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The Slickdeals Approach to Negotiating the Price of a New Car (Updated July 22, 2010)
<p style="text-align:center;"><a title="car-photo" href="/blog/wp-content/uploads/2010/03/car-photo.jpg"><img class="attachment wp-att-1232 centered" src="/blog/wp-content/uploads/2010/03/car-photo.thumbnail.jpg" alt="car-photo" width="500" height="332" /></a></p>
By: Alex Craig (SD User: thelnel52)
<em>Preface: There have been numerous threads in the past (on this site and on others) that have dealt with the topic of buying a new car. The approach that follows is the author's (who worked as a car salesman for all of a summer) suggestion, based on personal experience, advice from elsewhere on the web, and basic econ theory. We plan to update this article periodically if users have suggestions for improvement. Although it is a work in progress, it has been verified to work and is more effective than what the majority of new car shoppers end up doing. Also, stay tuned, as more "Slickdeals Approach to..." posts are coming, covering other auto topics (selling/buying a used car, financing a car) as well as other general financial topics...</em>
<del><strong>March 26, 2010</strong></del>
Updated <strong>July 22, 2010</strong>
<em>NOTE: The article originally featured <a href="http://www.carsdirect.com">carsdirect.com</a> as the first source for information. A user pointed out that <a href="http://www.truecar.com">truecar.com</a> actually does a better job- I gave the site a try and found that (1) the prices seem to be lower for a number of different cars and (2) there is much more information, including holdbacks, average prices paid, etc. That's why, in the update, I changed the links. Also, I reached out to TrueCar.com and a representative of the company will be here, in this thread, starting Friday the 23rd of July to answer any questions that you guys might have about TrueCar specifically or car buying in general.</em>
Some people know offhand how many lb-ft. of torque a Mustang GT has and how long the Prius' battery is under warranty. Without even thinking, they know the tissue on a 3-series, what a money factor of .00015 translates to in terms of APR, and when the Hyundai Genesis is due for a redesign. They know how to find if a dealer is close to a volume bonus or if he's struggling to pay his lease, and they know how to figure out how many days a particular car has been on the lot. Armed with this information (and tons more), these people can walk into a dealership, stare into the dealer's soul, and get the absolute best price. If you're one of these people, skip to the end of this post, because it will bore you, but please stay around to answer some questions below.
For the rest of us, the Slickdeals approach to negotiating the price of a car, although not as effective as the soul-reading approach, is beautiful in its simplicity. I worked as a car salesman, and about 95% of the people who bought from me could have done better if they had followed the approach outlined below. The overriding goal is to get the dealers competing with one another for your business; there are only three steps.
<strong>1. Find a Starting Point</strong>
Once you know the model and the options you desire, go to www.truecar.com, build the car, and SAVE THE PRINTOUT (this will be handy for the rest of the negotiation)
<strong>2. Get Them Bidding</strong>
Send a message to every dealer of that make within a 100-mile radius (this can be done by going to the brand's website and searching, most of the time there is a "contact us" button) that includes:
a salutation (better if you can find a specific name, but "Fleet Sales Manager" is ok)
the specific model and options you desire,
the date you will purchase the car,
an indication that you are soliciting "bids" for two days
an indication that bids should not include taxes or dmv fees, but should include everything from the dealership (including destination charges, etc.)
the TrueCar price,
your phone number and email address,
your name
(use the letter below as a guide):
Dear Fleet Sales Manager,
I am planning on purchasing a new '10 Ford Edsel EX, with the comfort package. I am indifferent to the color. For the next two days, I am taking bids- please contact me with your price for this car, with these options, inclusive of the all fees except for tax and dmv fees. If you have the lowest bid, I will come in on Monday morning at 11:00 to take delivery. As a starting point, I have a bid from TrueCar of $21,324 on a car with an MSRP of $24,333, including destination charges.
I can be reached at 909.234.5678 or by responding to this email.
Sincerely,
Mr. Slickdeals
<strong>3. Declare a Winner</strong>
Wait two days- Save emails, and if a dealer calls, be polite, but as direct as possible. Ask "what is your bid and what is the MSRP of that particular car?" and write the numbers down. Next, ask "what is your name and do you have a direct number?"- write that information down, too. Also note the time and date that the call took place.
Once all of the bids are in, hopefully there's one clear winner. If no one could beat TrueCar, then just go with TrueCar dealer. If you end up going with a dealer, email the fleet manager and say "Your offer of x for y with z options was the lowest. Please let me know the VIN and I would like to come in Monday to take delivery". When you come in, make sure to have a copy of this email and his response (or your notes from the phone conversation), just in case there's a "misunderstanding".
Note 1: The 100 mile radius suggestion is applicable if you life in an area that isn't particularly densely populated, such as the central valley of California. If you live in an area with car dealers every five miles, then you can probably reduce that number. If you live in North Dakota, then you might expand it to 250 miles.
Note 2: You can also include more than one make/model with your note. In fact, it's preferable that you do. Just think- if you're buying a 52" LCD tv, you don't just go out looking only at Samsungs. You probably find prices for a Samsung, a Sony, a Panasonic, an LG, and a Vizio. It's tough to tell what the best deal is until you know what the prices are relative to one another.
If you have a better method, or suggestions to make this method better, please post below.
Thank you Andy Newson for the image above
<a href="http://www.freedigitalphotos.net/images/view_photog.php?photogid=5">Image: Andy Newson / FreeDigitalPhotos.net</a>
By: Alex Craig (SD User: thelnel52)
<em>Preface: There have been numerous threads in the past (on this site and on others) that have dealt with the topic of buying a new car. The approach that follows is the author's (who worked as a car salesman for all of a summer) suggestion, based on personal experience, advice from elsewhere on the web, and basic econ theory. We plan to update this article periodically if users have suggestions for improvement. Although it is a work in progress, it has been verified to work and is more effective than what the majority of new car shoppers end up doing. Also, stay tuned, as more "Slickdeals Approach to..." posts are coming, covering other auto topics (selling/buying a used car, financing a car) as well as other general financial topics...</em>
<del><strong>March 26, 2010</strong></del>
Updated <strong>July 22, 2010</strong>
<em>NOTE: The article originally featured <a href="http://www.carsdirect.com">carsdirect.com</a> as the first source for information. A user pointed out that <a href="http://www.truecar.com">truecar.com</a> actually does a better job- I gave the site a try and found that (1) the prices seem to be lower for a number of different cars and (2) there is much more information, including holdbacks, average prices paid, etc. That's why, in the update, I changed the links. Also, I reached out to TrueCar.com and a representative of the company will be here, in this thread, starting Friday the 23rd of July to answer any questions that you guys might have about TrueCar specifically or car buying in general.</em>
Some people know offhand how many lb-ft. of torque a Mustang GT has and how long the Prius' battery is under warranty. Without even thinking, they know the tissue on a 3-series, what a money factor of .00015 translates to in terms of APR, and when the Hyundai Genesis is due for a redesign. They know how to find if a dealer is close to a volume bonus or if he's struggling to pay his lease, and they know how to figure out how many days a particular car has been on the lot. Armed with this information (and tons more), these people can walk into a dealership, stare into the dealer's soul, and get the absolute best price. If you're one of these people, skip to the end of this post, because it will bore you, but please stay around to answer some questions below.
For the rest of us, the Slickdeals approach to negotiating the price of a car, although not as effective as the soul-reading approach, is beautiful in its simplicity. I worked as a car salesman, and about 95% of the people who bought from me could have done better if they had followed the approach outlined below. The overriding goal is to get the dealers competing with one another for your business; there are only three steps.
<strong>1. Find a Starting Point</strong>
Once you know the model and the options you desire, go to www.truecar.com, build the car, and SAVE THE PRINTOUT (this will be handy for the rest of the negotiation)
<strong>2. Get Them Bidding</strong>
Send a message to every dealer of that make within a 100-mile radius (this can be done by going to the brand's website and searching, most of the time there is a "contact us" button) that includes:
a salutation (better if you can find a specific name, but "Fleet Sales Manager" is ok)
the specific model and options you desire,
the date you will purchase the car,
an indication that you are soliciting "bids" for two days
an indication that bids should not include taxes or dmv fees, but should include everything from the dealership (including destination charges, etc.)
the TrueCar price,
your phone number and email address,
your name
(use the letter below as a guide):
Dear Fleet Sales Manager,
I am planning on purchasing a new '10 Ford Edsel EX, with the comfort package. I am indifferent to the color. For the next two days, I am taking bids- please contact me with your price for this car, with these options, inclusive of the all fees except for tax and dmv fees. If you have the lowest bid, I will come in on Monday morning at 11:00 to take delivery. As a starting point, I have a bid from TrueCar of $21,324 on a car with an MSRP of $24,333, including destination charges.
I can be reached at 909.234.5678 or by responding to this email.
Sincerely,
Mr. Slickdeals
<strong>3. Declare a Winner</strong>
Wait two days- Save emails, and if a dealer calls, be polite, but as direct as possible. Ask "what is your bid and what is the MSRP of that particular car?" and write the numbers down. Next, ask "what is your name and do you have a direct number?"- write that information down, too. Also note the time and date that the call took place.
Once all of the bids are in, hopefully there's one clear winner. If no one could beat TrueCar, then just go with TrueCar dealer. If you end up going with a dealer, email the fleet manager and say "Your offer of x for y with z options was the lowest. Please let me know the VIN and I would like to come in Monday to take delivery". When you come in, make sure to have a copy of this email and his response (or your notes from the phone conversation), just in case there's a "misunderstanding".
Note 1: The 100 mile radius suggestion is applicable if you life in an area that isn't particularly densely populated, such as the central valley of California. If you live in an area with car dealers every five miles, then you can probably reduce that number. If you live in North Dakota, then you might expand it to 250 miles.
Note 2: You can also include more than one make/model with your note. In fact, it's preferable that you do. Just think- if you're buying a 52" LCD tv, you don't just go out looking only at Samsungs. You probably find prices for a Samsung, a Sony, a Panasonic, an LG, and a Vizio. It's tough to tell what the best deal is until you know what the prices are relative to one another.
If you have a better method, or suggestions to make this method better, please post below.
Thank you Andy Newson for the image above
<a href="http://www.freedigitalphotos.net/images/view_photog.php?photogid=5">Image: Andy Newson / FreeDigitalPhotos.net</a>
Created 03-26-2010
at 02:29 PM
by Thelnel52
If you purchase something through a post on our site, Slickdeals may get a small share of the sale.
Community Wiki
Last Edited by jbloggs
September 27, 2011
at
08:04 PM
NOTE: The article originally featured carsdirect.com as the first source for information. A user pointed out that truecar.com actually does a better job- I gave the site a try and found that (1) the prices seem to be lower for a number of different cars and (2) there is much more information, including holdbacks, average prices paid, etc. That's why, in the update, I changed the links. Also, I reached out to TrueCar.com and a representative of the company will be here, in this thread, starting Friday the 23rd of July to answer any questions that you guys might have about TrueCar specifically or car buying in general.
His name is Lee Morrel, and he has been in the automotive industry for over 18 years in a number of different capacities- retail, PR, media, etc. Obviously, he has an agenda (promoting truecar.com), but I think that having someone who really knows what he's talking about will be interesting for all of us.
Following is post from MrBlackpcs2 from FW thread
SAMPLE EMAIL To Send to Dealership
His name is Lee Morrel, and he has been in the automotive industry for over 18 years in a number of different capacities- retail, PR, media, etc. Obviously, he has an agenda (promoting truecar.com), but I think that having someone who really knows what he's talking about will be interesting for all of us.
Following is post from MrBlackpcs2 from FW thread
|
Quote
:
---------------------------------Formula-------------------------------------------MSRP= Sticker(includes Dest. Charge) Invoice= Can be found on Edmunds.com(include options) Rebates= Can be found on Edmunds.com Holdback= Can be found on Edmunds.com Est Tru invoice= Invoice - Rebates - Holdback tax= ?% x True Invoice Tags= whatever your states charges Low ball offer= True Invoice + tax/tags - $2,000 Target Price= MSRP - rebate or Sale price - Low ball offer / 2 + low ball offer(this is basically the formula I use) ---------------------------------Formula------------------------------------------- ---------------------------------------per request--------------------------------- Confidence is your biggest asset! If you dont believe you are going to pay invoice they will smell your fear like a pack of wild dogs. The car business is hurting right now. Dealers are happy with their "holdback". Its the salesman that are starving. STOP NEGOTIATING WITH THE SALESMAN! Its a fact that the average car salesman only sales 8-10 cars per month. Its also a fact that a "flat", the money a salesman is going to make on a new car sales with no profit(invoice) is $50-$100. So do the math thats only $800-$1000 in commission per month. Thats why dealer are always hiring salesman. Its also why salesman are constantly getting fired. GET THE SALESMAN ON YOUR SIDE! Tell him up front he's not gonna make any money on you, this will be an invoice deal. Tell him you'll slip him a $100 after the deal if you get your price. So when he goes up to the "salesdesk", he's fighting for you. When the salesman comes back to you with numbers on the paper, they call it an "a" sheet. Cross it out with a big "X", flip it over right your number on the back, next to it write "T/T out the door", then underline it. The first number you write should be at least $2000k below invoice. His manager will either send someone over or come his self. This is a good sign it shows that you werent talking to a "closer". He might even write a note, asking where r you getting your numbers. If this happends, write "I was thinking the same thing about you numbers". Typically his second number will be $2000 above invoice. If it is, you write," Split the difference, with T/T, out the door" They usually will jump at it. What I am telling you is based on 5 years in the business and personal purchases. Tips: DONT BE SCARED TO WALK AWAY. CONFIDENCE IS KEY. DONT DRIVE THE VEHICLE FROM THE DEALER YOU ARE BUYING FROM. DONT DISCUSS CREDIT, FINANCE, INTEREST RATE, ETC BEFORE YOU GET INVOICE PRICING. (THESE ARE BUYING SIGNALS, THEY WILL SMELL IT LIKE BLOOD TO A SHARK) DONT LISTEN TO YOUR FRIENDS. EVERYBODY CLAIMS THE GOT A GOOD PRICE. MOST DONT KNOW WHAT INVOICE IS. DONT ANSWER ANY QUESTIONS DURING NEGOTIATING FOR INVOICE. (YOU MAY GIVE AWAY A BUYING SIGNAL WITHOUT KNOWING) SHOPPING DURING THE LATTER PART OF THE MONTH CAN WORK TO YOUR ADAVNTAGE. (DEALERS HAVE A PROJECTED SALES IN UNITS THEY NEED TO MEET, SO DO BANKS. THEY TYPICALLY WILL WORK BETTER DEALS AT THIS TIME TO MAKE THEIR MONTH) IF YOU SUBMIT YOUR EMAIL ADDRESS TO A DEALERS WEBSITE LET THEM KNOW "NOT TO CALL YOU, NOT TO NEGOTIATE, YOU WILL ONLY ACCEPT INVOICE W/TAX&TAGS, IF THEY DO CALL YOU, YOU WILL NOT DEAL WITH THEIR DEALERSHIP, IF THE EMAIL YOU ANYTHING OTHER THAN INVOICE, YOU WILL NOT DEAL WITH THEIR DEALERSHIP" THIS IS THE MOST EFFECTIVE WAY TO NEGOTIATE, AS OPPOSE TO IN PERSON. THEY KNOW IF YOU NEGOTIATING THIS WAY YOU ARE A SERIOUS BUYER. THEY WANT YOU IN THE DEALERSHIP SO THEY PLAT THE "GAME" WITH YOU. ITS SET UP TO WORK AGAINST YOU. LIKE A CASINO THE HOUSE ALWAYS WINS. MOST DEALERS HAVE THE "NEGOTIATING" TABLES IN THE MIDDLE OF THE DEALERSHIP OR OPEN OFFICES. (THIS CREATES A "BUYING FRENZY") IT HELPS TO HAVE YOUR FINANCING ALREADY DONE BEFORE YOU SHOP FOR THE CAR. ---------------------------------------per request--------------------------------- *THIS IS SERIOUS PEOPLE. READ THE THREADS FULLY BEFORE YOU POST TO THIS THREAD. IT REALLY SHOWS WHEN YOU POST WITHOUT READING THE THREAD FULLY.* |
|
Quote
from ilikebtmoney_from_fatwallet
:
Ok, this is assuming this is sent to dealers two days prior to expected closing date. Hello, I have decided that I would like to purchase the following car: 2010 Hyundai Genesis 4.6L 05 - Technology package CT - Cargo tray IC - iPod cable Black Noir Pearl Of these features, the only ones I would be willing to accept a purchase without is the cargo tray. Otherwise, please be sure you have, or can obtain this car quickly through a dealer trade. My zip code is 12345 for pricing calculations, and I will be paying cash for the car. Please provide me with an out the door quote today as I will be purchasing the car by tomorrow to obtain the $1,500 Valued Owner Coupon that is offered, and to give you enough time to ensure a dealer trade if it is necessary on your part. Also please provide me with your phone number so I can call you once I receive the quote. To be fair, I am requesting pricing from various dealers so please be sure to obtain authorization from your manager if required before quoting a price. I do not wish to waste anyone's time and I would appreciate a confirmed offer on your part as well. If necessary, you may reach me at the following number. Thank you, and good luck! Take care, John Doe cell: 123-456-7890 |
604 Comments
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Thanks!
0) Don't get attached to the particular car/price/dealership
Be ready to walk away if you don't like the deal.
1) Price
Why mention MSRP price at all?
IMO it's better to just mention the offer you've got or you can convert your quote to invoice_price(incl destination)+$X, where X can be any number, even negative, if car is no selling very well. For avg selling price check Edmunds.com
Dealers like to start negotiation from MSRP - $Y because it seems like they are giving you a discount.
2) Fees
Do ask about all fees in addition to the price of the car. Document and/or DMV fees can be up to $200. Document, window etching, advertising fees are just a ways to make price higher. They are not mandatory.
3) Financing
If you are financing prepare a print out that will let you determine what an approx. monthly payment will be for different price/interest rate. Or have somebody who you can call and run calculations on-line (Dealer might tell you that interest rate is X%, but give you monthly payment amount for a (X+Y)%.
4) Incentives
Check to see if there are any dealer/buyer rebates and/or special financing offers.
Dealer may be getting a rebate from a manufacturer
5) Signing
read everything what you sign. If there are any fees added other than Price of the car and reasonable (i.e $50-$100) document fee, ask sales person to remove them.
If document fee is too high ask for some compensation (i.e. free oil changes for a year or some additional accessories like trunk liner, all weather floor mats etc...)
Thanks for the comments. To reply:
0) You're exactly right. The more options you have, the better. The article was very limited in scope, but if you're looking at an Accord, you should probably be doing the same thing w/ Toyota, Nissan, and Chevy.
1) I mentioned MSRP because that helps identify a particular model. In 99% of cases, there's only one way to get a particular model to an MSRP of $x. So if the MSRP is the same, you're talking about the same car. I've read that people like to start from invoice rather than from MSRP, but I'm unconvinced that can make a difference when everything's said and done.
2) Good point regarding fees. DMV fees should be the same, document fees will vary from dealership to dealership and should be addressed before you walk in. I'd have to imagine that window etching would be included in whatever bid the dealer submits.
3) Financing is going to be the topic of another article- there are way too many combinations of things that can happen w/ financing. But you're right that you should figure out financing before walking in to the dealer. (maybe checkthis out)
4) Incentives do matter, but they will probably be built into any bid that the dealers send you via email. If they know you're going with the lowest price, I can't imagine that they'd try to hide some $500 bonus and lose out on the sale.
5) You have a fair point with the signing. I agree that you should read everything, and I guess it can't hurt to ask for free oil changes.
the major benefit of the A plan is you don't have to negotiate price for the vehicle, only for trade-in and to get any rebates if available first. of course if the dealer is looking to get rid of the vehicle you may be able to get a low price and then the A plan won't be worth anything
1) I mentioned MSRP because that helps identify a particular model. In 99% of cases, there's only one way to get a particular model to an MSRP of $x. So if the MSRP is the same, you're talking about the same car. I've read that people like to start from invoice rather than from MSRP, but I'm unconvinced that can make a difference when everything's said and done.
Mentioning MSRP may make dealer believe that you are actuallyn thinking that MSRP is a meaningful number. When it fact, from buyers point of view, what matters is market value.
If you know about incentives you can ask for it. If you don't know dealer will keep that manufacturer's rebate for himself and/or pocket the difference between the prom APR and regular APR.
1. Go to carquotes.com and pick all the cars you are interested. You will have to pick a financial institution,- pick any credit union. Give your details. You will get a detailed brochure of the car, options, invoice price, ongoing rebates and a pre-negotiated price on the car, and a dealer to go to, whom to contact, etc. It will also give you the rebates, etc. Note the dealer name, price.
If you do not like to hear from the dealer, register for a Google voice phone number. Callers can leave all messages they want on that. You can call them back using the same number...nobody need to know your real number.
2. Go to Zag.com, buy a car, and pick a car, options. This will give you a price on the car without
actually giving your details. Note this price down. Don't give any details here.
3. Go to Edmunds.com and see if there are any 'manufacturer to dealer' incentive on the car. Note that down.
4. Avoid the dealer nearest to your house. Reserve that for the very last.
5. Pick another dealer for test driving the car. This dealer should not be the one from 4, and should not be the one from 1. Test drive the car and mention to the dealer that you did not like it, so that you are never bothered by them.
6. Collect one more reference price from carsdirect.com. Note that down.
7. Now you have 3 reference prices from 1, 2, and 6.
8. Go to cars.com and invite bids via email from different dealers. Avoid dealers from points 1, 4, and 5. You can do 3 dealers at a time. You can repeat the bids for as many dealers as you wish...for as long as you can travel. You will get a bid, if you mention that you are serious about buying and are willing to do business with in the next 5 days. Make sure the bid includes destination charges, and carpet floormats, which the dealer rips you out. Request him to itemize the quote - price, - rebate - dealer cash, + destination charge. Verify the prices and dealer cash info from e-brochure from 1 and information from 3.
9. I would pick dealers couple from two different neighboring states as well. Sometimes rebates are regional... if you pick a different region, you may be eligible for a different set of rebates. That is truely for a MOTIVATED bargain hunter...like me. You can ignore this one if you are not.
10. Pick the lowest of the bids from 8. Compare it with the prices from 1, 2. Subtract 500 from the lowest bid and then invite fresh bids again - stating that this is the lowest bid. Allow the dealers to get back to you with their revised bids. You can continue this process a couple of times more, - either by picking different dealers each time or same dealers and asking them to respond to a revised bid. You can play one dealer against the other openly.
11. Once the price stops going lower, you have hit rock bottom. Note that price and the dealer. Thank dealer that responded with the price you got and the dealership that gave you the price and mention that you are buying the car from the winning bid.
12. All along, keep watching the inventory on the dealer from 4, from his website. Watch out for cars that have been sitting for a long time. You can do that for a couple of other dealers too if you are motivated. If you are a credit union member, pre-apply for a loan and be ready with the best rate you can get outside..
13. Go to the dealer in 4. Ask for the car/color/options... Ask for a test drive. Act like you are one of those impulse buyers.. Ask him what specials the dealer will offer him in terms of service - like free oil changes, free loaners, carwashes, etc. Let him boast about how good a dealer he is.. He will cough up a lot of freebies. Tell him that you are pleased and will buy the car and ask him what his best deal would be. Compare with your notes. If the offer is better than what you already have, then you are good. Else, make an offer of $500 below the price from 11. Tell him that you will buy it now if he honors that price. 99% chance that you will get it. Close the deal - making sure that you do not buy anything extra - like fabric protection, rust proofing, mudguards, or extended warranties. You can shop for all that later on.. The dealer will ask you to finance thru him. At this point, you can say that you have an approved loan - rate from your bank.. He will hate that but will beat that rate by at least 1%. If you have been following this dealer's inventory and the car you have picked has been on the lot for some time...then you can use that to your advantage as well.
14. If you cannot get it for that price, then just walk away and wait for a day or two. If he does not call back, then you have the dealer /price from 11. You are good to go there and close the deal.
15. If 14 does not work, then you have the deal from 1 and 2. You have multiple options for the same car. You are truly powerful at this point.
16. I have bought 2 cars using this method. My friends, family, everybody has used this method, accounting for dozens' of cars without ever stepping into a dealership for negotiations ( other than test driving ).
Try it out and any feedback is welcome.
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1. Go to carquotes.com and pick all the cars you are interested. You will have to pick a financial institution,- pick any credit union. Give your details. You will get a detailed brochure of the car, options, invoice price, ongoing rebates and a pre-negotiated price on the car, and a dealer to go to, whom to contact, etc. It will also give you the rebates, etc. Note the dealer name, price.
If you do not like to hear from the dealer, register for a Google voice phone number. Callers can leave all messages they want on that. You can call them back using the same number...nobody need to know your real number.
2. Go to Zag.com, buy a car, and pick a car, options. This will give you a price on the car without
actually giving your details. Note this price down. Don't give any details here.
3. Go to Edmunds.com and see if there are any 'manufacturer to dealer' incentive on the car. Note that down.
4. Avoid the dealer nearest to your house. Reserve that for the very last.
5. Pick another dealer for test driving the car. This dealer should not be the one from 4, and should not be the one from 1. Test drive the car and mention to the dealer that you did not like it, so that you are never bothered by them.
6. Collect one more reference price from carsdirect.com. Note that down.
7. Now you have 3 reference prices from 1, 2, and 6.
8. Go to cars.com and invite bids via email from different dealers. Avoid dealers from points 1, 4, and 5. You can do 3 dealers at a time. You can repeat the bids for as many dealers as you wish...for as long as you can travel. You will get a bid, if you mention that you are serious about buying and are willing to do business with in the next 5 days. Make sure the bid includes destination charges, and carpet floormats, which the dealer rips you out. Request him to itemize the quote - price, - rebate - dealer cash, + destination charge. Verify the prices and dealer cash info from e-brochure from 1 and information from 3.
9. I would pick dealers couple from two different neighboring states as well. Sometimes rebates are regional... if you pick a different region, you may be eligible for a different set of rebates. That is truely for a MOTIVATED bargain hunter...like me. You can ignore this one if you are not.
10. Pick the lowest of the bids from 8. Compare it with the prices from 1, 2. Subtract 500 from the lowest bid and then invite fresh bids again - stating that this is the lowest bid. Allow the dealers to get back to you with their revised bids. You can continue this process a couple of times more, - either by picking different dealers each time or same dealers and asking them to respond to a revised bid. You can play one dealer against the other openly.
11. Once the price stops going lower, you have hit rock bottom. Note that price and the dealer. Thank dealer that responded with the price you got and the dealership that gave you the price and mention that you are buying the car from the winning bid.
12. All along, keep watching the inventory on the dealer from 4, from his website. Watch out for cars that have been sitting for a long time. You can do that for a couple of other dealers too if you are motivated. If you are a credit union member, pre-apply for a loan and be ready with the best rate you can get outside..
13. Go to the dealer in 4. Ask for the car/color/options... Ask for a test drive. Act like you are one of those impulse buyers.. Ask him what specials the dealer will offer him in terms of service - like free oil changes, free loaners, carwashes, etc. Let him boast about how good a dealer he is.. He will cough up a lot of freebies. Tell him that you are pleased and will buy the car and ask him what his best deal would be. Compare with your notes. If the offer is better than what you already have, then you are good. Else, make an offer of $500 below the price from 11. Tell him that you will buy it now if he honors that price. 99% chance that you will get it. Close the deal - making sure that you do not buy anything extra - like fabric protection, rust proofing, mudguards, or extended warranties. You can shop for all that later on.. The dealer will ask you to finance thru him. At this point, you can say that you have an approved loan - rate from your bank.. He will hate that but will beat that rate by at least 1%. If you have been following this dealer's inventory and the car you have picked has been on the lot for some time...then you can use that to your advantage as well.
14. If you cannot get it for that price, then just walk away and wait for a day or two. If he does not call back, then you have the dealer /price from 11. You are good to go there and close the deal.
15. If 14 does not work, then you have the deal from 1 and 2. You have multiple options for the same car. You are truly powerful at this point.
16. I have bought 2 cars using this method. My friends, family, everybody has used this method, accounting for dozens' of cars without ever stepping into a dealership for negotiations ( other than test driving ).
Try it out and any feedback is welcome.
Thank all the dealers( except the winning bid ) for responding to your bid. Mention to everybody ( except the winning bid ) that the winning bid was X$ and Y Dealer and you are buying the car from them. Mention to the winning dealer that you are still waiting for bids.
Mentioning MSRP may make dealer believe that you are actuallyn thinking that MSRP is a meaningful number. When it fact, from buyers point of view, what matters is market value.
Don't count on the dealer. After all why would he lose potential profit by disclosing the info?
If you know about incentives you can ask for it. If you don't know dealer will keep that manufacturer's rebate for himself and/or pocket the difference between the prom APR and regular APR.
2. The reason a dealer would lose potential profit is that this system is designed to promote competition. If someone else factors a rebate in, then anyone who didn't will have no chance of making the sale.
Let me ask you guys something. Why not just go in and ask your salesman if he's willing to sell you the vehicle at invoice minus all rebates and incentives? I mean a true, dealers invoice is easy to find all over the internet
A new car is the easiest negotiation of all. Pick out the car, be willing to buy and ask for what you want. Your salesman will appreciate it, you will spend less time with all of the above.
Now your trade? That's the hardest negotiation. A dealer will give you invoice in 2 minutes but will not overpay for your trade. But we know most slickdealers sell their own trade anyway...right?
Save yourself and your salesman some time and ask him upfront if he/she is willing to sell you at invoice. 8 out of 10 in todays climate will say yes.
Let me recap. Sell your trade or expect wholesale. Acquire financing before you buy to compare with what the dealership offers. Find the car. Call the dealership and ask for the price you want, upfront. Go in and buy it.
It's simple and you didn't take up some poor, commission only saps time with no intentions of buying from him/her.
Educate yourself about the rebates, incentives, and invoice price via the internet, but when you know what you want, any dealer can sell it to you for that same amount. Once they realize that you know all of this information, you are prepared to buy, and if they don't give you this reasonable deal, someone else will - you are now in control. Your dealer down the street will sell you this car, likely give you some car washes or a free oil change, and it's better for everyone involved. No need to involve half a dozen or more dealerships in a false bidding war - their bottom dollar amount is near enough to identical - you just have to know how to get them there. The key to this is walking in the doors as a highly educated consumer.
FWIW, I worked at a dealership for a while, and have helped purchase several cars since. The last of which I walked in to help a friend purchase a new Toyota Matrix, we found what she wanted, drove it, walked in the door and I didn't even let the guy speak about price, just told him what we were willing to pay for it, and we'd drive it home today. Knowing the car sales "tricks" and using them against them, I wrote down on a blank sheet of paper "Willing to purchase 2009 Toyota Matrix that we drove today for XX,xxx plus tax, title, and licensing fees", had her sign it, and he delivered it to the desk. He conversed with his manager, his manager was obviously frustrated that I was one of "those guys" and 10 minutes later they were printing her paperwork. So easy that it's funny how many people fear the process.
Car buying need not be difficult if you are educated and assertive.