My new car buying experience.

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Watty
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My new car buying experience.

Post by Watty »

I bought a new car yesterday and I thought I would share my experience since there are so many questions about car buying. I am mostly not giving specific numbers since that can vary by where you are at.

I had a 2010 Honda Fit which I planned on keeping a few years longer but in another thread it was mentioned that there was a 0% financing promotion for Corollas and that the Toyota has put a lot of the newest safety features into all of its car models including automatic breaking when you are about to hit something.

A base model standard Corolla has a surprisingly long laundry list of other advanced safety features like lane departure warning where if you drift over the line it was warn you an even nudge you back into your lane. I had not been follow the new car models and frankly I was surprised that you could get so many of the new safety features in a fairly modest car.

The 2010 Honda Fit did not even have ESC so replacing it a few years early made sense not only for the safety features but I had bought it before I retired as a commuter car and we are planning a few long load trips which would be uncomfortable in the Fit.

Comparable cars like the Civic or Elantra did not have nearly as many safety features and getting more safety features seem to quickly drive up the price so I was not really tempted by them.

The 0% financing sounded interesting even though I could pay cash since I am retired and need to manage my income for the next few years to get the ACA subsidy. There was no mention of having to give up a rebate to get the 0% financing so I thought there was a chance it was a real deal. That was not the case and when I got into the negotiations it was clear that the 0% financing cost the dealer $1,500 so they just charged $1,500 if you took the 0% financing.

I am in the Suburbs of Atlanta where there are lots of Toyota dealers. Here it the car purchase process I used.

On Monday I went to the closest Toyota dealer and took a Corolla LE for a test drive. I let the salesperson know that I was still shopping and asked for their best offer. To put pressure on him I also told him that still I needed to test drive a Civic and Elantra which had better reviews(which is true) so I would need to have a really good price to buy a Corolla.

He came back with a quote that included several high costs for things like nitrogen in the tires, window tinting, etc. I was not surprised and I zeroed in on those and was irritated but (mostly) polite and thanked him for his time and left with the piece of paper with the details of his offer. What I did not realize though was since I was so focused on the junk fees was that right below the junk fees was a large discount number and while not spectacular his overall offer was not all that bad. They had pumped up the price just so they could show a huge discount.

After test driving the Corolla I was ready to buy one so I started my internet shopping.

Some of the forms on the dealer web sites where you request quotes required a phone number so I set up a Google voice number. I had not used that before and it is really slick since by changing a few setting I was able to set it up to take a voice message when I got a call and it would email me a transcription of the voice mail.

I also set up a new temporary Gmail account to give the sales people.

I Googled “Toyota dealer near me” to get a map of the Toyota dealers near me. There were a couple that showed up that I did not know about. There were about ten within an hours drive of me in the Atlanta traffic.

I went their web sites and requested a quote for a specific trim level (LE), a color, and specified that I wanted no other options. I also said that I was ready to buy a car and was just shopping for price. I also said that I wanted to deal just by email. I was clear that I wanted the out the door price.

Within minutes I started getting voice mails asking for me to come in and talk, I ignored those. Withing a few hours I started getting emails with various emails that either gave quotes or asked me to come in. Some of the quotes were high so I followed up with some questions and it became clear that the 0% financing would cost $1,500.

Compared the original quote I got when I took the test drive the out the door quotes ranged from a couple of hundred dollars below it to a couple of thousand dollars above it. About a third of the dealers were willing to give reasonably low quotes on the internet.

I kept a spreadsheet with a list of the dealers that I had contacted and their response. A few of them were slow to respond which I assume was because their main internet sales person was off on Monday after having worked the weekend. On Wednesday morning I got the first email from a smaller dealership which was one of the farthest away asking for me to come in and talk. After a couple of emails letting her know that I wanted a “done deal” before I drove all the way up there she came back with an offer that was about $500 lower than the best I had seen. I am sure that was in part because she knew that I would have to drive a long way.

That price was good enough for me so I called up the salesperson I had taken the original test drive with to see if he could match that. I figured since he had spent the time with me it was reasonable to give him that chance. He said to come in and they would see what they could do but by the tone in his voice I could tell that he likely would but just didn’t want to commit to it if I was going to keep shopping for a better price. I went in and they agreed to match it. This was about $850 below his first offer.

The final price with everything but taxes and license plates was about 23% below MSRP. According to Trucar it was rated as “exceptional”. Both of those of course have lots of problems and I am sure that someone has paid less but I am pretty confident that it was a reasonably good price.

The Honda Fit had been in three fender benders(wife one, strangers 2, me 0 :happy ) and the power door locks were not working. I have sold cars before without any problems but I was not looking forward to selling that car with those issues. I had talked to my insurance company and I would have also had to get a new insurance policy to keep it covered if I did not sell it in 14 days. Out of curiosity after the new car purchase dealing was done. I asked for a quote for a trade in. The quote that they gave me was of course a wholesale price but in my state I would also save 7% of that in taxes. I decided to trade it in. Between saving on the insurance and taxes I figure trading it in probably cost me at most $500 but it also eliminated the chance of problems or having to eventually sell the Fit for less than hoped for.

In chatting with the salesman and important factor in what they can offer for a trade is how fast it will sell and it sounds like the a Honda Fit will quickly sell.

They needed to get the color car I wanted from a different dealership so we set up a time for me to pick it up on Friday.

The only glitch was that I had decided to finance part of it through my credit union, PenFed, to help manage my income for the ACA subsidy. They were mailing me a check but I had not received it by Friday. This meant that I needed to have the dealership write up a backup loan. I had my credit unfrozen so that was not a problem but the credit bureau also asks three or four obscure questions about things like past addresses or account payments. I figured it out later on but one of my questions was about a street address of an apartment I had lived in for about 8 months in 1986. It was something like 113th street and they gave options for that for question like 103rd , 118th, etc. and I had totally forgotten about that apartment until later so I just said “none of the above” . They gave you a second chance with equally obscure questions and I failed that too. At that point I needed to show additional ID like a passport. Instead of having me go home and get it then they just let me have the car with temporary paperwork and I will bring in the check from my credit union when I get it to get the final paperwork.

A few lessons learned;

1) Keep focused on the out the door price.
2) Get quotes from dealerships that are farther way than you would really want to drive, they may give better deal to get your business.
3) Get your financing and funds set up ahead of time.
4) Consider taking your passport with you as additional ID. Even if you are paying by check they will be concerned about identity theft.

This is the third new car I have bought through the internet like this and it has been fairly painless each time.
Last edited by Watty on Mon Jan 29, 2018 9:09 am, edited 3 times in total.
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eye.surgeon
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Re: My new car buying experience.

Post by eye.surgeon »

Nice job.

I hope it doesn't actually have automatic breaking though, that would be inconvenient.
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Re: My new car buying experience.

Post by Y.A.Tittle »

I don't buy cars often, but when I do I pay cash.

There are few things as gratifying as writing a check for the amount I'm willing to pay and saying, "This is it. Do you want it or not?" If they say no, take the check and walk away without looking back. I've had salepeople chase me into the parking lot asking "How can you do that?"

Just did this a few weeks ago to catch the 2017 sales tax deduction.

Stay thirsty my friends.
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Watty
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Re: My new car buying experience.

Post by Watty »

eye.surgeon wrote: Sat Jan 27, 2018 12:10 pm Nice job.

I hope it doesn't actually have automatic breaking though, that would be inconvenient.
Fortunately Toyota, unlike some other brands that, has not mastered that feature.
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dm200
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Re: My new car buying experience.

Post by dm200 »

Watch for "processing fees" added after you (think) a deal is final. Applicable sales tax is different, BUT double check they do the calculations correctly.

In my experience in buying a new car, to get a "good deal" avoid buying (even if a bargain) model upgrades and features you do not want/need and to pay extra for,
denovo
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Re: My new car buying experience.

Post by denovo »

How did you end up financing the vehicle? What rate?
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Watty
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Re: My new car buying experience.

Post by Watty »

denovo wrote: Sat Jan 27, 2018 3:58 pm How did you end up financing the vehicle? What rate?
I used PenFed for a five year loan at 2.99% for the balance that was not covered by the trade in. I have a great credit score and the dealership could not beat that. I used a five year loan to keep the payments low.

I will pay it off early in a few years when I get under Medicare and don't need to worry about the ACA subsidy anymore.

Paying cash would have required more withdrawals from an IRA which cause problems with the ACA subsidy.

The ACA problems are;
1) If I exceed a certain dollar cut off by one dollar I lose the entire subsidy.
2) My ACA premium is limited to 9.56% of my income so every extra dollar withdrawn from my IRA would cost me 9.56%.
meebers
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Re: My new car buying experience.

Post by meebers »

Nice review Watty. :happy
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Toons
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Re: My new car buying experience.

Post by Toons »

Enjoy your new ride.
Nice review of your experience.

:wink:
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rgs92
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Re: My new car buying experience.

Post by rgs92 »

I thought about PenFed but the Lexus dealer gives 2.9% for 5 years on pre-owned larger ones like the LS (or 1.9% on smaller pre-owned models also for 5 years).
oakfan52
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Re: My new car buying experience.

Post by oakfan52 »

Bought two cars in the last few years. Did them both very similar to the OP. Test drove and then communicated via text/email on a google voice account only. The key is getting quotes from enough dealers. At around 6 or 7 is where we found a dealer that one would give a price that no one else wanted to match. I only gave each dealer one opportunity to beat the lowest price. I didn't want to keep going back and forth with the dealers. I was ready to buy. One car we actually had to drive 90 minutes to pickup but they were $1500 cheaper than anyone else. Then they found out we were eligible for another $500 loyalty rebate. They could have kept it and adjusted the price. They didn't so we got an excellent deal. When I bought my Mazda 3 it was so easy. Two days of text/email and a close dealer was willing to beat the lowest price. They had to get the car from another dealer. I drove to the dealer 15 minutes away. They had all the paperwork ready. I brought my proof on insurance. Signed all the paperwork and I was in/out in less than 30 minutes. Car showed up at my door the next day.
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Re: My new car buying experience.

Post by Sandtrap »

Great job!
Thanks for sharing the experience.
Buying a car "boglehead" style 101.
Should be a "wiki".
Forwarded it to some of my friends who'd rather pay top dollar to avoid the "hassle".. . same ones that pay AUM fees. :shock:
Enjoy your new ride.
j :D
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Re: My new car buying experience.

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oakfan52 wrote: Mon Jan 29, 2018 12:21 am Bought two cars in the last few years. Did them both very similar to the OP. Test drove and then communicated via text/email on a google voice account only. The key is getting quotes from enough dealers. At around 6 or 7 is where we found a dealer that one would give a price that no one else wanted to match. I only gave each dealer one opportunity to beat the lowest price. I didn't want to keep going back and forth with the dealers. I was ready to buy. One car we actually had to drive 90 minutes to pickup but they were $1500 cheaper than anyone else. Then they found out we were eligible for another $500 loyalty rebate. They could have kept it and adjusted the price. They didn't so we got an excellent deal. When I bought my Mazda 3 it was so easy. Two days of text/email and a close dealer was willing to beat the lowest price. They had to get the car from another dealer. I drove to the dealer 15 minutes away. They had all the paperwork ready. I brought my proof on insurance. Signed all the paperwork and I was in/out in less than 30 minutes. Car showed up at my door the next day.
Sounds like you got a great deal with the least hassle.
Did the same thing when buying my 2012 Toyota Tundra, new, in cash. Whittled 13 dealers via email down to 2. Went to pick it up, tried to haggle more but didn't work though did get some free stuff thrown in. It's certainly worth the effort.
j
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Sockpuppet
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Re: My new car buying experience.

Post by Sockpuppet »

Sandtrap wrote: Mon Jan 29, 2018 12:31 am
oakfan52 wrote: Mon Jan 29, 2018 12:21 am Bought two cars in the last few years. Did them both very similar to the OP. Test drove and then communicated via text/email on a google voice account only. The key is getting quotes from enough dealers. At around 6 or 7 is where we found a dealer that one would give a price that no one else wanted to match. I only gave each dealer one opportunity to beat the lowest price. I didn't want to keep going back and forth with the dealers. I was ready to buy. One car we actually had to drive 90 minutes to pickup but they were $1500 cheaper than anyone else. Then they found out we were eligible for another $500 loyalty rebate. They could have kept it and adjusted the price. They didn't so we got an excellent deal. When I bought my Mazda 3 it was so easy. Two days of text/email and a close dealer was willing to beat the lowest price. They had to get the car from another dealer. I drove to the dealer 15 minutes away. They had all the paperwork ready. I brought my proof on insurance. Signed all the paperwork and I was in/out in less than 30 minutes. Car showed up at my door the next day.
Sounds like you got a great deal with the least hassle.
Did the same thing when buying my 2012 Toyota Tundra, new, in cash. Whittled 13 dealers via email down to 2. Went to pick it up, tried to haggle more but didn't work though did get some free stuff thrown in. It's certainly worth the effort.
j
Email works wonders. I basically followed the strategy of the OP and got 25% off MSRP.
123
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Re: My new car buying experience.

Post by 123 »

Thank you for taking the time to write such a thorough narrative. One of our cars is an older Corolla and I've been thinking about upgrading to a new one so your details were particularly appreciated.
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Watty
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Re: My new car buying experience.

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123 wrote: Mon Jan 29, 2018 12:48 am Thank you for taking the time to write such a thorough narrative. One of our cars is an older Corolla and I've been thinking about upgrading to a new one so your details were particularly appreciated.
Watch out, buying cars is contagious. :D There was a different thread about Corollas that got me looking at buying one.

If you have not looked at one yet be aware that carmakers tend to gradually make cars larger and my new Corolla is much larger than a 1990's Corolla that I had, it is about the size of an early 2000's Camry that I also had. If you take a look at the smaller Yaris be sure to check out the details of the safety package since it is a bit different than the one they use in the most of the larger Toyota's.
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Re: My new car buying experience.

Post by mbres60 »

Thanks for the info. My dd did it this way some years ago and it took all the hassle out of car buying. One question I have is... the dealer you do the test drive with... I assume you can't then go through the internet dept. If that is the case then I guess one would have to choose wisely as to which dealer not to use the internet dept but instead test drive and get a quote through a salesperson.
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Re: My new car buying experience.

Post by neilpilot »

A couple years ago I followed almost the same process as the OP, except I never gave a phone number. When they asked, I simply told the dealer via email that I would evaluate their out-the-door offers and call the dealer that I selected. The total process took about a week, and it worked very well.

I was shopping for a car about 1000 miles from my home, for my daughter that was about to relocate from NYC to Phoenix. She ended up stopping by the dealer and purchasing the car one day after arriving in Phoenix.
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Watty
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Re: My new car buying experience.

Post by Watty »

mbres60 wrote: Mon Jan 29, 2018 9:20 am Thanks for the info. My dd did it this way some years ago and it took all the hassle out of car buying. One question I have is... the dealer you do the test drive with... I assume you can't then go through the internet dept. If that is the case then I guess one would have to choose wisely as to which dealer not to use the internet dept but instead test drive and get a quote through a salesperson.
I agree that you should not try to use the internet department at the dealership where you took the test drive. There are so many Toyota dealers near me that it didn't really make much difference since as far as I know they all are more or less the same. In a smaller city or rural area I can see where that could be important, but it seems like you are likely to get better offers from dealers that are farther away so doing the test drive at the nearest one could make sense.

You can get your warranty service done at any Toyota dealership so it doesn't matter a lot where you buy it unless they throw in something like free oil changes at the dealership where you buy the car.

With one of my prior cars was I talking with a service manager and I asked about this and he said that they were glad to get the warranty work and it didn't matter to him where you bought the car and he seemed genuine when he said that. If anything treating you well might encourage you to buy your next car there so this makes sense. My impression was that there was no love lost between the service and sales departments.
neilpilot wrote: Mon Jan 29, 2018 9:26 am A couple years ago I followed almost the same process as the OP, except I never gave a phone number. When they asked, I simply told the dealer via email that I would evaluate their out-the-door offers and call the dealer that I selected. The total process took about a week, and it worked very well.
Some of the dealer websites that I ran into had a form to request for a quote that actually required a phone number and would not let you submit it without one. It seemed easier to just put in the Google voice number than to try to work around that.
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Re: My new car buying experience.

Post by cyberpainter »

I am about to use this advice by writing to a lot of mazda dealers in the vicinity for their best out the door price. I won't use the online form, only a direct email to the dealership. A few I have their cards and will use those, others will just be to the dealership. I will get the consumer report numbers first. I'm glad to have happened upon this forum.
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Re: My new car buying experience.

Post by PinotGris »

Thank you for this great write up. We are in the market for a new car, it will replace the Lexus that I have which is 12 years old. I am going to duplicate your method to shop for price. We will pay cash so I like that idea of walking in with a check :happy
This Google voice - what is that? We have a land line phone - I don't give out my cell number. Why would getting Google voice be better than using the voicemail screen that my land line provides?
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Watty
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Re: My new car buying experience.

Post by Watty »

chabil wrote: Mon Jan 29, 2018 4:07 pm Thank you for this great write up. We are in the market for a new car, it will replace the Lexus that I have which is 12 years old. I am going to duplicate your method to shop for price. We will pay cash so I like that idea of walking in with a check :happy
This Google voice - what is that? We have a land line phone - I don't give out my cell number. Why would getting Google voice be better than using the voicemail screen that my land line provides?
Google voice is free phone number that you can get and then decide if it will be forwarded to your real number or automatically sent to voicemail. The advantage is that your real phone will not ring dozens of times as they try to convince you to come in. Only a third or a quarter of the dealers were really willing to deal by email.
cyberpainter wrote: Mon Jan 29, 2018 3:03 pm I am about to use this advice by writing to a lot of mazda dealers in the vicinity for their best out the door price. I won't use the online form, only a direct email to the dealership. A few I have their cards and will use those, others will just be to the dealership. I will get the consumer report numbers first. I'm glad to have happened upon this forum.
I don't know much about how dealerships work but I would really try to deal with their designated internet sales person.
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Re: My new car buying experience.

Post by neilpilot »

Watty wrote: Mon Jan 29, 2018 8:14 pm
Only a third or a quarter of the dealers were really willing to deal by email.

I'm only one data point, but 75% of the dealers I contacted when I was shopping for a Honda in the Phoenix area responded. I contacted 8 dealers, and 6 replied with OTD pricing. Of those 6, 4 responded with a second round of price reductions. None of those dealers had my phone number or any way to contact me other than via email.
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Re: My new car buying experience.

Post by michaeljc70 »

I think getting 1/3 to respond wilh an actual price is good. I had a lot of calls to call them back and try to get you to come in. When they know you are really shopping online they know they probably won't make much money. Several ignored my specifications (options/color) completely. Overall, car dealers seem to be very reluctant with internet buyers.
Last edited by michaeljc70 on Mon Jan 29, 2018 11:12 pm, edited 1 time in total.
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Re: My new car buying experience.

Post by yukonjack »

Thanks for posting your experience. I’ll be doing the same thing this weekend. The Google voice idea is one I hadn’t thought of but will certainly give it a try. This will be my first shot at buying a newly updated vehicle (2018 Accord) so I’m not anticipating much room for haggling.
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Re: My new car buying experience.

Post by Golf maniac »

Only additional advice I would give is try and rent the car for a week to test drive. I found out the hard way. My DW fell in love with the Nissan Rogue, the only problem was after driving for more than 30 minutes her back began killing her. Needless to say, very costly for us to trade in a one week old car. The dealer was happy to see us again on such short notice.
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Re: My new car buying experience.

Post by Watty »

michaeljc70 wrote: Mon Jan 29, 2018 9:03 pm I think getting 1/3 to respond wilh an actual price is good. I had a lot of calls to call them back and try to get you to come in. When they know you are really shopping online they know they probably won't make much money. Several ignored my specifications (options/color) completely. Overall, car dealers seem to be very reluctant with internet buyers.
The response rate likely varies a lot depending on the model and the current market conditions.
123
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Re: My new car buying experience.

Post by 123 »

Watty wrote: Mon Jan 29, 2018 9:01 am ...If you have not looked at one yet be aware that carmakers tend to gradually make cars larger and my new Corolla is much larger than a 1990's Corolla that I had, it is about the size of an early 2000's Camry that I also had. If you take a look at the smaller Yaris be sure to check out the details of the safety package since it is a bit different than the one they use in the most of the larger Toyota's.
You hit the nail on the head. While I really love my old Corolla the new ones are 10 - 12 inches longer than what I'm used to. I've been thinking of alternatives, including the Yaris. The larger size is the main thing that has prevented me from getting a new Corolla. In my area parking is at a premium and we've got streets and curbs (especially driveway cutouts) that were established a long time ago. If I got a car that was one foot longer it would reduce my street parking options in my neighborhood by 50% or more. The spouse wouldn't be able to accept a hatchback, she'd be worried about the lack of a "secure" (such as they are) trunk.
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Re: My new car buying experience.

Post by surfstar »

For my "number" I always used "867-5309" - I think less than 5% of the sales people got it. They always would email saying that they tried to call and my number didn't work - duh :oops:
cyberpainter
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Re: My new car buying experience.

Post by cyberpainter »

Watty wrote: Mon Jan 29, 2018 8:14 pm
cyberpainter wrote: Mon Jan 29, 2018 3:03 pm I am about to use this advice by writing to a lot of mazda dealers in the vicinity for their best out the door price. I won't use the online form, only a direct email to the dealership. A few I have their cards and will use those, others will just be to the dealership. I will get the consumer report numbers first. I'm glad to have happened upon this forum.
I don't know much about how dealerships work but I would really try to deal with their designated internet sales person.
I assume an email would be directed to the appropriate person. As it turns out though, most dealers in my area just offer an online form on their website, which I don't really want to use. I'm going to try calling a couple tomorrow to see if I can get an email address to direct my letter to. This is all a learning curve for me. I do have a couple that I've been communicating with after test drives, and now a few more because of the truecar website. Truecar was a pretty big disappointment to me compared with the way consumer report did it in the past. Truecar prompted a few emails from dealers and one was an internet sales person. I have 10-15 dealerships in the bay area that I can write to if I wanted to go that far!
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Re: My new car buying experience.

Post by dm200 »

123 wrote: Mon Jan 29, 2018 11:37 pm
Watty wrote: Mon Jan 29, 2018 9:01 am ...If you have not looked at one yet be aware that carmakers tend to gradually make cars larger and my new Corolla is much larger than a 1990's Corolla that I had, it is about the size of an early 2000's Camry that I also had. If you take a look at the smaller Yaris be sure to check out the details of the safety package since it is a bit different than the one they use in the most of the larger Toyota's.
You hit the nail on the head. While I really love my old Corolla the new ones are 10 - 12 inches longer than what I'm used to. I've been thinking of alternatives, including the Yaris. The larger size is the main thing that has prevented me from getting a new Corolla. In my area parking is at a premium and we've got streets and curbs (especially driveway cutouts) that were established a long time ago. If I got a car that was one foot longer it would reduce my street parking options in my neighborhood by 50% or more. The spouse wouldn't be able to accept a hatchback, she'd be worried about the lack of a "secure" (such as they are) trunk.
I had an early 90's Corolla - and (sometime in the 90's I think) Toyota made the Corolla larger like the Camrys and the Camrys larger as well.
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Re: My new car buying experience.

Post by CurlyDave »

I had a pretty good experience using the Costco car buying program.

The closest dealer did not participate, in fact the only dealer who did participate was ~100 miles away, but the closest dealer was willing to price match...
smitcat
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Re: My new car buying experience.

Post by smitcat »

Here in NY the Costco program did not come close to the 'good' deal that we received on a new pick up last summer.
I would not rely just on their programs to figure a floor price to work from.
sid hartha
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Re: My new car buying experience.

Post by sid hartha »

Back in July I just walked into the dealer and test drove an Accord. I thought it was fine and I told them the most I will pay is the True Car exceptional price. They said fine no problem. Walked out with a new 2017 Accord for ~$18k. It might have helped that it was the last day of the month and I think they were trying to get rid of the remaining 2017 models. Because I can see the 2018 exceptional price is around $21k. The part that took a long time was filling out all the paperwork, getting approvals, calling the insurance. I must have been there for at least 2 hours. But negotiating the price couldn't have been easier.

They try to sell you all sorts of stuff after the fact. Like car mats, extra insurance etc. etc. I just said no to everything.
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yukonjack
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Re: My new car buying experience.

Post by yukonjack »

IMHO when using the Costco program you pay a premium over the price that you could negotiate on your own. I guess the premium is for avoiding the hassle of price negotiation. Although I think the dealer finance person is still going to put the hard sell on you at the end of the process.
sid hartha
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Re: My new car buying experience.

Post by sid hartha »

yukonjack wrote: Wed Jan 31, 2018 8:57 am IMHO when using the Costco program you pay a premium over the price that you could negotiate on your own. I guess the premium is for avoiding the hassle of price negotiation. Although I think the dealer finance person is still going to put the hard sell on you at the end of the process.
That's what happened to me. I negotiated the price with the salesperson and thought I was done. But noooooo. They then pass you off to the finance person who is really just another salesperson in disguise. They want to sell you all sorts of add ons and extra insurance up the wazoo. They try to scare you into buying it all which would drastically increase the price of the car. I just declined everything.
BogleMelon
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Re: My new car buying experience.

Post by BogleMelon »

Congrats for the new car, and thank you for sharing your experience! It was interesting to read your post even though I am not planning to buy a new car anytime soon..
Just one more thing, you said that financing is helping you managing your income for the ACA subsidy, would you please elaborate on that? Again, I am not in retirement, not even close, I am only just curious!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
Halicar
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Re: My new car buying experience.

Post by Halicar »

Watty wrote: Sat Jan 27, 2018 9:35 pm I used PenFed for a five year loan at 2.99% for the balance that was not covered by the trade in. I have a great credit score and the dealership could not beat that. I used a five year loan to keep the payments low.
This is really surprising to me. I have a mediocre credit score and the dealer gave me a 0.9% loan. (American Honda Finance)
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Watty
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Re: My new car buying experience.

Post by Watty »

BogleMelon wrote: Wed Jan 31, 2018 9:51 am Just one more thing, you said that financing is helping you managing your income for the ACA subsidy, would you please elaborate on that? Again, I am not in retirement, not even close, I am only just curious!
There are all sorts of factors and special rules that would take pages to explain so take this with a huge grain of salt but in my situation for a couple where one is already getting medicare it round numbers it works something like this.

1) If I can keep a my income below 400% of the federal poverty level for a couple, $64,240 , then I get the subsidy.
2) If varies by your income but at close to that cut amount off the subsidy is based on 9.56% of your income and cost of a specific silver plan

For example with $60,000 income 9.56 percent of that is $5,736 or $478 a month. I could buy the specified silver plan for $917 a month so I get a $439 a month subsidy. That is a subsidy of $5.268 a year. The plan I selected actually costs about $20 a month more but I still would get the same $439 subsidy.

There are two important factors with this;
1) If I make one dollar more than $64,240 then I lose the entire $5,736 subsidy.
2) If I can keep my income $10,000 lower then I would get an additional $956 subsidy since it is based on 9.56% of your income.

By paying off the car over several years it makes it easier to stay below that $64,240 income limit. In December I will calculate if I can safely partially prepay the loan and safely stay under that $64,240 cliff.

In my case I could have easily paid cash but that would have required me making a large withdraw from my IRA and I would likely lost the entire subsidy. I don't have enough in taxable or Roth accounts or I could have paid cash using those accounts.

I used most of my taxable accounts a few years ago to finish paying off my house.

In my state, Georgia, Roth accounts did not make sense for me since Georgia is one of the few states that allow you to deduct retirement IRA/401k contributions while your are working but it does not tax IRA/401k withdrawals up to generous limits once you are 65. The new lower tax rates also made using the traditional instead of the Roth in the past a better choice.
Halicar wrote: Wed Jan 31, 2018 10:47 am
Watty wrote: Sat Jan 27, 2018 9:35 pm I used PenFed for a five year loan at 2.99% for the balance that was not covered by the trade in. I have a great credit score and the dealership could not beat that. I used a five year loan to keep the payments low.
This is really surprising to me. I have a mediocre credit score and the dealer gave me a 0.9% loan. (American Honda Finance)

Mine was for a five year loan to keep the payments low which might make a difference. Toyota had zero percent financing available but the dealers had an internal $1,500 "participation" fee so they would have just raised the price of the car by $1,500 if I had used the 0% financing. I suspect that if you did not take low interest rate loan that you could have gotten a slight discount on your purchase price.

I didn't do the math but since I will likely pay the car off before the full five years not doing the 0% financing seemed like a good choice.
BogleMelon
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Re: My new car buying experience.

Post by BogleMelon »

Thanks! That was so interesting to know! I thought most retirees have Medicare not these Obama care plans! Obviously I was wrong as there are other factors that must decide...
Watty wrote: Wed Jan 31, 2018 1:23 pm
In my case I could have easily paid cash but that would have required me making a large withdraw from my IRA and I would likely lost the entire subsidy. I don't have enough in taxable or Roth accounts or I could have paid cash using those accounts.
So, income withdrawn from Roth is treating deferentially than income withdrawn from IRA in terms of subsidy eligibility?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
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Watty
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Re: My new car buying experience.

Post by Watty »

I'm not 65 yet so I will switch to Medicare when I turn 65.

You are correct that the withdrawals from a Roth are treated differently because they are not taxable.
sman09
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Re: My new car buying experience.

Post by sman09 »

Excellent post! Thanks a lot for documenting in fine detail the steps you took.

Thanks to all the knowledge shared by generous individuals like OP here, i took a similar approach

Went for a test drive of 2018 Elantra - was quoted an OTD price of $16,600 (with a mandatory loan at 6%+ (to avail a $1500 discount on the price) from hyundai motor finance) - refused to budge a bit saying the price was already discounted ($2500 dealer discount and another $1600 discount for taking the loan)

then took to truecar and got quotes - informed one of the other dealers about the price quoted by the original dealer - they offered to beat it and throw in lifetime free oil change and brake (with the same condition of mandatory loan at 6+%)

i let the original dealer know about this, when they contacted me to see what's going on - upon this, the original dealer offered to price match and also throw in free oil change


my question now is - how do i proceed from here?

if i turn down the $1,600 discount by not agreeing to taking a loan, then the price of the cars goes up to about $18,200 - not too sure if spending so much money on an entry levl Elantra (with not even a backup camera) is worth it

Any thoughts and guidance please?
neilpilot
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Re: My new car buying experience.

Post by neilpilot »

sman09 wrote: Fri Aug 24, 2018 12:30 am Excellent post! Thanks a lot for documenting in fine detail the steps you took.

Thanks to all the knowledge shared by generous individuals like OP here, i took a similar approach

Went for a test drive of 2018 Elantra - was quoted an OTD price of $16,600 (with a mandatory loan at 6%+ (to avail a $1500 discount on the price) from hyundai motor finance) - refused to budge a bit saying the price was already discounted ($2500 dealer discount and another $1600 discount for taking the loan)

then took to truecar and got quotes - informed one of the other dealers about the price quoted by the original dealer - they offered to beat it and throw in lifetime free oil change and brake (with the same condition of mandatory loan at 6+%)

i let the original dealer know about this, when they contacted me to see what's going on - upon this, the original dealer offered to price match and also throw in free oil change


my question now is - how do i proceed from here?

if i turn down the $1,600 discount by not agreeing to taking a loan, then the price of the cars goes up to about $18,200 - not too sure if spending so much money on an entry levl Elantra (with not even a backup camera) is worth it

Any thoughts and guidance please?
When I read your post 2 things come to mind:

1. What prevents you from taking the loan to secure the discount and then paying it off immediately?
2 I thought all cars in MY2018 had a backup camera
sman09
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Re: My new car buying experience.

Post by sman09 »

neilpilot wrote: Fri Aug 24, 2018 4:13 pm
sman09 wrote: Fri Aug 24, 2018 12:30 am Excellent post! Thanks a lot for documenting in fine detail the steps you took.

Thanks to all the knowledge shared by generous individuals like OP here, i took a similar approach

Went for a test drive of 2018 Elantra - was quoted an OTD price of $16,600 (with a mandatory loan at 6%+ (to avail a $1500 discount on the price) from hyundai motor finance) - refused to budge a bit saying the price was already discounted ($2500 dealer discount and another $1600 discount for taking the loan)

then took to truecar and got quotes - informed one of the other dealers about the price quoted by the original dealer - they offered to beat it and throw in lifetime free oil change and brake (with the same condition of mandatory loan at 6+%)

i let the original dealer know about this, when they contacted me to see what's going on - upon this, the original dealer offered to price match and also throw in free oil change


my question now is - how do i proceed from here?

if i turn down the $1,600 discount by not agreeing to taking a loan, then the price of the cars goes up to about $18,200 - not too sure if spending so much money on an entry levl Elantra (with not even a backup camera) is worth it

Any thoughts and guidance please?
When I read your post 2 things come to mind:

1. What prevents you from taking the loan to secure the discount and then paying it off immediately?
2 I thought all cars in MY2018 had a backup camera

Thank you @neilpilot for the suggestion. Paying the loan immediately is certainly an option.
The Elantra SE model that i drove did not seem to have one - i hope i am mis-stating the facts.
HEDGEFUNDIE
Posts: 4801
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Re: My new car buying experience.

Post by HEDGEFUNDIE »

sman09 wrote: Fri Aug 24, 2018 12:30 am Excellent post! Thanks a lot for documenting in fine detail the steps you took.

Thanks to all the knowledge shared by generous individuals like OP here, i took a similar approach

Went for a test drive of 2018 Elantra - was quoted an OTD price of $16,600 (with a mandatory loan at 6%+ (to avail a $1500 discount on the price) from hyundai motor finance) - refused to budge a bit saying the price was already discounted ($2500 dealer discount and another $1600 discount for taking the loan)

then took to truecar and got quotes - informed one of the other dealers about the price quoted by the original dealer - they offered to beat it and throw in lifetime free oil change and brake (with the same condition of mandatory loan at 6+%)

i let the original dealer know about this, when they contacted me to see what's going on - upon this, the original dealer offered to price match and also throw in free oil change


my question now is - how do i proceed from here?

if i turn down the $1,600 discount by not agreeing to taking a loan, then the price of the cars goes up to about $18,200 - not too sure if spending so much money on an entry levl Elantra (with not even a backup camera) is worth it

Any thoughts and guidance please?
Closely read the loan paperwork, it is likely you will only have to keep the loan for a few weeks.
dsmclone
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Re: My new car buying experience.

Post by dsmclone »

If you use Gmail, you don't necessarily have to create another email if you don't want.

If your email address is johndoe@gmail.com just put your email address as something like johndoe+car@google.com and your normal email address will pick it up. Or you could put a different one for each dealer i.e johndoe+ford@google.com
Loik098
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Re: My new car buying experience.

Post by Loik098 »

Congratulations.

Your methods sound very similar to those described by denovo in this thread (https://bogleheads.org/forum/viewtopic.php?t=124638), one I consider to be the "wiki" for the process.
goldendad
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Re: My new car buying experience.

Post by goldendad »

I have bought new and used. Drive them until they are only worth donating to charity. I also will only discuss one figure with the dealer - what I write the check for to drive it home. You have to be willing to walk away if they add anything at the last minute. I have also finished the final negotiations as I am getting in the car to drive home. Once a deal was closed after my wife (with a crying child) said, “I am sick of this I just want to go home.” I thanked her later.
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Wildebeest
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Re: My new car buying experience.

Post by Wildebeest »

CurlyDave wrote: Wed Jan 31, 2018 3:34 am I had a pretty good experience using the Costco car buying program.

The closest dealer did not participate, in fact the only dealer who did participate was ~100 miles away, but the closest dealer was willing to price match...
I did not have a good experience with Costco ( I love Costco and this hurts ), I was given one dealer. They were $ 1000 more than the three dealers I had gotten an best out of door price through Consumers Reports. Plus the Costco dealer was one hour away.

After that I decided to do the Internet approach and I sent out 15 emails. No phone calls. I had gotten so sick of the whole process that I bought the car after 12 hours after I sent the emails went out. I had to drive 60 miles ( I am pretty sure I could have bought the car from a dealer 15 minutes away for a similar price but then I would have been hassled even more then I had already been by the local dealers).

I bought yesterday on the last day of the month and am very happy with my new Mazda for $ 3000 less than the "no haggle Costco price" and $ 2000 less than the Consumers Reports dealerships price. I had another appointment to buy scheduled 2 hours later if there were surprises and I canceled that after they honored their offer. The people at the dealership I bought from were a pleasure to deal with.
The Golden Rule: One should treat others as one would like others to treat oneself.
shepherd
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Re: My new car buying experience.

Post by shepherd »

Another car buying tip - if possible, go to the dealer 1 to 1.5 hours before they close on a Saturday. Then you have put a limit on your total time there as they want to go home too.
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