you as much as possible when you first come to look at and test drive a car. You are not going to buy that first day, and it just irritates the customer and prepares them for the game later when it really counts. Why is the strategy at the first meeting to do things so slow and delay so much?
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Topic Author
denovo
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Re: My New Car Buying Tips

Post by denovo »

tc101 wrote:
I do not understand why they do everything super slow and delay you as much as possible when you first come to look at and test drive a car. You are not going to buy that first day, and it just irritates the customer and prepares them for the game later when it really counts. Why is the strategy at the first meeting to do things so slow and delay so much?
I know plenty of dealers who can close sales after a customer test-drives a car. It's their job to be always be closing. He can see how much you liked the car and will give you a great offer that will be gone if you don't buy today!
"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 »

Bogleheads,

I ran into this interesting longform article about a journalist who went undercover as a dealer.Its long, but interesting.

http://www.edmunds.com/car-buying/confe ... sman.phtml

A follow-up in 2009.

http://www.edmunds.com/car-buying/confe ... -2009.html

At the end he discusses his tips on how to buy a car, the advice should sound familiar.
5. Shop around.

Say for a second you didn't know any of the numbers. Say you were in a jam and had one morning to get a new car. You could probably get a good deal by shopping around. You can do this in person or on the phone — or even with e-mail.

What you do is this. Contact dealer number one. Tell the salesperson, "I'm ready to buy today but I want your best price on the car." When the salesperson gives you his best price, write it down. Or, if you are doing this in person, have him write it on the back of their business card.

Now contact dealer number two and do the same thing. Only, tell them you have already been to dealer number one and you got such and such price. Then, repeat the mantra: "I'm ready to buy today. But I want your best price." Naturally, they will try to undercut the first guy's offer.

Now contact dealer number three and do the same thing. By now you should have three offers. If you want, you can even go back to the first guy and see if he will whittle a few more bucks off his offer. If not, can the dealer throw in something else to make their offer more attractive?

The beauty of this is that the market will define itself in a short period of time. And when you're done, you will be confident that you got the best price possible. Incidentally, dealers hate it when you shop their offer. They hate it because it can get you a very good price.
"Don't trust everything you read on the Internet"- Abraham Lincoln
hudson
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Re: My New Car Buying Tips

Post by hudson »

denovo wrote:Bogleheads,

I ran into this interesting longform article about a journalist who went undercover as a dealer.Its long, but interesting.

http://www.edmunds.com/car-buying/confe ... sman.phtml

A follow-up in 2009.

http://www.edmunds.com/car-buying/confe ... -2009.html

At the end he discusses his tips on how to buy a car, the advice should sound familiar.
5. Shop around.

Say for a second you didn't know any of the numbers. Say you were in a jam and had one morning to get a new car. You could probably get a good deal by shopping around. You can do this in person or on the phone — or even with e-mail.

What you do is this. Contact dealer number one. Tell the salesperson, "I'm ready to buy today but I want your best price on the car." When the salesperson gives you his best price, write it down. Or, if you are doing this in person, have him write it on the back of their business card.

Now contact dealer number two and do the same thing. Only, tell them you have already been to dealer number one and you got such and such price. Then, repeat the mantra: "I'm ready to buy today. But I want your best price." Naturally, they will try to undercut the first guy's offer.

Now contact dealer number three and do the same thing. By now you should have three offers. If you want, you can even go back to the first guy and see if he will whittle a few more bucks off his offer. If not, can the dealer throw in something else to make their offer more attractive?

The beauty of this is that the market will define itself in a short period of time. And when you're done, you will be confident that you got the best price possible. Incidentally, dealers hate it when you shop their offer. They hate it because it can get you a very good price.
I bought my last 3 Toyota vehicles using this lowest bid process. I believe that I got the lowest price available at that time. This lowest bid process changed me from a wimp negotiator to an effective negotiator. Wimp negotiators never get rude talk from dealer sales managers. I got into some very short and tense discussions with sales managers...mostly those right beside interstate highways. I thanked them for talking to me and moved on.

I shopped at the end of the month to take advantage of the internal dealer-manufacturer incentives. I would imagine that the upcoming Dec. 31st would be the best time to buy a car all year.

I called dealers far away to see what they could do. I only made one purchase at one of these far off dealerships. I was amazed that a dealer 100 miles away could bid that much lower than the market that I was in.

I figured out precisely what I wanted before I started the process. I would go to dealerships and test drive vehicles until I figured out exactly what I wanted...I didn't stick around for any long discussions. I test drove, asked questions and hit the road. Later all negotiations would be by email or by phone. I found that phone was more effective than email. Email was mostly used after the phone call to quote prices and send spec sheets. On one vehicle, I found out that my choice was not widely available and no dealer would negotiate...so I quit and changed to a vehicle that was widely available.

When calling dealers back and telling them what my lowest price was, I shared the lowest price with them and did not say another word. I think silence is a great negotiating strategy. Many dealers wanted to talk about extra warranties and extra service deals. I only wanted the best out the door price. I was pretty much silent...but always very polite...while they pitched their extra advantages. They would ask me if I was still there.

In my case, I learned that the largest dealers in my area wouldn't negotiate...but they would call back the most...and they really sounded good...but they wouldn't drop their initial price; once a dealer did not drop their price, I dropped them. I found that the smaller Toyota dealers would negotiate. I knew that when things started getting ugly, that I was on the right track. I never entered any debates...I never shared any of my information except for the lowest price...I never got excited on the phone. If they asked me for proof of my lowest price, my silence was deafening. If they asked me which dealer gave me a price I would respond with silence. I didn't want to share that valuable information. I didn't respond...I didn't argue. I didn't do endless rounds of negotiations...just two or three rounds. When I got down to the finalists, sometimes I would tell them that I was going to make a decision and a commitment in a few hours...then I did exactly that. One time I received a $500 lower offer after committing to a dealer. I didn't jump ship...I honored my verbal commitment ...although that wasn't required.

On one vehicle, all 3 dealers were quoting a vehicle with the same VIN number. I later figured out the vehicle was at a fourth dealer located 250 miles away. I committed to the winning dealer. Another dealer was upset that I didn't go with him...he bought the vehicle that was 250 miles away...right out from under the winning dealer. To make a long story short. The winning dealer didn't have a vehicle that met my specifications and we had a deal. The winning dealer ended up selling me a better equipped vehicle at the agreed on price. The losing dealer that bought the vehicle that was 250 miles away kept calling thinking that he won. I kept repeating to him that I already had a vehicle. I didn't tell him that because of him I got a vehicle with a "sticker price" $2000 higher.

Edit: Added Sep. 2, 2016...
I found notes from my last vehicle purchase on 3 dealerships' final bids:
Dealer A was $2087 over the low bid; dealer B was $1787 over the low bid; dealer C was $2351 over the low bid.
I bought it from dealer D....he dropped $2745 from his original bid.

Edit: Added March 22, 2017...

I've used James Bragg's service the last 2 times I bought a vehicle. I've found that it's worth the $40 for his packet; I'll use the service again. Part of the deal is that you can call him for advice. When working on a new purchase, I ran into a "wall"; there just weren't many vehicles like I wanted out there...just a handful on the east coast; I called James; he coached me into negotiating for another vehicle with high availability. Consider taking a look at his website and see if it fits you: http://www.fightingchance.com/

I've decided that on my next vehicle, that I'm not going to use emails or faxes very much...initially. The dealers that I've worked with like talking on the phone. I'm not going to tell the dealer my overall plan; I'm going to give him my list of wants and ask for an out-the-door price by phone followed up with an email. Later, I'll call back and see if he or she can beat my best price. I have no problem giving out my email or phone number. If a dealer becomes a bother, I'll just block their number and email.
Last edited by hudson on Wed Mar 22, 2017 5:06 am, edited 2 times in total.
d0gerz
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Re: My New Car Buying Tips

Post by d0gerz »

denovo wrote: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.
Had a question about this. Is it advisable to get a pre-approval from a bank/credit union before requesting bids from dealers?

And does a bank pre-approval entail a hard pull on my credit report? Envisioning a scenario if say I get a pre-approval but then dealer offers better rate pending credit check. So they'll pull my report as well. Does this mean I'll then have two hard pulls, one from the bank and another from the dealer?
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Re: My New Car Buying Tips

Post by grabiner »

d0gerz wrote:
denovo wrote: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.
Had a question about this. Is it advisable to get a pre-approval from a bank/credit union before requesting bids from dealers?
If you are going to finance, having a pre-approval from your bank is useful. You don't have to use the bank, but you know that you can get a loan on specific terms, and thus you can have more confidence in the payments and interest rate you must pay.
And does a bank pre-approval entail a hard pull on my credit report? Envisioning a scenario if say I get a pre-approval but then dealer offers better rate pending credit check. So they'll pull my report as well. Does this mean I'll then have two hard pulls, one from the bank and another from the dealer?
The credit scoring models count only one inquiry if you have multiple car/home/student loan inquiries in a short time period. An inquiry indicates that you are seeking new credit, but multiple inquiries of this type imply that you are rate-shopping, not buying multiple cars/homes/college educations at once, so the score adjustment is the same for one or multiple inquiries. (In contrast, if you have several credit-card inquiries in a short time, you could be trying to open several credit cards, so this will lower your score more than a single inquiry does.)
Wiki David Grabiner
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Re: My New Car Buying Tips

Post by finite_difference »

denovo wrote:
tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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denovo
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Re: My New Car Buying Tips

Post by denovo »

grabiner wrote:
d0gerz wrote:
denovo wrote: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.
Had a question about this. Is it advisable to get a pre-approval from a bank/credit union before requesting bids from dealers?
If you are going to finance, having a pre-approval from your bank is useful. You don't have to use the bank, but you know that you can get a loan on specific terms, and thus you can have more confidence in the payments and interest rate you must pay.
And does a bank pre-approval entail a hard pull on my credit report? Envisioning a scenario if say I get a pre-approval but then dealer offers better rate pending credit check. So they'll pull my report as well. Does this mean I'll then have two hard pulls, one from the bank and another from the dealer?
The credit scoring models count only one inquiry if you have multiple car/home/student loan inquiries in a short time period. An inquiry indicates that you are seeking new credit, but multiple inquiries of this type imply that you are rate-shopping, not buying multiple cars/homes/college educations at once, so the score adjustment is the same for one or multiple inquiries. (In contrast, if you have several credit-card inquiries in a short time, you could be trying to open several credit cards, so this will lower your score more than a single inquiry does.)
Grabiner beat me to it. Inquiries within a 30 day period count as one.

http://www.myfico.com/crediteducation/c ... iries.aspx
Last edited by denovo on Thu Sep 01, 2016 10:59 pm, edited 1 time in total.
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Re: My New Car Buying Tips

Post by denovo »

finite_difference wrote:
denovo wrote:
tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
Car buying services will never get you the best deal. Or not even a good deal. They are a waste of time.
"Don't trust everything you read on the Internet"- Abraham Lincoln
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Re: My New Car Buying Tips

Post by finite_difference »

denovo wrote:
finite_difference wrote:
denovo wrote:
tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
Car buying services will never get you the best deal. Or not even a good deal. They are a waste of time.
Really? The Costco Auto program has been recommended in other threads. Supposedly it will not get you the "best" deal but should give you a good deal. (As in, close to invoice, I think. Is that not a good deal?)
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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Re: My New Car Buying Tips

Post by ejvyas »

Negotiate over email/phone. Dont step in until you get the best rate. Use truecar for reference
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Re: My New Car Buying Tips

Post by denovo »

finite_difference wrote:
denovo wrote:
finite_difference wrote:
denovo wrote:
tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
Car buying services will never get you the best deal. Or not even a good deal. They are a waste of time.
Really? The Costco Auto program has been recommended in other threads. Supposedly it will not get you the "best" deal but should give you a good deal. (As in, close to invoice, I think. Is that not a good deal?)
What threads have you been looking at? Most people pointed it's utterly useless.

viewtopic.php?t=160011
viewtopic.php?t=177139
viewtopic.php?f=2&t=134547


As noted here in this discussion, the invoice price is useless as a reference point.

viewtopic.php?t=134478

There's really only two choices and no magic shortcut.

1. Spend a while reading this thread and get a great price OR

2. Just use a car-buying service and leave thousands on the table.
Last edited by denovo on Fri Sep 02, 2016 2:18 am, edited 1 time in total.
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Re: My New Car Buying Tips

Post by denovo »

I did this last week for purchasing a car. Fortunately, this stuff still works although some of the dealer tactics have evolved. I will write up a new thread by Saturday.
"Don't trust everything you read on the Internet"- Abraham Lincoln
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Re: My New Car Buying Tips

Post by an_asker »

ejvyas wrote:Negotiate over email/phone. Dont step in until you get the best rate. Use truecar for reference
... and ONLY as a reference. If you are not (significantly) undercutting truecar, you are paying too much!
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Re: My New Car Buying Tips

Post by an_asker »

hudson wrote:[...]The losing dealer that bought the vehicle that was 250 miles away kept calling thinking that he won. I kept repeating to him that I already had a vehicle. I didn't tell him that because of him I got a vehicle with a "sticker price" $2000 higher.
Ha ha ha! You da man!!

Thanks for the chuckle!
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Re: My New Car Buying Tips

Post by Bustoff »

Folks refer to the using the TrueCar price, but which price?

TrueCar pricing displays a range of pricing as follows:
Exceptional
Great
Good
Above Market

Are you guys using the lowest price ever paid under the "Exceptional" price column?
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Re: My New Car Buying Tips

Post by an_asker »

Bustoff wrote:Folks refer to the using the TrueCar price, but which price?

TrueCar pricing displays a range of pricing as follows:
Exceptional
Great
Good
Above Market

Are you guys using the lowest price ever paid under the "Exceptional" price column?
I cannot speak for the others. Me? I refer to the price on the "certificate" that Truecar awards me to buy the car of my choice (needless to say, that figure could be anywhere on the Truecar's bell curve depending on the specific Make and Model).
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Re: My New Car Buying Tips

Post by TomatoTomahto »

Never again a dealer! Tesla from now on.
I get the FI part but not the RE part of FIRE.
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Re: My New Car Buying Tips

Post by Ervin »

Bustoff wrote:Folks refer to the using the TrueCar price, but which price?
Smart people ignore that price, the same way they ignore the MSRP.

Truecar is just another website that panders to dealers, to make one feel better about dealer robbery. Pandering to buyers almost put them in bankruptcy years ago, so they switched sides and changed the name.

The number you should really care about you can get for $40 from FightingChance (or for free from Edmunds etc., if you know where to search and your time is worthless), and that's the cost to the dealer. And, trust me, that's a much smaller number than anything you see on Truecrapcar.
Last edited by Ervin on Fri Sep 02, 2016 12:24 pm, edited 5 times in total.
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Re: My New Car Buying Tips

Post by Ervin »

finite_difference wrote:
denovo wrote:
finite_difference wrote:
denovo wrote:
tc101 wrote:AAA has a service that claims to get you a great price when buying a new car. Has anyone used it?
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
Car buying services will never get you the best deal. Or not even a good deal. They are a waste of time.
Really? The Costco Auto program has been recommended in other threads. Supposedly it will not get you the "best" deal but should give you a good deal. (As in, close to invoice, I think. Is that not a good deal?)
The Costco car buying service is a joke. Almost anybody could get that price in 10 minutes.

For my last purchase, I tried Carbargains. Their negotiated prices were so bad, they refunded me their fee. The dealers have no respect for these services.

The time-tested truth is: the best price is at the end of December. Find a new car from the previous season and negotiate until the price becomes unbelievable. If you need a car earlier, just get the dealer's price (invoice minus all the dealer holdback etc.), and get as close as you can to it. Also, don't be afraid to buy from far away. There are a few high-volume dealers in this country that will sell you a car for thousands less than anything you could negotiate around you (cost of plain tickets included). You just need to discover them.
RIP, Mr. Bogle.
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Re: My New Car Buying Tips

Post by d0gerz »

grabiner wrote: If you are going to finance, having a pre-approval from your bank is useful. You don't have to use the bank, but you know that you can get a loan on specific terms, and thus you can have more confidence in the payments and interest rate you must pay.
Thank you for the reply. Related to this, suppose I go with the bank. How does the money change hands between the bank and the dealership? Does the dealership contact the bank directly? Or do I have to get the bank to deposit the funds to my account and then write a check to the dealership? Apologies if this is a stupid question, I just have no experience with this so am curious. The only kind of financing I am familiar with are student loans and credit cards.
The credit scoring models count only one inquiry if you have multiple car/home/student loan inquiries in a short time period. An inquiry indicates that you are seeking new credit, but multiple inquiries of this type imply that you are rate-shopping, not buying multiple cars/homes/college educations at once, so the score adjustment is the same for one or multiple inquiries. (In contrast, if you have several credit-card inquiries in a short time, you could be trying to open several credit cards, so this will lower your score more than a single inquiry does.)
Ok thanks again. Yeah I was assuming it would work similar to multiple credit card applications. Good to know that isn't the case.
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Re: My New Car Buying Tips

Post by d0gerz »

denovo wrote:I did this last week for purchasing a car. Fortunately, this stuff still works although some of the dealer tactics have evolved. I will write up a new thread by Saturday.
Waiting eagerly for the new thread. Thank you so much for this thread as well. I have been slowly going through it, trying to absorb as much as I can before a potential new car purchase this month.
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Re: My New Car Buying Tips

Post by hudson »

hudson wrote:
denovo wrote:Bogleheads,

I ran into this interesting longform article about a journalist who went undercover as a dealer.Its long, but interesting.

http://www.edmunds.com/car-buying/confe ... sman.phtml

A follow-up in 2009.

http://www.edmunds.com/car-buying/confe ... -2009.html

At the end he discusses his tips on how to buy a car, the advice should sound familiar.
5. Shop around.

Say for a second you didn't know any of the numbers. Say you were in a jam and had one morning to get a new car. You could probably get a good deal by shopping around. You can do this in person or on the phone — or even with e-mail.

What you do is this. Contact dealer number one. Tell the salesperson, "I'm ready to buy today but I want your best price on the car." When the salesperson gives you his best price, write it down. Or, if you are doing this in person, have him write it on the back of their business card.

Now contact dealer number two and do the same thing. Only, tell them you have already been to dealer number one and you got such and such price. Then, repeat the mantra: "I'm ready to buy today. But I want your best price." Naturally, they will try to undercut the first guy's offer.

Now contact dealer number three and do the same thing. By now you should have three offers. If you want, you can even go back to the first guy and see if he will whittle a few more bucks off his offer. If not, can the dealer throw in something else to make their offer more attractive?

The beauty of this is that the market will define itself in a short period of time. And when you're done, you will be confident that you got the best price possible. Incidentally, dealers hate it when you shop their offer. They hate it because it can get you a very good price.
I bought my last 3 Toyota vehicles using this lowest bid process. I believe that I got the lowest price available at that time. This lowest bid process changed me from a wimp negotiator to an effective negotiator. Wimp negotiators never get rude talk from dealer sales managers. I got into some very short and tense discussions with sales managers...mostly those right beside interstate highways. I thanked them for talking to me and moved on.

I shopped at the end of the month to take advantage of the internal dealer-manufacturer incentives. I would imagine that the upcoming Dec. 31st would be the best time to buy a car all year.

I called dealers far away to see what they could do. I only made one purchase at one of these far off dealerships. I was amazed that a dealer 100 miles away could bid that much lower than the market that I was in.

I figured out precisely what I wanted before I started the process. I would go to dealerships and test drive vehicles until I figured out exactly what I wanted...I didn't stick around for any long discussions. I test drove, asked questions and hit the road. Later all negotiations would be by email or by phone. I found that phone was more effective than email. Email was mostly used after the phone call to quote prices and send spec sheets. On one vehicle, I found out that my choice was not widely available and no dealer would negotiate...so I quit and changed to a vehicle that was widely available.

When calling dealers back and telling them what my lowest price was, I shared the lowest price with them and did not say another word. I think silence is a great negotiating strategy. Many dealers wanted to talk about extra warranties and extra service deals. I only wanted the best out the door price. I was pretty much silent...but always very polite...while they pitched their extra advantages. They would ask me if I was still there.

In my case, I learned that the largest dealers in my area wouldn't negotiate...but they would call back the most...and they really sounded good...but they wouldn't drop their initial price; once a dealer did not drop their price, I dropped them. I found that the smaller Toyota dealers would negotiate. I knew that when things started getting ugly, that I was on the right track. I never entered any debates...I never shared any of my information except for the lowest price...I never got excited on the phone. If they asked me for proof of my lowest price, my silence was deafening. If they asked me which dealer gave me a price I would respond with silence. I didn't want to share that valuable information. I didn't respond...I didn't argue. I didn't do endless rounds of negotiations...just two or three rounds. When I got down to the finalists, sometimes I would tell them that I was going to make a decision and a commitment in a few hours...then I did exactly that. One time I received a $500 lower offer after committing to a dealer. I didn't jump ship...I honored my verbal commitment ...although that wasn't required.

On one vehicle, all 3 dealers were quoting a vehicle with the same VIN number. I later figured out the vehicle was at a fourth dealer located 250 miles away. I committed to the winning dealer. Another dealer was upset that I didn't go with him...he bought the vehicle that was 250 miles away...right out from under the winning dealer. To make a long story short. The winning dealer didn't have a vehicle that met my specifications and we had a deal. The winning dealer ended up selling me a better equipped vehicle at the agreed on price. The losing dealer that bought the vehicle that was 250 miles away kept calling thinking that he won. I kept repeating to him that I already had a vehicle. I didn't tell him that because of him I got a vehicle with a "sticker price" $2000 higher.

Edit: Added Sep. 2, 2016...
I found notes from my last vehicle purchase on 3 dealerships' final bids:
The bids were on the same identical vehicle...identical Vehicle Identification Number...VIN.
Dealer A was $2087 over the low bid; dealer B was $1787 over the low bid; dealer C was $2351 over the low bid.
I bought it from dealer D....he dropped $2745 from his original bid.
finite_difference
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Re: My New Car Buying Tips

Post by finite_difference »

denovo wrote:
finite_difference wrote:
denovo wrote:
finite_difference wrote:
denovo wrote:
It's just a different label of truecar buying service.
Does that mean it's good or bad? A starting price that you can negotiate from?

How would that compare to the Costco Auto program?
Car buying services will never get you the best deal. Or not even a good deal. They are a waste of time.
Really? The Costco Auto program has been recommended in other threads. Supposedly it will not get you the "best" deal but should give you a good deal. (As in, close to invoice, I think. Is that not a good deal?)
What threads have you been looking at? Most people pointed it's utterly useless.

viewtopic.php?t=160011
viewtopic.php?t=177139
viewtopic.php?f=2&t=134547


As noted here in this discussion, the invoice price is useless as a reference point.

viewtopic.php?t=134478

There's really only two choices and no magic shortcut.

1. Spend a while reading this thread and get a great price OR

2. Just use a car-buying service and leave thousands on the table.
That first thread you linked to was actually one of the ones I remember reading :) Some people at least found it to be decent.

I really appreciate the help, denovo.

So to make this a bit more specific, I don't really care if I am leaving a bit of money on the table since I hate negotiating but I don't want to get too ripped off either. I'm trying for "win-win". What is a reasonable price then for a Honda Odyssey EX (MSRP $32,700, Truecar $29,813). I was thinking if I could get it for $29,000 that would be a good deal. Am I still leaving thousands on the table at that point?
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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