CAR: Buy new, buy used (2016), lease new

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RRAAYY3
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CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Thu Nov 23, 2017 11:39 am

After many hours of research and a recent test drive - I'm in love with the new Civics. Researched edmunds, truecar, carguru, and here - it's a great car. Now that I'm "sold" on the Honda Civic ... just trying to figure out the best route financially to acquire one. I've e-mailed 4 dealerships requesting MF/Residual/etc., I've got the truecar value, and I've even printed out low ball prices on the same to help with the final negotiation ...

So, factoring in a 10-year outlook: buy NEW, buy USED (2016 Sedan, 2017 Hatchback), lease NEW

1. Is certified pre owned a must for buying used or just another trick to up the price?
2. NEW is the most expensive initially to buy, but in theory I'd get a few more years out of it so long term may be better?
3. Buying used seems like it may be the more financially prudent move - I'm just not familiar with the process / pre-inspection / making sure I'm not getting screwed.
4. I don't own a business, but my car is crucial to my job so I'm sure I could write off some of it (better to lease?).
5. I have excellent credit, above 800.
6. i have an oversized emergency fund, so could in theory pay for whatever Civic I go with by writing a check and driving for 8-10 years.

I'm considering lease because of $0 down, lower monthly payment, and a chance to really "test drive" whether I like the FWD compact class - but I'm not at all concerned with driving the latest technology / shiny new thing so buying used is an option for sure. I love the re-design, which took place in 2016 and I've found several for less than 20k miles so pretty much new as far as Hondas go.

One factor I don't know how to quanify - as far as my monthly budget goes I plan on investing 1/3 of my net each month into taxable (US/INTL whichever is lacking at the time). I budget 800/month for "fun" each month (dinners, drinks, etc.). I can "afford" a car payment+insurance of $850 a month, but that is absurd. I''d like to keep my monthly payment + insurance to $400 if possible, then spend the remainder on additional "fun" when it presents itself and/or sweep that remainder to Ally.

Short version: Invest 1/3 of my net, after that investment and monthly expenses/fun budget I'd have approximately 850 to play with. I could get a fancy car, but quite frankly I hated the attention it brought when I did have an Audi. My new outlook: be rich, don't look it.

Thanks BH. Happy Thanksgiving!

sport
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Re: CAR: Buy new, buy used (2016), lease new

Post by sport » Thu Nov 23, 2017 12:08 pm

Here is my OPINION.
Hondas hold their value very well. So, a late model used one will cost almost as much as a new one. Leasing will be more expensive than buying and keeping a longer time. Accordingly, for your situation, I would recommend buying a new one.

chevca
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Re: CAR: Buy new, buy used (2016), lease new

Post by chevca » Thu Nov 23, 2017 12:09 pm

If you lease for 10 years, that means you have 3 or 4 different cars and a lease payment the whole time, right? Or, do you mean lease once and buy it at the end of the lease? Either way, I don't really see how leasing can be anywhere near financially equal.

I'd simply look at the difference between new and CPO pre-owned in price. If not much, I'd buy new. Better warranty and all.

Are there still new 2016s around? There's got to be killer deals on those if there are.

mhalley
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Re: CAR: Buy new, buy used (2016), lease new

Post by mhalley » Thu Nov 23, 2017 12:10 pm

After med school I always bought new cars and drove them for many years, financed at 36 months usually, kept for about 9-10 years.
Some of my reasons:
Did not want the hassle of a car repair
Did not have a “trusted mechanic” to have a used car checked out before purchase
Poor negotiator, so always felt my used car purchases were poor deals
Wanted the latest safety features
I was listening to Clark Howard yesterday and he talked about the average yearly repair bill of a 10 year old car. It was 500 or so dollars for the Japanese brands I believe.

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Watty
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Re: CAR: Buy new, buy used (2016), lease new

Post by Watty » Fri Nov 24, 2017 12:50 am

There is another thread on some of the pitfalls of leasings;

viewtopic.php?f=2&t=232795

There was one great quote in that thread; "If you want to lease a car ask your accountant, if you don't have an accountant don't lease a car."

Unless your accountant encourages you to lease then I would take leasing out of consideration.

On new vs used it really depends on the numbers that you are seeing. At some peice either choice could make sense.

One thing to watch out for is that even if there is not a major redesign the standard features will vary by model year. If the new model had better features you need to consider that when comparing prices.

rgs92
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Re: CAR: Buy new, buy used (2016), lease new

Post by rgs92 » Fri Nov 24, 2017 1:37 am

Buying it new and financing for 60 months should be fine for you. These days car dealers have good rates. PenFed and Ally are good too.

Just be sure to sit in and drive around for while to make sure it's comfy for you. Sitting in a Civic drivers seat is torture for me. The Accord and Camry drivers seats are a little better, but still not acceptable for me.

So be sure before you commit. Good luck.

msk
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Re: CAR: Buy new, buy used (2016), lease new

Post by msk » Fri Nov 24, 2017 2:13 am

Rule-of-thumb: all your family's new car acquisitions should have a value not exceeding 6 months family income. How you pay for them makes little difference overall, but beware that a $100k Mercedes that you pay $20k used will still cost you the maintenance for a $100k car (say, $3k p.a.). So, don't cheat in your arithmetic.

What I have done after my first car (bought with a loan): Bought new, paid cash, kept cars for 10 to 14 years each. Overlapped with DW's new car every 5 to 6 years or so.

OnTrack2020
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Re: CAR: Buy new, buy used (2016), lease new

Post by OnTrack2020 » Fri Nov 24, 2017 9:06 am

We were able to get a 2016 (new----had twenty miles on it) vehicle at a fairly decent discount, plus we still had the warranty. You might find one on a dealer's lot that never sold from that year. I'm not sure I would lease.

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Kenkat
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Re: CAR: Buy new, buy used (2016), lease new

Post by Kenkat » Fri Nov 24, 2017 9:18 am

sport wrote:
Thu Nov 23, 2017 12:08 pm
Here is my OPINION.
Hondas hold their value very well. So, a late model used one will cost almost as much as a new one. Leasing will be more expensive than buying and keeping a longer time. Accordingly, for your situation, I would recommend buying a new one.
I agree with this. If you are planning on keeping the car 10 years, a new Honda is a great choice. If by chance circumstances change, they hold their value well and it would be easy to sell if needed.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Fri Nov 24, 2017 11:23 am

Reached out to 4 dealers before Thanksgiving ...

Best offer so far “under” 19K for a new 2018 Civic Hatchback LX model

That’s pretty awesome ... certainly narrowing the dealers I’ll be working with. Woke up to 11 emails 2 texts 3 voicemails from dealers - it’s funny how some still refuse to email me actual offers “blah blah we’d love you to come in for a VIP price consultation blah blah”

Hope everyone had a great thanksgiving

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Fri Nov 24, 2017 1:52 pm

Would you guys suggest buying new and pay in full or put down say 4500 (combo with my Roth contribution for 10K)
and finance for around $250/275 a month ?

Paying in full seems like it’d Save around 2K in interest - but I’d be saving to build my emergency fund back up rather than contributing directly to investments for about 6 months (although the Roth counts so I guess that evens out)

I found a new 2017 for 18K / 2018 for 19K do dealers offer lower prices if you offer to pay in full ? I assume they’d rather finance for the interest

chevca
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Re: CAR: Buy new, buy used (2016), lease new

Post by chevca » Fri Nov 24, 2017 3:12 pm

The dealer doesn't get the interest. The bank does. But, I believe the dealer gets some $$ for sending the financing the banks way though.

I would pay cash, but really only because I can't stand having a car payment. I don't think I would dip into the EF to do that though. What about paying cash and holding off on the Roth contribution for 6 months?

mortfree
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Re: CAR: Buy new, buy used (2016), lease new

Post by mortfree » Fri Nov 24, 2017 3:54 pm

Do not pay in full. They will make you pay more if they know you could pay in cash.

Take the Honda financing. The dealer will be happier if you finance the purchase. Put a few thousand down to get the 250-275 per month payment.

Pay it off whenever you feel like it.

Buy new. I paid 20800 for a 2017 Accord lx. That civic lx is awfully close in price

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Sun Nov 26, 2017 5:13 pm

Leaning toward buying ...

Since I’m buying, I’d like to splurge on the Sport model (it’s prettier, slightly more power, lower / better handling) basically treat myself a little while still making the fiscally responsible choice

I’d love to have a “deal” in place prior to going back to a dealership. How does one go about doing that? I keep getting the “you’d have to come in for the best blah blah blah” deal. If I can get the 2018 Sport hatchback for around 20K it’s a done deal ... really banking on the Xmas/end of year scramble to benefit me as well

Thank you for all of your help, I love this website. I’m also waiting to hear back from my board exam certification - assuming I pass, salary bump should allow me to finance over 3 years while still investing. Best way to go?

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dm200
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Re: CAR: Buy new, buy used (2016), lease new

Post by dm200 » Sun Nov 26, 2017 5:18 pm

chevca wrote:
Fri Nov 24, 2017 3:12 pm
The dealer doesn't get the interest. The bank does. But, I believe the dealer gets some $$ for sending the financing the banks way though.
I would pay cash, but really only because I can't stand having a car payment. I don't think I would dip into the EF to do that though. What about paying cash and holding off on the Roth contribution for 6 months?
Absolutely - both dealer and the F&I (finance and insurance) guy/gal. The dealer and F&I guy will pitch/propose/offer the financing that they can convince the buyer to take based, primarily, on how many dollars the bank/credit union sends them for the loan.

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Sun Nov 26, 2017 5:26 pm

Dealer for the most part does not care how you are paying.

For a purchase - how you will pay for the car you purchase has absolutely nothing to do with getting the lowest purchase cost. How you will pay should not be part of the conversation or the negotiations unless you want to mark yourself as a sucker up front. If you are asked how you will pay say that you may pay cash or you may finance but you will decide later.

First you find a dealer that will sell the car for the lowest purchase cost. Once you have that finalized (meaning you have a written total purchase price offer accepted in hand) then you can explore payment alternatives based on that specific price.

Dealers sometimes receive a small kick back for bringing customers to a loan originator so they may want you to finance "through" them but in most instances it is a small amount so they don;t care that much. They also could care less if you pay cash or have your own financing. What they care about is selling the car and maximizing how much profit they make on that sale of the car.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Sun Nov 26, 2017 5:30 pm

jabberwockOG wrote:
Sun Nov 26, 2017 5:26 pm
Dealer for the most part does not care how you are paying.

For a purchase - how you will pay for the car you purchase has absolutely nothing to do with getting the lowest purchase cost. How you will pay should not be part of the conversation or the negotiations unless you want to mark yourself as a sucker up front. If you are asked how you will pay say that you may pay cash or you may finance but you will decide later.

First you find a dealer that will sell the car for the lowest purchase cost. Once you have that finalized you can explore payment alternatives based on that specific price.

Dealers sometimes receive a small kick back for bringing customers to a loan originator so they may want you to finance "through" them but in most instances it is a small amount so they don;t care that much. They also could care less if you pay cash or have your own financing. What they care about is selling the car and maximizing how much profit they make on that sale of the car.
Thank you. Any key terminology I need to include in that lowest finalized purchase price? I want my next trip to a dealer to be - drive the Sport, buy the Sport - with as little bs as possible.

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Sun Nov 26, 2017 6:00 pm

Once you know exactly what car you want you need to leave the dealer. You tell them the amount you want to pay for a specific make and model. Put that amount in writing via an email and ask them to reply back that they accept. The total purchase price offer amount should be listed exactly like this - I will pay $xx,xxx.xx plus tax, tag and title fee for your 2018 Honda Civic LX VIN number 97549765965 (if you know the exact car you want). It is that simple.

Do not sit there at the dealer doing this because then you have zero leverage and power in the negotiation and you show yourself to be a rube. How they fill out their own internal sales/invoice paperwork and what charges they use for their own fees is 100% irrelevant to your bottom line purchase price offer. They can make those numbers and fees anything they like it does not matter and should not be part of the conversation. You negotiate only on bottom line total purchase price plus tag, tax, and title fees.

Once you have written agreement on total purchase price plus tax, tag and title fees, then you decide how you want to pay for it.

Note - sales tax,tag and title fees are local government regulated fees and they cannot be negotiated and all dealers must charge exact same based on local laws. For example, in my location of the US sales tax on a new car is 6% and tag and title fees are $45 and $40 respectively.
Last edited by jabberwockOG on Sun Nov 26, 2017 6:08 pm, edited 1 time in total.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Sun Nov 26, 2017 6:07 pm

jabberwockOG wrote:
Sun Nov 26, 2017 6:00 pm
Once you know exactly what car you want you need to leave the dealer. You tell them the amount you want to pay for a specific make and model. Put that amount in writing via an email and ask them to reply back that they accept. The total purchase price offer amount should be listed exactly like this - I will pay $xx,xxx.xx plus tax, tag and title fee for your 2018 Honda Civic LX VIN number 97549765965 (if you know the exact car you want). It is that simple.

Do not sit there at the dealer doing this because then you have zero leverage and power in the negotiation and you show yourself to be a rube. How they fill out their own internal sales/invoice paperwork and what charges they use for their own fees is 100% irrelevant to your bottom line purchase price offer. They can make those numbers and fees anything they like it does not matter and should not be part of the conversation. You negotiate only on bottom line total purchase price plus tag, tax, and title fees.

Once you have written agreement on total purchase price plus tax, tag and title fees, then you decide how you want to pay for it.

Note - sales tax,tag and title fees are local government regulated fees and they cannot be negotiated and all dealers must charge exact same based on local laws. For exaplbe in my location sales tax on anew car is 6% and tag and title fees are $45 and $40 respectively.
Awesome. Thank you ! Hopefully I can leverage the dealer closest to me to match ... Anywhere between 20-21K for the new sport and done deal

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dm200
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Re: CAR: Buy new, buy used (2016), lease new

Post by dm200 » Sun Nov 26, 2017 7:30 pm

Note - sales tax,tag and title fees are local government regulated fees and they cannot be negotiated and all dealers must charge exact same based on local laws. For example, in my location of the US sales tax on a new car is 6% and tag and title fees are $45 and $40 respectively.
Yes - BUT the added fees charged by the dealer to send someone to DMV or do the filing online are not a requirement of law or regulation. In some cases, you could do the legwork with DMV (although I regard going in person to DMV as a form of punishment)

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Sun Nov 26, 2017 7:33 pm

So basically just throw out there “I’m willing to pay 20500 for a 2018 Civic Hatchback Sport, Black with Black interior” and have them agree via email before test driving again ?

What kinda rates am I looking at with a credit score above 800? I hate having the money in Ally and knowing I could just pay in full...

mortfree
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Re: CAR: Buy new, buy used (2016), lease new

Post by mortfree » Sun Nov 26, 2017 8:07 pm

I looked at my dealers website.

2018 civic hatchback (4 in stock)

LX: MSRP is $21575. After Instant savings $20,689

3 Sport models
MSRP is 23,175. After savings 22170
MSRP is 23,175. After 22,095.

Special financing through Honda is for the 2017 model. I didn’t see any for the 2018

My credit union has
1.49% for up to 36 months
2.49% for 37-60 months

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Sun Nov 26, 2017 8:09 pm

mortfree wrote:
Sun Nov 26, 2017 8:07 pm
I looked at my dealers website.

2018 civic hatchback (4 in stock)

LX: MSRP is $21575. After Instant savings $20,689

3 Sport models
MSRP is 23,175. After savings 22170
MSRP is 23,175. After 22,095.

Special financing through Honda is for the 2017 model. I didn’t see any for the 2018

My credit union has
1.49% for up to 36 months
2.49% for 37-60 months
Thank you! If I can get this under 21K, seems like a good deal to me ... as of now I have a vague “under 21,300” offer from a dealer

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 5:47 pm

Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Mon Nov 27, 2017 6:00 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 5:47 pm
Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least
No - nothing they say to you about how they want you to buy this car is true. Forgive me for being frank but you seem destined to get hosed on car purchases... If they refuse to give you a bottom line number walk out. Then call back and find someone who will work with you in buying a car and competing for your business on the phone. They won't really be desperate until they know you are a serious buyer and that you are smart enough to use the phone to buy a car.

Test driving has absolutely nothing to do with buying the car. Test drive the car, say thanks let them know you will be in contact with an offer and then leave. Then call back and make the offer on the car, make,model, color etc via phone to sales person - and confirm it via email in writing to the salesperson and then wait. Let them know you are shopping other dealers and have no issue traveling a couple of hundred miles to pick it up (even if this is a not necessarily true). Provide no other information about where you are shopping or what other quotes you have - it is absolutely none of their business. They have your bottom line purchase offer and they can accept it or offer a counter - it is that simple if you make it so.
Last edited by jabberwockOG on Mon Nov 27, 2017 6:09 pm, edited 1 time in total.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 6:09 pm

jabberwockOG wrote:
Mon Nov 27, 2017 6:00 pm
RRAAYY3 wrote:
Mon Nov 27, 2017 5:47 pm
Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least
No - nothing they say to you about how they want you to buy this car is true. Forgive me for being frank but you seem destined to get hosed on car purchases... If they refuse to give you a bottom line number walk out. Then call back and find someone who will work with you in buying a car and competing for your business on the phone. They won't really be desperate until they know you are a serious buyer and that you are smart enough to use the phone to buy a car.

Test driving has absolutely nothing to do with buying the car. Test drive the car, say thanks let them know you will be in contact with an offer and then leave. Then call back and make the offer on the car, make,model, color etc via phone to sales person - and confirm it via email in writing to the salesperson and then wait. Let them know you are shopping other dealers and have no issue traveling a couple of hundred miles to pick it up (even if this is a not necessarily true). Provide no other information about where you are shopping it is none of their business.
Not sure how bringing in a printed quote from another dealer is going to lead to me getting taken advantage of ... but ok

They said they will beat the 21,300 and I do have in writing they will beat it by at least $500. On top of the fact that they literally said they are desperate to reach the quota, and the fact I don’t “need” the car for another month - I like to think I have the leverage.

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Mon Nov 27, 2017 6:12 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 6:09 pm
jabberwockOG wrote:
Mon Nov 27, 2017 6:00 pm
RRAAYY3 wrote:
Mon Nov 27, 2017 5:47 pm
Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least
No - nothing they say to you about how they want you to buy this car is true. Forgive me for being frank but you seem destined to get hosed on car purchases... If they refuse to give you a bottom line number walk out. Then call back and find someone who will work with you in buying a car and competing for your business on the phone. They won't really be desperate until they know you are a serious buyer and that you are smart enough to use the phone to buy a car.

Test driving has absolutely nothing to do with buying the car. Test drive the car, say thanks let them know you will be in contact with an offer and then leave. Then call back and make the offer on the car, make,model, color etc via phone to sales person - and confirm it via email in writing to the salesperson and then wait. Let them know you are shopping other dealers and have no issue traveling a couple of hundred miles to pick it up (even if this is a not necessarily true). Provide no other information about where you are shopping it is none of their business.
Not sure how bringing in a printed quote from another dealer is going to lead to me getting taken advantage of ... but ok

Because you are giving them information that helps them and not you. And because you brought it in to them - stay out of the dealership when you are negotiating a purchase price. Do not talk purchase price in person. Let them know you are shopping other dealers and have no issue traveling a couple of hundred miles to pick it up (even if this is a not necessarily true). Provide no other information about where you are shopping or what other quotes you have - it is absolutely none of their business. They have your bottom line purchase offer and they can accept it or offer a counter - it is that simple if you make it so.

psteinx
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Re: CAR: Buy new, buy used (2016), lease new

Post by psteinx » Mon Nov 27, 2017 6:18 pm

OP:

If you really don't have any particular need for a vehicle before January 1, you may want to research your local/state tax situation, and see if delaying a transaction into the new year saves taxes/fees/etc. In my state, there are taxes on certain personal property (including cars) that are based on what you own on January 1. These taxes are not insignificant on a new vehicle...

mortfree
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Re: CAR: Buy new, buy used (2016), lease new

Post by mortfree » Mon Nov 27, 2017 8:13 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 5:47 pm
Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least
Cancel the appointment.

Who says you need to test drive the car before you negotiate on price? You are buying a brand new Honda.

Tell them you will only set foot in their dealership after a price has been agreed upon. Including taxes, fees and financing terms (out the door price). Then pick out your car and test drive it. Let them clean it up and take it home.

Sorry, but this seems to be so difficult when it shouldn’t be. I think they got you in their game and you are playing along as they expect.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 8:28 pm

mortfree wrote:
Mon Nov 27, 2017 8:13 pm
RRAAYY3 wrote:
Mon Nov 27, 2017 5:47 pm
Have a tentative appointment scheduled for tomorrow to test drive the Sport

They refuse to give me a bottom line number but did say they would beat the 21,300 quote I have elsewhere

Printed out that quote as proof ... they said they could take a $500 deposit on the car and hold it for me until I need it - is this legit ?

They flat out said they are desperate to reach their quota this month so I’m thinking I could get it for 20,500 at least
Cancel the appointment.

Who says you need to test drive the car before you negotiate on price? You are buying a brand new Honda.

Tell them you will only set foot in their dealership after a price has been agreed upon. Including taxes, fees and financing terms (out the door price). Then pick out your car and test drive it. Let them clean it up and take it home.

Sorry, but this seems to be so difficult when it shouldn’t be. I think they got you in their game and you are playing along as they expect.
I do want to test drive it ... it’s a different model/version of the car. I’m only going in because they literally told me they are desperate and accepting pretty much any offer, if I don’t like the terms, I walk out and continue shopping for another month.

If I can get the Sport model for under 21000, I don’t see how I’m getting hosed at all. I’ve literally researched everything possible about this car and have been bouncing back and forth between sales people via email. This is the best price I’ve gotten and over 1,000 cheaper than the “true car value”. Not to mention the blatant desperation from this dealer - I plan on spending closer to 20000.

I should still cancel ? My dad used to work in the business, he’s coming with and knows all the bs they try to pull. I’ve already walked out of one dealership, I’m prepared to do it again. They literally said they are “frantically” trying to hit their quota - I low ball, they don’t accept whatehe I walk out.

mortfree
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Re: CAR: Buy new, buy used (2016), lease new

Post by mortfree » Mon Nov 27, 2017 8:32 pm

I just don’t have the patience to deal with that game and time suck. I target 2 hours for start to finish on the process.

You are prepared for it so go ahead with the test drive.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 8:39 pm

I figure worst case I know whether I love the “sport” or if the LX is good enough and continue hunting

I have, in writing, a price assurance guarantee they will beat the lowest offer ($21,300) on top of the fact they have been the most persistent - and got to the point this morning of flat out saying they are desperately trying to sell the car for their quota

If I got it for $21300, still 1000+ power than “true car” says I should pay ...

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 9:44 pm

is there a general rule of thumb off MSRP to negotiate?

3D12
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Re: CAR: Buy new, buy used (2016), lease new

Post by 3D12 » Mon Nov 27, 2017 9:47 pm

Ray,

I'm the general manager at my father's Toyota store. I use this site to gain some investment knowledge, but came across your questions and out of curiosity I read the thread to see how other's felt you should purchase your new car.

I can tell you, as it is my profession, that dealers DO care if you finance. They prefer a finance deal because they do receive a small "flat" that the lending company pays the dealer to send paperwork. On top of that, when you sign all the legal paperwork at the end, dealerships try to make more money on the deal by offering extended warranty (which can also be negotiated). It is much easier for a dealership to add/sell you a warranty on your new purchase by telling you it will only increase your payment $30 per month, rather than to say it will cost you an additional $1500 cash out of pocket. A payment increase seems much more affordable than hearing the total dollar amount of the warranty (this is the MAIN reason dealers want you to finance, I promise you).

*******IF you truly just want the best price, most stores these days know how easy it is to cross-shop other dealerships with the power of the WEB. This becomes increasingly easy on brand new cars, as they can be compared truly apples to apples. If a dealership is serious about earning your business and simply selling a car without the hassle, they should give you a great price up front if you simply inquire via the internet. All you need to do is use the website's chat system or click "more information" on the specific vehicle you are looking at. The very GOOD dealers will contact you in a short amount of time starting with something along the lines of: here is the information, when can you come in to take a test drive???

All you need to do is initiate that conversation, then reply with "I am looking to purchase a new Civic LX, similar to stock number XYZ, in the next week. What is your best price on this with all of the rebates?"

A good, well-run store, knows customers in this day and age want transparency. They should also realize you are probably shopping several stores. Do this to the nearest 5 or 6 Honda dealers. You'll find out very quickly which stores are serious/upfront dealers and which ones make you jump through all of their "hoops" just to get a price!!! Any dealer who says they are trying to hit a quota or won't give you a number up front, is trying to "play the game" that doesn't need to or want to be played by you.

Good luck!! Oh, and by the way, I lease my wife the car she drives.

3D12
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Re: CAR: Buy new, buy used (2016), lease new

Post by 3D12 » Mon Nov 27, 2017 9:53 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 9:44 pm
is there a general rule of thumb off MSRP to negotiate?
A Civic most likely has about $1100-1200 of markup above invoice. It also has roughly 5% of holdback/financial reserve. This amount is money dealerships get for selling that specific vehicle at the end of the month or year depending on the brand (Honda). That would be roughly $1000 on a Civic assuming a $20000 priced vehicle.

Some aggressive dealers will use part of the holdback/reserve to earn your business. If you got $1500-2000 off the MSRP that would be a really good deal. Any manufacturer rebates (customer cash, college grad cash, etc) should be discounts IN ADDITION to that $1500-2000 off.

Good luck!

mortfree
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Re: CAR: Buy new, buy used (2016), lease new

Post by mortfree » Mon Nov 27, 2017 9:57 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 9:44 pm
is there a general rule of thumb off MSRP to negotiate?
You should negotiate off of invoice price. Not MSRP

skierrex
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Re: CAR: Buy new, buy used (2016), lease new

Post by skierrex » Mon Nov 27, 2017 10:16 pm

I'd go drive it and make sure you like it.
If it was me, I'd get the very newest model with the most safety features.
I would 'advertise' to all the dealers in your state that you want a car. I'd use AAA, Costco, Edmunds, and all of their individual
websites.
I would know exactly what model, options, and colors you are interested in.
I would squeeze the top 3 for their best deal, using the others for leverage.
After less than a week, I would go pick it up and make sure their paperwork matches what you signed up for.
I don't think 4 cylinder Honda's have any need for an extended warranty, but I would buy one for a larger car with a 6 cylinder.

RRAAYY3
Posts: 194
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 10:25 pm

3D12 wrote:
Mon Nov 27, 2017 9:47 pm
Ray,

I'm the general manager at my father's Toyota store. I use this site to gain some investment knowledge, but came across your questions and out of curiosity I read the thread to see how other's felt you should purchase your new car.

I can tell you, as it is my profession, that dealers DO care if you finance. They prefer a finance deal because they do receive a small "flat" that the lending company pays the dealer to send paperwork. On top of that, when you sign all the legal paperwork at the end, dealerships try to make more money on the deal by offering extended warranty (which can also be negotiated). It is much easier for a dealership to add/sell you a warranty on your new purchase by telling you it will only increase your payment $30 per month, rather than to say it will cost you an additional $1500 cash out of pocket. A payment increase seems much more affordable than hearing the total dollar amount of the warranty (this is the MAIN reason dealers want you to finance, I promise you).

*******IF you truly just want the best price, most stores these days know how easy it is to cross-shop other dealerships with the power of the WEB. This becomes increasingly easy on brand new cars, as they can be compared truly apples to apples. If a dealership is serious about earning your business and simply selling a car without the hassle, they should give you a great price up front if you simply inquire via the internet. All you need to do is use the website's chat system or click "more information" on the specific vehicle you are looking at. The very GOOD dealers will contact you in a short amount of time starting with something along the lines of: here is the information, when can you come in to take a test drive???

All you need to do is initiate that conversation, then reply with "I am looking to purchase a new Civic LX, similar to stock number XYZ, in the next week. What is your best price on this with all of the rebates?"

A good, well-run store, knows customers in this day and age want transparency. They should also realize you are probably shopping several stores. Do this to the nearest 5 or 6 Honda dealers. You'll find out very quickly which stores are serious/upfront dealers and which ones make you jump through all of their "hoops" just to get a price!!! Any dealer who says they are trying to hit a quota or won't give you a number up front, is trying to "play the game" that doesn't need to or want to be played by you.

Good luck!! Oh, and by the way, I lease my wife the car she drives.
Thank you ! I emailed them requesting a final price. Perhaps I’ll call again during work and request to speak directly to a salesman? All I’ve been told is they will beat any offer by at least $300 ... so I’m thinking 21000 is the max price and can go even lower if they are as truly desperate to reach that quota as possible. I’ve “played the game” with all other dealers and “under 21300” was the only quote I could get.

I also have until early January before its officially a “need”, so why not see what there is to offer from a “desperate” dealer. I’m walking in just as I did another dealer, doing my due diligence and certainly not impulsive shopping.

(Any reason you chose to lease? I’m thinking if I can get the Sport for under $290 including tax with $0 down I may go that route - I’ll see what the financing terms are.)

21000 for new car MSRP of 22,300 isn’t a terrible deal, right?

RRAAYY3
Posts: 194
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 10:29 pm

skierrex wrote:
Mon Nov 27, 2017 10:16 pm
I'd go drive it and make sure you like it.
If it was me, I'd get the very newest model with the most safety features.
I would 'advertise' to all the dealers in your state that you want a car. I'd use AAA, Costco, Edmunds, and all of their individual
websites.
I would know exactly what model, options, and colors you are interested in.
I would squeeze the top 3 for their best deal, using the others for leverage.
After less than a week, I would go pick it up and make sure their paperwork matches what you signed up for.
I don't think 4 cylinder Honda's have any need for an extended warranty, but I would buy one for a larger car with a 6 cylinder.
Thank you. I’ve done all of the above ... to the point my girlfriend complains about my new “obsession”.

Before this it was investing in general , but now all my money is on autopilot (thank you BH!) - moving on to my new obsession - understanding the auto business.

Hopefully all goes well tomorrow and I can move on to my next obsession. This is pretty much how I approach new things I’m interested in. Not sure if it’s good, but I’ve become quite knowledgable of the business this past week. My dad used to work it as well, he’s coming with!

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Watty
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Re: CAR: Buy new, buy used (2016), lease new

Post by Watty » Mon Nov 27, 2017 10:33 pm

3D12 wrote:
Mon Nov 27, 2017 9:47 pm
Ray,

I'm the general manager at my father's Toyota store. I use this site to gain some investment knowledge, but came across your questions and out of curiosity I read the thread to see how other's felt you should purchase your new car.

I can tell you, as it is my profession, that dealers DO care if you finance. They prefer a finance deal because they do receive a small "flat" that the lending company pays the dealer to send paperwork. On top of that, when you sign all the legal paperwork at the end, dealerships try to make more money on the deal by offering extended warranty (which can also be negotiated). It is much easier for a dealership to add/sell you a warranty on your new purchase by telling you it will only increase your payment $30 per month, rather than to say it will cost you an additional $1500 cash out of pocket. A payment increase seems much more affordable than hearing the total dollar amount of the warranty (this is the MAIN reason dealers want you to finance, I promise you).

*******IF you truly just want the best price, most stores these days know how easy it is to cross-shop other dealerships with the power of the WEB. This becomes increasingly easy on brand new cars, as they can be compared truly apples to apples. If a dealership is serious about earning your business and simply selling a car without the hassle, they should give you a great price up front if you simply inquire via the internet. All you need to do is use the website's chat system or click "more information" on the specific vehicle you are looking at. The very GOOD dealers will contact you in a short amount of time starting with something along the lines of: here is the information, when can you come in to take a test drive???

All you need to do is initiate that conversation, then reply with "I am looking to purchase a new Civic LX, similar to stock number XYZ, in the next week. What is your best price on this with all of the rebates?"

A good, well-run store, knows customers in this day and age want transparency. They should also realize you are probably shopping several stores. Do this to the nearest 5 or 6 Honda dealers. You'll find out very quickly which stores are serious/upfront dealers and which ones make you jump through all of their "hoops" just to get a price!!! Any dealer who says they are trying to hit a quota or won't give you a number up front, is trying to "play the game" that doesn't need to or want to be played by you.

Good luck!! Oh, and by the way, I lease my wife the car she drives.
That is a great post.

The last two times I bought a new car I did it over the internet and had a "done deal" with an "out the door" price before I went to the dealership. This will vary a lot but I found that about a third of the dealers were not really interested in dealing over the internet and just wanted you to come in, about a third gave high(ish) prices but seemed likely to dicker, and a third of the dealers were really good with dealing on the internet with minimal BS.

You can buy the car at any dealer and then have it serviced at the most convenient dealer. I asked a service manager about this once and he genuinely seemed happy to get my warranty business even though I bought the car at another dealership. A new car like a Honda or Toyota will likely need minimal warranty service anyway unless you get unlucky. The last car I bought was a Honda and I only took it in once for a cosmetic warranty repair a month or so before the full warranty ended.

If you do decide that you want a manufacturer's extended warranty for some reason you can buy it at any time before full warranty expires from any dealer in the country and there may be a dealer on the other side of the country that would be willing to sell you one with a modest markup, but this will vary by manufacture. If you do not buy one you will get lots of mail for the next three years with offers to sell you one. Most new cars come with a five year powertrain warranty so many of the most expensive problems are already covered.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 10:57 pm

Great to know regarding maintenance

I have a dealership 5 minutes away ... nice to know I can use them even if I buy further away

3D12
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Re: CAR: Buy new, buy used (2016), lease new

Post by 3D12 » Mon Nov 27, 2017 11:05 pm

RRAAYY3 wrote:
Mon Nov 27, 2017 10:57 pm
Great to know regarding maintenance

I have a dealership 5 minutes away ... nice to know I can use them even if I buy further away

Most dealers are happy to do your service warranty work as they get paid to do it. It is a still a form of revenue/profit in another department of their store. However, NOT buying from your local dealer could result in them treating you less important than their local buyers. Example: if a customer bought their car from you, they would make sure you get a loaner when you need one. If you bought out of town and no loaners are available, tough luck!


Again, this is why I would recommend getting the best price and seeing if your local dealer would match to keep the business local. Not to mention I would feel a little guilty riding around with an out of town dealer's sticker when you're in your home town....... but if your local deal is a really poor dealer anyway, then I wouldn't care.

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Mon Nov 27, 2017 11:23 pm

Makes absolutely no difference to the service department where you purchased your car. In virtually every dealer, the service department,the new car sales, and the used car sales department are run as three entirely separate entities (and cost/profit centers) within the dealer. I recently moved 800 miles to a new town. The local Lexus service department in my new town was extremely happy to see a new customer. They could not care less where I had purchased my car.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Mon Nov 27, 2017 11:54 pm

3D12 wrote:
Mon Nov 27, 2017 11:05 pm
RRAAYY3 wrote:
Mon Nov 27, 2017 10:57 pm
Great to know regarding maintenance

I have a dealership 5 minutes away ... nice to know I can use them even if I buy further away

Most dealers are happy to do your service warranty work as they get paid to do it. It is a still a form of revenue/profit in another department of their store. However, NOT buying from your local dealer could result in them treating you less important than their local buyers. Example: if a customer bought their car from you, they would make sure you get a loaner when you need one. If you bought out of town and no loaners are available, tough luck!


Again, this is why I would recommend getting the best price and seeing if your local dealer would match to keep the business local. Not to mention I would feel a little guilty riding around with an out of town dealer's sticker when you're in your home town....... but if your local deal is a really poor dealer anyway, then I wouldn't care.
I’ve reached out to all the dealers again. It’s new car with a reliable reputation and a unique blend of “fun to drive” with a roomy feel / lots of storage (I felt more comfortable driving the Lx than in my Jeep Grand Cherokee believe it or not) so I’m not expecting much better than 20-21K final price. I haven’t heard back from my original dealer I drove the Lx at - wonder if they hit their quota and couldn’t care less. 2 dealers have beans all over me - one gave me the 21,300 quote, another has guaranteed to beat that, by at least 300. I’m aiming for 20,050 total cost and I’ll be happy.

Any insight on financing rates? My score is 819, just trying to see what a good rate will be. I may lease if I get 0 down and a payment between 250-290, not opposed to financing for 3 years either of the rates are good. Figure a larger payment for same length as a lease gives me an “asset” to sell at the end if I don’t like it or it’s already paid off and I take care of it for a decade+.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Tue Nov 28, 2017 12:01 am

Forgot ... I was told “if I qualify” financing available as low as .9 % from another dealer

Is that something that can be negotiated with another dealer? Might as well screenshot / print that I guess

The dealer that gave me the “under 21,300” also refuses to give me a final price because “of all the other variables and company policy blah blah blah” so I’m kinda turned off by them ...

I did print out the “under 21,300” offer and have price assurance guarantee from dealer I’ll be visiting tomorrow ... gonna try and play them against each other as much as possible. Ideally I’d go back to my local dealer like I said I would (I like to think I’m a man of my word), but they haven’t really been reaching out / responding so idk

charis23
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Re: CAR: Buy new, buy used (2016), lease new

Post by charis23 » Tue Nov 28, 2017 1:42 am

OP, seems like I was in your shoes just 2 months ago. I pulled the trigger and bought a 2017 Civic EX (w/ Sensing) a couple months ago. I love the car by the way.

I basically did a few rounds of online negotiation before going into a dealer. Just to give you a benchmark, this was what I was able to get:
  • MSRP: $23,015
  • Pre-tax price: $20,000 (13% below MSRP)
  • OTD Price (after taxes and fees: $21,916
My learnings after dealing with the southern California dealers near me is to clarify what price they are quoting you, is it a pre-tax price or is it the OTD price? You need to make sure you are doing an apples to apples comparison across dealers. I personally found it easier to deal with the pre-tax price since the dealers seems to have that number more readily available.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Tue Nov 28, 2017 2:13 am

If I lease

0 down, 250-290 month 36 months / 12K miles

If I buy

4500 down, finance for 36 months

If I calculated correctly I could sell the car in 3 years if I’m sick of it for a net loss of $8000 (way cheaper than lease), if I love the car it’s mine for a decade

I will likely finance, I would like to keep the monthly payments for that to around $500/month for 36 months

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jabberwockOG
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Re: CAR: Buy new, buy used (2016), lease new

Post by jabberwockOG » Tue Nov 28, 2017 7:34 am

RRAAYY3 wrote:
Tue Nov 28, 2017 2:13 am
If I lease

0 down, 250-290 month 36 months / 12K miles

If I buy

4500 down, finance for 36 months

If I calculated correctly I could sell the car in 3 years if I’m sick of it for a net loss of $8000 (way cheaper than lease), if I love the car it’s mine for a decade

I will likely finance, I would like to keep the monthly payments for that to around $500/month for 36 months


Before you start the process of negotiating for and buying a car go to a couple of local banks and credit unions. If you have an online bank - call them and ask what rate and amount car loan you qualify for based on your credit and assists, etc. Takes just a little effort to find out exactly what the rates, amounts and payments would be for your (ballpark figure) car loan from multiple sources. Getting a 36 month loan is very smart, most get 48,60, or 72 month loans these days and insure they stay in debt basically forever.

Also call Penn Fed, PNC Bank, and Chase based on previous recommendations I have seen on the board.

And btw the old "I'll guarantee we beat your lowest quote by $500 so come to us when you are ready to buy" is nothing but a very old and tired basic sales 101 trick used on gullible consumers to avoid actually having to competitively win your business. They guarantee nothing other than gullible customers will show up with their lowest quote at their dealership ready to buy (so they have already won by controlling you and your actions). Then the games begin and they to lie and manipulate you (retaining both control and leverage) into staying right there, investing more of your time, until you break down and buy the car from them rationalizing any difference in the quote with lots more of their BS. The amazing thing is most folks then walk away from this experience telling their friends what a great deal they got and how they really worked the sales folks over to get it. Nothing could be further from the truth.

RRAAYY3
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Tue Nov 28, 2017 8:19 am

I slept terribly and will no longer be in that dealerships area today so i’m cancelling ...

Honestly, I haven’t been able to get an actual price to be presented / agreed upon from over 5 dealerships and I’m at a loss with getting the “best deal”

Do I call and make an offer and if it’s accepted go or just hang up? I’m not getting much done via email - only number I’ve gotten is the under 21300

RRAAYY3
Posts: 194
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Re: CAR: Buy new, buy used (2016), lease new

Post by RRAAYY3 » Tue Nov 28, 2017 8:40 am

Maybe I could say the under 21300 quote included everything ? It’s the only number I have to really shop around with

Doing the math I see I can “breakdown” the number to include a 19000 sell price, + car max guide to all the fees (+1575) + doc fee + XX to add up for “under 21300”

Do I make an offer for 19000 in an email/on the phone/ I could pop into my local dealer again and present the offer it’s 5 minutes away from my house

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